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Bridging the protection gap in Malaysia through digital transformation
Digital transformation is set to enable expansion of Malaysia’s insurance and takaful market to RM116 billion by 2030. However, a substantial protection gap remains. Around 10.2 million individuals and 644,000 micro, small and medium enterprises (MSMEs) continue to be unserved, often due to persistent and well-evidenced barriers.
In a recent survey conducted across Malaysia, EY found that within the retail segment, 47% of respondents point to affordability as a key reason for not purchasing insurance, while 41% cite complexity and 27% say products lack personalization. MSMEs face similar issues, with 36% struggling with affordability and 28% finding policies too complex to navigate.
With the right strategy, insurance and takaful operators (ITOs) can reimagine how protection is designed, priced and delivered. Globally proven business models, artificial intelligence (AI) driven insights and modular platforms now make it possible to offer affordable, simple and tailored products at scale. More importantly, they can redefine protection to make it accessible, relevant and trusted for Malaysia’s underserved communities and enterprises.
Malaysia’s RM78 billion digital insurance opportunity between 2024 and 2030 presents a real chance for new players to drive inclusion, competition and efficiency. Success will depend on designing relevant experience that make insurance more inclusive.