KUALA LUMPUR (Feb 25): The insurance industry should proactively seek ways to generate growth and sustain overall profitability despite turbulence in the global economy.

In a statement today, Deloitte Malaysia Financial and Regulatory Risk Leader Justin Ong said most insurers keep investing eagerly and are focused on seeking expense efficiencies.

Therefore, consumers have often been hesitant to purchase annuity due to concerns about associated fees and potential surrender charges, the products’ complexity, complicated tax rules, as well as fear the insurance company behind the annuity goes under.

According to Ong, to satisfy looming consumer needs, extra effort by the insurance industry is required, although it is observing growth.

“Insurers should prioritise on how to grow their companies, run it more efficiently and productively or meet rising regulatory compliance demands. Insurers should also review how to reposition themselves for success throughout the next decade to adapt to changes in consumers purchasing preferences, property use and work habits,” he added.

Ong said in order to meet the consumer needs, annuity providers must find ways to simplify and rebrand retirement products and enhance the sales process.

He said they should also improve public perception of the value proposition versus investment alternatives to eliminate the public concern.

"Customer relationship management should be facilitating a more mature set of capabilities for sales management, in terms of direct-to-customer sales, as well as producers. Post purchase efforts should be increased, including upselling and cross-selling, while adding ancillary services.

"Another way to grow an insurer is to eliminate consumer skepticism. For example, annuity products could be repackaged by embedding more flexibility and liquidity, as well as providing customers better control of their investments.

"Generally, only 4% of millennials have the interest to work for the insurance industry due to the lack of knowledge about how the industry functions and have negative perception about working in insurance," he said.

Meanwhile, the Life Insurance Association Malaysia (LIAM) said force premiums in Malaysia are experiencing growth.

It said with this positive outlook on the premium, economists suggest that Malaysia will be making forward progress as trade tensions and monetary policies ease concurrently.