An Overview Of Malaysia Insurance and Reinsurance Industry In Numbers

 Dear Readers, 

The Insurance And Reinsurance Sector Is A Major Economic Catalyst For Malaysia. Get An Overview Of The Industry With These Concise Facts Presented In Numbers. 


In Numbers: An Overview of Malaysia's Insurance and Reinsurance Industry

The insurance and reinsurance sector is a major catalyst in many nations' economies, including Malaysia. It is time for us to explore and get to know more about our insurance and reinsurance industry with these concise facts and statements below that are captured in numbers. 

What is the minimum amount of capital legally required for a reinsurance company in Malaysia?

The answer is RM 10 million. 

Malaysia's insurance companies and reinsurance institutions make up the reinsurance industry which plays a crucial role in maintaining the financial stability of insurers.
This is really important because that serves as a risk management tool to reduce financial volatility and increase effective capital usage fostering the need for clear guidelines and procedures to uphold professional standards. 

Reinsurance companies are under the regulation of the Labuan Financial Services Authority ("LFSA"), a statutory body under the Labuan Financial Services and Securities Act 2010 ("LFSA 2010"). 

Reinsurers in Malaysia are required to

  • Maintain a minimum capital of RM 10 million (or it's equivalent in foreign currency) within Labuan
  • Be a member of the Labuan International Insurance Association
  • Have an operational office in Labuan
  • Appoint LFSA-licensed underwriting managers 

How Many Reinsurance Companies Are There In Malaysia?

There are a total of 200 reinsurers in Malaysia. 

Although the reinsurance industry seems to be a relatively unknown industry in Malaysia, it is a well-established industry that consists of 200 reinsurers. 

One of the most significant reinsurers in Malaysia is Malaysian Reinsurance Berhad (Malaysian Re), a wholly-owned subsidiary of MNRB Holdings Berhad. 

Malaysia Re is the largest national reinsurer (by asset) in the Southeast Asia region, underwriting all classes of general reinsurance business as well as general and family retakaful businesses. 

How Much Reinsurance Premium Do The Local Insurance And Reinsurance Industry Cede In A Year?

A total of RM 1,182 million was ceded in the year 2020. 

The Malaysian insurance and reinsurance market recorded gross direct premiums of RM 17.41 billion in 2019. With COVID-19 impacting the market in 2020, GDP has dropped by 8.3% and direct insurance and reinsurance premiums contracted by 3.6% in the first half of the year. 
In contradistinction, the 3rd quarter of 2020 GDP grew at a remarkable rate of 18.2% compared to the previous quarter, while the Gross Direct Premium of the insurance sector narrowed to a negative growth of 1.2% from 3.6% during the period. This percentage is demonstrating market resilience amidst economic volatility. 

Among all local reinsurers, Malaysian Re dominates 65% (RM 775 million) of the reinsurance market share. 

About Malaysian Re

Malaysian Reinsurance Berhad (Malaysian Re) is Malaysia's largest reinsurer, commanding more than 60% of reinsurance accepted premiums in the country. 

They are a major driver of economic growth, as seen in a 2022 Fitch Ratings stating that the institution has a strong capital buffer and sustained financial performance. 

The institution underwrites all classes of general reinsurance business and general retakaful business, with an extensive business portfolio across Asia and the Middle East. 

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