Introduction Demand for Life Insurance has increased – mainly due to Bancassurance There are various types of Life Insurance products Life Insurance is: Regulated by the MFSA A long-term commitment
Historical Background 1994-Bancassurance 2008- Slight dip concept was due to financial introduced crises 1999- Beginning of unit-linked products
Statistics As of January 2011- Malta’s insurance market is ranked 60 in the world Insurance density- Malta holds rank 33 world-wide with premiums per capital of €657m, of which €430m is life insurance. Market Penetration- Malta is in rank 34 with an overall rate of 4.7%, of which 3.1% is life insurance
Why buy Life Insurance? It replaces an income in order to leave financial security to your beneficiaries who would not have to make any financial sacrifices. There are different life insurance policies depending on what your particular needs are. Insurance companies have several advisors who can help you select the most suitable products useful for you.
MSV Life – The Sunday Times MSV Life has designed a new product for recently married couples that offers them free life insurance of €10,000 for up to one year. A spokesperson explained that spouses needed to consider the impact on widows or widowers such as funeral expenses and debt repayment. Otherwise how would a spouse cope financially without the other?
Products of life Insurance (4)Savings One way of saving for one’s future For specific goal or a traditional long term investment attractive plan With profits plan
Products of life Insurance (5)Example: CitadelIn the case of the customer’s deathbefore maturity, the beneficiary ispaid:1. The higher of Sum Insured +2. The Policy Value
Products of life Insurance (6)“Saving for your children’s futureeducation, buying a car, saving foryour dream holiday or for yourdaughter’s wedding” MSV Life
Products of life Insurance (7)Protection In the event of loss, what are you leaving behind?
Products of life Insurance (8) In the event of death of the policy holder, this helps the beneficiaries of an insured in any loss of income or even any inherent payable loans. If the insured dies during the policy term, a lump sum is payable to the beneficiaries.
Products of life Insurance (9) Proceeds receivable by the beneficiaries are untaxable in Malta. Offered in Malta as a decreasing life cover (HSBC, Citadel and MSV life) and a level term life insurance (Citadel) Decreasing term Most Popular in Malta and is not intended to leave cash to the beneficiaries.
Products of life Insurance (10)Retirement PlansMain reasons why retirement plan aregaining popularity Pension scheme in Malta are on a decrease Problem for those who did not save for the future
Products of life Insurance (11) Retirement Planning: “ Planning for the longest holiday” Citadel
Products of life Insurance (12) Requires paying on a regular basis Amount paid is not necessarily equal every time Contribution is paid according to the contract state and to suit the current personal circumstances of the policy holder
Products of life Insurance (15)In the event of death: Retirement plans pay back what is right for you, even if the event occurs “ …we will pay 101% of the value of your policy” MSV Life Paid to the beneficiaries or even to the trustees
Analysis of questionnaire (1) Do you think about the importance of planning for the future ?90% 80%80%70%60%50%40%30% 20%20%10% 0% Yes No
Analysis of questionnaire (2) Which of the following best defines life70% 64% insurance ?60%50%40%30% 20%20% 14%10% 1% 1%0% Financial Investment Home Loan Pension/ Saving for protection for opportunity Retirnement children their family Planning
Analysis of questionnaire (3)Ranking : Most popular life insurance companiesin Malta1. 3.2. 4.
Analysis of questionnaire (4) Do you own a life insurance policy?60% 50% 50%50%40%30%20%10%0% Yes No
Analysis of questionnaire (5)35% Life insurance products that are commonly30% 29% purchased25%20% 19% 19% 16%15% 14%10% 9%5% 00%
Analysis of questionnaire (6) Do you think that it is vital to have such policy?90% 80%80%70%60%50%40%30% 20%20%10%0% Yes No
Analysis of questionnaire (7) Do you have any plans to purchase life insurance in the future?60% 53%50% 47%40%30%20%10%0% Yes No
Analysis of questionnaire (8)“Many argued that buying life insurance is notnecessary or worth doing, and is not worthinvesting in. Some argued that for them lifeinsurance is not important” .
Analysis of questionnaire (9)“The majority of those that already own a lifeinsurance policy said that they are well covered”
Analysis of questionnaire (10) Reasons for having a life insurance policy60% 53%50%40% 33%30%20% 14%10%0% Means of Protection Means of investment Required by the lender
Analysis of questionnaire (11) Is the premium paid adequate for the cover given?80%70% 67%60%50%40% 33%30%20%10%0% Yes No
Analysis of questionnaire (12) The mainstream believe that buying a life insurance policy will give them peace of mind. All of those having a life insurance policy recommend it to their friends and colleagues.
Interview Offers saving plans and retirement Life insurance Loan protection policy Most sought life insurance product in the Maltese Market Industry indicates a steady growth in the Gross written premium each year. 6.5% decrease in the Local Life insurance market between the years 2010 and 2011
Conclusion (1) Life Insurance mainly provides a peace of mind to the policyholder; a promise to pay in the future when a loss occurs. The Life Insurance market plays an important role in the economy of the state: It is an important contributor to the nations’ GDP; Premiums collected form part of the national saving; Investments made are part of the national financial wealth; Claims paid by insurance companies form part of the national disposable income.
Conclusion (2) Life Insurance is a vast growing sector. The internet brought about certain advances in simplifying transactions. Although life insurance companies do not use the internet quite as much as other sectors do, it will not be long until this will be a widespread practice. With all members of the EU forming a single market, Malta expects more business and competition from member