The Insurance Industry's Problems during and After the Pandemic

Abstract

This study examined the financial challenges experienced by Malaysian insurance companies following the onset of the COVID-19 pandemic. Using secondary financial data drawn from the public disclosures of 21 companies operating in the Malaysian insurance industry, the study compared net premiums earned and claims incurred across the financial years 2016-17 to 2019-20 against the pandemic-affected year 2020-21. The analysis was motivated by the view that insurance is a highly complex business built on continuous underwriting, claims processing, and customer service, and that a sudden shock such as COVID-19 exposes insurers simultaneously as claims payers, employers, and capital managers. Drawing on the existing literature on pandemic-related insurance risk, the study situated the Malaysian evidence within a wider body of research documenting rising claims, restricted liquidity, misrepresentation and fraud risk, and disrupted business continuity across insurance markets internationally. The findings showed that the majority of the companies examined experienced claims that exceeded their net premiums earned during the pandemic phase, indicating a marked deterioration in underwriting performance relative to the pre-pandemic years. The results suggest that the pandemic imposed considerable financial strain on the Malaysian insurance sector, consistent with international evidence of solvency pressure during COVID-19. The study contributes practical insights for insurers, regulators, and policymakers seeking to strengthen the resilience of the insurance sector against future large-scale health and economic shocks, and offers a basis for further company-level and cross-country comparative research.