Strategic Planning in the Malaysian Insurance Industry

Abstract

This article examines the extent of planning and the key essential characteristics of planning in the Malaysian insurance industry. A survey was conducted with the support of the Malaysian Insurance Institute. A total of 59 insurance companies involved in life, general and composite businesses were given the questionnaire. A total of 36 companies responded the questionnaire. The findings showed that all the insurance companies conducted formal planning. However, only one quarter have a planning unit/section. The extent of planning conducted varies according to the type of insurance business and existence of planning unit/section. The Chief Executive Officers are highly involved in the planning activities. Planning activities are focused at the functional level, short term, and the medium term. There are more firms conducting an internal analysis than an external analysis. As for corporate objectives, underwriting profit is rated as most important and the sum insured as least important. It was also found that nearly 89 % of the firm pursed a combination strategy of growth and stability. Overall, nearly 75% considered the effectiveness of the planning system in achieving corporate goals, and about 37% considered it as most important towards better performance. Implications of the findings are also discussed.