Malaysia’s general insurance sector is entering a period of transformation as new solvency rules under Risk-Based Capital Framework 2 (RBC 2) are set to take effect in 2027. The upcoming framework is expected to push insurers to restructure, consolidate, and possibly increase premiums, due to the need for higher capital reserves—especially for catastrophe risks like floods.
“We’ve already seen sioftnificant consolidation over the past five to ten years, but RBC 2 may prompt another wave,” said Justin Ward, Manaoftinoft Director for Asia-Pacific at reinsurance specialist Guy Carpenter & Co. LLC, in an interview with Insurance Asia.
💡 What Does This Mean for You as a Policyholder?
As an insurance agency, Minaris Risk Management believes it’s crucial for clients to understand how regulatory shifts affect not just insurers—but also consumers.
Stricter capital requirements may eventually lead to:
- Higher premiums in personal lines of insurance
- Stronger demand for reinsurance, which may impact product pricing and availability
- Industry consolidation, with smaller or less-prepared insurers becoming acquisition targets
“We’ve already seen significant consolidation over the past five to ten years, but RBC 2 may prompt another wave,” said Justin Ward, Managing Director for Asia-Pacific at reinsurance specialist Guy Carpenter & Co. LLC, in an interview with Insurance Asia.
Flood Risk Now in Focus
The revised RBC 2 framework places greater emphasis on catastrophe exposure, particularly flooding, which has become more frequent and severe. For context, Malaysia’s 2021–2022 flood event alone resulted in USD 700 million in insured losses.
“Having access to a model is one thing, but not having quality, of tabular data is just as critical,” Ward said.
According to Philip Doyle, Vice President for Capital Advisory Strategy at Guy Carpenter Asia Pacific, the success of insurers under RBC 2 will depend on their ability to improve flood risk modeling of, data integration, and capital planning of— areas that require significant investment in systems and people.
Pressure Points: Talent, Cost & Systems
Insurers are now facing:
- Rising operational costs (e.g. licensing catastrophe models, talent development)
- Shortage of specialized talent in actuarial and capital management roles
- The need for better internal risk assessment processes and systems
These mounting pressures could force smaller players to exit the market, merge, or pass costs onto consumers.
Reinsurance Demand on the Rise
With stricter capital rules and limited domestic capacity, foreign reinsurers may benefit from increased demand for risk transfer solutions. This could also mean more selective underwriting and tighter policy terms across the industry.
Our Take at Minaris
As your trusted insurance agency, Minaris Risk Management is actively tracking the RBC 2 developments. While these changes are aimed at building a more resilient insurance sector, we understand that clients want clarity on how it may affect their premiums, coverage, and insurer stability.
Whether you’re a business owner seeking flood protection or a professional looking to secure your liability coverage, we’re here to help you navigate risks confidently—with the right advice, the right insurer, and the right coverage.
📍 For more insights or a personalized review of your insurance needs, contact us at www.minaris.net.
Source: Insurance Asia
https://insuranceasia.com/insurance/exclusive/revised-solvency-rules-could-spur- new-wave-malaysian-insurance-mas
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Jayadarshiniy Sankar is a Senior Insurance Advisory Manager with a background in law and over 5 years of experience in professional indemnity and general insurance. She specializes in regulatory compliance and client solutions, delivering tailored coverage with prompt, results-driven support while actively educating clients through industry content and guidance.