SERVICE QUALITY, AWARENESS AND AGE: FACTORS THAT INFLUENCE PENETRATION OF LIFE INSURANCE IN MALAYSIA

Abstract

A low rate of insurance market penetration indicates a slower rate of economic expansion. Malaysia's life insurance penetration rate over the previous five years of 2020 was only 54 percent, which was low compared to other Asian countries. Malaysians will be exposed to more financial risk if the country's life insurance coverage rate is unfavourable. Based on the observation, people are always sceptical when talking about topics that are related to insurance. Most of the public have negative thoughts about insurance. Most people nowadays think that insurance is fraud either in terms of purchasing insurance or becoming an insurance agent. This is because they do not have enough knowledge about insurance as a whole. Therefore, based on the statement above, the objective of this study is to know the factors that may lead to the low penetration of life insurance in Malaysia. Service quality, awareness, and age are the factors related to the low penetration of life insurance. All the data were analysed by collecting the primary data with a questionnaire. The researchers distributed the questionnaire to the sample of 150 respondents in Temerloh, Pahang, Malaysia. The data collected were analysed using SPSS to come up with the research result. In this research, it was found that service quality, awareness and age are significant with low penetration of life insurance in Malaysia.