The Role of Digital Technology in the Re/insurance Industry

Insurance is essential when addressing some of society’s important and pressing issues, such as those that cover their assets, home and life. Reinsurance companies, on the other hand, help insurers maintain their company’s financial stability by limiting their losses. As we emerge into the world of digitalisation, it has transformed the re/insurance industry to another level. Digital technology has helped make the industry more efficient, appealing, and understood. It has also contributed to boosting the performance of marketing, product development, sales, claims management, and more. Read further about how digital technology has helped shape the re/insurance industry.

Save cost with digital technology

Ever wonder how technology helps in reducing costs? It benefits by lowering distribution and administration costs. Companies have many concerns regarding operational costs to necessitate a significant amount of working capital to maintain their operations. Digital technology helps reduce costs by substituting humans with technology-enabled processes and devices such as cloud computing, AI (Artificial Intelligence) and big data. These technologies and processes enable insurance companies to guarantee the accuracy of their data and monitor real-time regulatory compliance.

Instead of hiring a large team of staff to physically work and move files and folders to different locations – storing, retrieving and processing documents or data electronically using PC networks and minimal human interaction are less expensive and more reliable. Moreover, new product information can be partly or wholly automatically sent to customers via apps.

Technology makes things more appealing

From marketing to claims management, things are more appealing with the help of digital technology. In marketing, it is apparent in developing strategies to distribute insurance. Video platforms are used to explain products to customers, spread more company information, and give asset management topic descriptions. Using marketing technologies helps attract younger generation customers as we’re all evolving in the new world of technology.

Another matter that makes the insurance industry more appealing with the help of technology can be observed in product sales. Sales can be managed by using a chat box. This is where the role of AI takes place, giving the customers the same experience of communicating with a real-life person.

As the world evolves, technology has found its significant role in many industries, insurance being one of them. Reinsurers such as Malaysian Re play a key role in shaping the industry as they help to stabilize insurers should there be any loss experience by distributing specific risks. Additionally, MNRB as the parent company of Malaysian Re boasts an extensive business portfolio across Asia and the Middle East, which guarantees sound financial and management position. Visit the MNRB website to learn more about other MNRB businesses related reinsurance, retakaful, retail takaful and more.

Malaysia’s Retakaful Market Development Amidst and After the Pandemic

Retakaful is an efficient tool to diversify the risk portfolio of businesses over various territories and diminishes the probability of the industry’s risk of destruction during large catastrophic losses. The COVID-19 pandemic in 2020 has greatly impacted every industry and business, and the retakaful market in Malaysia is not spared either. Read about the development of the retakaful market amidst the pandemic here.

An Overview of the Market Performance

  • According to the Malaysian Takaful Association, Family Takaful business has recorded double-digit growth in Malaysia in 2020. Its market value increased by 14% to RM364.2 bil in September 2020, arising from RM4.84 bil new business contribution.
  • The general takaful industry recorded a decent growth of 3.6%, with total gross contributions of RM2.57 bil compared to RM2.48 bil in 2019. Out of the various takaful categories, motor takaful held the largest proportion of 65.3%. In contrast, fire takaful is the second-largest business class with a gross contribution of RM450 million.
  • The industry’s durable position is an encouraging development given the fact that 70% of the country’s insurance premium are comprised of motor and properties, consumption-based sectors which typically mirrors the country’s GDP.

Future Development of The Retakaful Market

There are an estimated 324 Takaful operators around the world — Malaysia has the most comprehensive Family Takaful market while Saudi Arabia has the most significant General Takaful market. Demand for motor takaful, fire takaful and even family takaful is projected to rise following the Islamic financial system’s phenomenal growth, particularly in the Islamic banking sector and Islamic capital market — which can subsequently lead to a growth in the retakaful industry too. Nevertheless, at this stage of development, there is a limited amount of retrotakaful capacity available.

Challenges to Develop The Retakaful Industry

  • Retakaful operators usually operate with a limited appetite, and most of them only have enough business capacity to focus on providing coverage to domestic business.
  • The issue of limiting financial exposure comes into play, as some operators avoid accumulating exposures by accepting both retrocession and retrotakaful as it complicates the administrative and financial process.
  • Due to the relative financial strength and capacity of conventional players, conventional markets could offer more value-added services to their clients as compared to retakaful providers.

Malaysia’s national reinsurer, Malaysian Reinsurance Berhad (Malaysian Re), underwrites all classes of general reinsurance as well as general and family retakaful businesses, with an extensive business portfolio across Asia and the Middle East. Head over to to read more.