THE REASONS BEHIND THE
DIFFERENCES IN NUMBER OF
LIFE INSURANCE POLICYHOLDERS BETWEEN
MALAYSIA AND
INDONESIA
BY
The life insurance business is huge.
It is expected to undergo huge changes and improvement in the coming years as
the local industry faces up to the brave new world of globalization and
deregulation. In a country like Japan, more than 90 percent of the population
is covered with life policies. While in Malaysia, it is progressing steadily,
its achievement today is still far behind that enjoyed by developed countries.
The National Insurance Association of Malaysia (NIAM) President, Tunku Datuk
Yaacob Tunku Abdullah, said that only a quarter of the Malaysian population own
life insurance policies. This number is less than Indonesia, Singapore and
Japan. The primary objective of this study is to investigate the reason of the
differences in the number of life insurance policyholders in Malaysia and
Indonesia. To support the primary objective, the level of awareness and understanding
of individuals in both countries toward life insurance must be first found out.
After that, the purposes or benefit that consumers of both countries expect
from buying life insurance will then identified. And finally, the investigation
of non-speculative risk that faced by MAA
Berhad (Malaysia) and PT A.J CAR (Indonesia) will be carried out. As an overall
conclusion, there are four factors that cause a bigger number of
policyholder in Indonesia when compared with Malaysia, which is Indonesia has
bigger number of population, level of safeties in Indonesia is lower,
Indonesian are more aware and understand about life insurance, and Indonesians
are unanimously clear of the overriding objective of a life insurance policy,
which is as a form of protection. Final
chapter in this study prepares some recommendation to those related authorities
such Government, life insurance companies and consumers in order to improve the
performance in this industry.
Full text source:
B. A. (Hons) In Finance
Number: 6