KUALA LUMPUR: Bank Negara’s discussion paper on outlining a proposed framework for licensing new digital insurers and takaful operators (Ditos) is paving the way for the development of the insurance technology sector in the country, according to Deloitte Malaysia.

       In a joint statement, Deloitte Malaysia financial service regulatory risk leader, Justin Ong (pic) and insurance risk leader Saiful Adli Aziz said Ditos would encourage the integration of artificial intelligence, blockchain, the Internet of things and big data management.

       “Insurance options will become more affordable and customised, further contributing to a lower cost of capital as key processes across the value chain, namely underwriting, onboarding, claims, and processing, are transformed to be more digitalised,” they said.

       The statement also said Malaysia’s life insurance penetration rate has been reported to hover around 54% for the past seven years and is still far from the targetted 75% set by the government.

       One of the main factors for the low penetration rate is affordability, which is more prevalent in the B40 group as their income is only sufficient to cover their daily necessities.

       Hence, they said the discussion paper requires Ditos to bridge the protection gap through the fulfilment of three value propositions which are inclusion, competition, and efficiency. — Bernama