Malaysia's Insurance Sector To Sustain Growth In 1Q 2026 -- MBSB IB

KUALA LUMPUR, April 27 (Bernama) -- MBSB Investment Bank Bhd (MBSB IB) anticipates Malaysia’s insurance sector to sustain its growth momentum in the first quarter of 2026 (1Q 2026), supported by stronger general and life insurance segments.

In a note today, the investment bank said both segments had rebounded, while medical claims were kept under control due to the milder monsoon season.

“However, for the subsequent quarters, the insurance sector could feel a pinch. In 1Q 2026, impact from the West Asia conflict is yet to be truly felt, while the strong ringgit makes the cost of importing car parts and other components of the claim’s ratio relatively affordable,” it said.

To recap, Life Insurance Association of Malaysia (LIAM) reported that a lower 2025 medical claims inflation of 5.3 per cent year-on-year (y-o-y), the lowest in recent years. This has led to a solid overall growth in life insurance claims of 3.4 per cent y-o-y in 2025.

MBSB IB said the impact of the initial stages of the war was largely confined to business; now, the war has gone on long enough for the average consumer to feel the rising cost pressure.

It noted that retail loans have already been weakening over the last couple of years, as the ongoing strain on the mass market could escalate this.

“While insurers have alluded that 1Q 2026’s growth figures remain intact, we think that weak economic activity could pose a problem in subsequent quarters, and for general insurers, in particular, could see a pinch as the volume of vehicle and house purchases declines,” said MBSB IB.

Meanwhile, MBSB IB does not foresee any material impact from the marine, aviation, and transit (MAT) segment, despite expectations of instability stemming from the West Asia conflict, which could lead to increased coverage demand, especially for tankers and vessels transiting the Strait of Hormuz.

“We think a minor uptick in reinsurance costs due to the heightened risk is also possible. Regardless, we think any impact will be immaterial: MAT makes up a very limited component of listed insurers, and the portion transiting through the West Asia area is even smaller,” it added.

-- BERNAMA