Insurers and industry regulators must do more to safeguard from InsurTech disruptions

The emergence of Insurance Technology (InsurTech) is disrupting the insurance industry and driving insurance companies in Malaysia towards digital transformation. While leading insurance companies are embracing the trend, industry players have yet to explore the full potential of InsurTech and protect their business from the disruption.

Along with disrupting old business models, InsurTech also creates new opportunities for insurance companies, such as increased engagement level as promised by usage-based insurance, tracking via wearables, a faster claims process through the use of real-time, high-resolution videos, and more. Frost & Sullivan’s recent analysis, The Malaysian InsurTech Landscape, 2019, studies the impact of InsurTech on the Malaysian insurance industry and possible future disruptions.

Although there is industry-wide awareness of InsurTech among insurance companies in Malaysia, there have been few actions to counter the disruption.

The insurance industry in Malaysia continues to be heavily reliant on insurance agents to grow the business. However, the declining number of insurance agents over the past two years poses a threat to insurance companies. As a result, insurance companies must adopt online channels to extend their reach and compete with InsurTech.

Bank Negara Malaysia Embracing InsurTech

Bank Negara Malaysia (BNM) aims to achieve a 75% life insurance penetration rate by 2020 and launched several initiatives to provide basic insurance coverage to low-income groups. This has found limited success.

BNM will need to do much more than running a regulatory sandbox. It should intensify competition by liberalizing or approving product types fast and by shortening the time InsurTech spends in the sandbox.

Digital Technologies to Improve Insurance Services

Digital technologies such as telematics that empower usage-based insurance, wearables for health tracking and other technologies are redefining the industry.

New entrants or startups are using these technologies and are primarily engaged in recruiting customers online and offering easy-to-understand insurance products. Active players in Malaysia include Bima, which offers micro term life insurance, and VSure.Life, which offers on-demand insurance.

Frost & Sullivan has identified key steps for industry players to benefit from the InsurTech revolution:

  • BNM should create a welcoming environment to encourage new-age InsurTech start-ups to enter the country and offer express sandbox facilities.
  • Tier II and III companies that are most vulnerable to InsurTech disruption should embrace digital transformation like InsurTech players while protecting their existing business.
  • A handful of leading insurance companies have continued to rely on old channels without many initiatives to leverage digital technologies or form partnerships with InsurTech. These companies are at high risk of losing market share and should quickly embrace InsurTech.


If you found this informative and would like to speak to Soni, kindly contact Zuzana Zukarnain, Corporate Communications – Asia-Pacific,

About Shailendra Soni

Shailendra SoniShailendra Soni is Principal Consultant and Head of FinTech Team at Frost & Sullivan. He has more than 18 years of consulting and research experience spanning across multiple industries. His consulting expertise includes advising services companies and vendors on market entry and expansion strategy, product/service portfolio, and delivering competitive intelligence to board members.
His diverse experience is acquired through years of research and regular interaction with global and regional level top executives of services companies and vendors in the emerging fields such as Insurtech, Fintech, Banking, Insurance, Wealth Management, Big Data, Future of WorkPlace, Enterprise Mobility Management, Enterprise Mobile Messaging, Unified Communications, Collaboration, Professional Headsets and Contact Centres.
He has spoken in more than 40 industry events and conferences that include FinovateAsia, Malaysian Insurance Summit, Associations of Financial Advisors Malaysia Conference, BankTech Asia, CommunicAsia, Cloud South East Asia, Enterprise Mobility Forum, and several vendor’s partner conferences. Besides speaking at conferences, Shailendra has regularly contributed articles in several trade publications.
He has a Master’s degree in Marketing Management and a Bachelor degree in Instrumentation Engineering.

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