Two years on from the most stringent of lockdowns, the lingering effects of the COVID-19 pandemic continue to shape the financial landscape, particularly in the insurance and financial planning sectors in Malaysia. Understanding these shifts in client priorities is no longer a matter of adapting to a temporary situation, but a fundamental part of a new, post-pandemic reality for financial advisors.  

The question is: are clients still hyper-focused on protection, health, and emergency funds, or are they reverting to pre-pandemic habits? The consensus among many is that the shift is a permanent one. 

 

1. Enduring focus on health and protection 

During the pandemic, the importance of health and financial security was starkly highlighted. This has led to an undeniable and sustained focus on protection-oriented products. According to data from the Bank Negara Malaysia, new business premiums for life and family takaful expanded by 6.4% in the second half of 2024, with a notable driver being investment-linked products, which are often perceived as more flexible and can include health and medical coverage. The Malaysian Financial Planning Council also revealed a significant number of Malaysians had to withdraw from their Employee Provident Fund (EPF) savings in the post-COVID era, underscoring the lack of sufficient emergency funds and the need for better financial planning.  

"Before the pandemic, many of my clients, especially younger ones, were more interested in investment-heavy plans with a smaller focus on pure protection," says Lee Wan Qi, a five-year MDRT member from Kuala Lumpur. "Now, the first thing they ask about is medical insurance, critical illness riders, and income protection. They saw firsthand how a medical emergency could wipe out a lifetime of savings." 

This sentiment is echoed by Jasmine Lily Ho, a seven-year MDRT member, who notes, "The pandemic was a wake-up call. Clients saw how fragile their financial safety nets were. They now leap at the idea of a three to six-month emergency fund, which was once just a ‘maybe’ for them. I’ve revamped my approach by offering hybrid takaful (a Sharia-compliant system of Islamic insurance) plans that blend health coverage with savings, and I host lively Zoom workshops to demystify budgeting. One client, a single mother in her 30s, was terrified of losing her income to illness. After we set up a RM15,000 emergency fund and a tailored critical illness plan, she told me she finally feels ‘in control’ and can focus on her daughter’s future 

 

2. The rise of digital tools 

The Movement Control Order (MCO) accelerated the digitalization of financial services in Malaysia. The online insurance market is now expected to grow, driven by widespread smartphone and internet usage. This has created a dual-pronged challenge and opportunity for financial advisors. While it provides a seamless way to connect with clients, it also places a greater emphasis on the advisor's role as a trusted human connection in an increasingly digital world. 

"Technology can provide convenience, but it can't build trust," says Jerrick Eng, a five-year MDRT member. "During the MCO, I started using Zoom and WhatsApp Business to conduct virtual consultations and share policy comparisons in real-time. For example, I had a client in Penang who was hesitant about a critical illness plan. I used a secure client portal to share a detailed breakdown of coverage options and followed up with a Zoom call to walk her through the numbers, addressing her concerns about affordability. She appreciated the clarity of the digital tools but said the personal discussion gave her confidence to proceed. The pandemic showed clients the value of having a real person to guide them, not just a faceless app." This highlights a key trend: while clients are comfortable with digital tools for transactions, they still crave personalized, human-centric advice for complex financial decisions. 

 

3. The need for financial literacy  

The pandemic also laid bare the need for improved financial literacy. Malaysian Financial Planning Council shared that less than 40% of Malaysians meet the minimum financial literacy score. This presents a massive opportunity for MDRT members to educate their clients on the fundamentals of financial planning.  

"My role has shifted from just a salesperson to a financial educator," explains Lee. "I'm not just selling a policy; I'm helping them understand the 'why' behind it why a critical illness plan is crucial, why they need an emergency fund, and how to balance their savings and investments. For example, I worked with a business owner who thought insurance was only for medical emergencies and had no emergency savings. Using simple infographics and case studies, I showed him how financial shocks could disrupt his business and why a six-month emergency fund and critical illness rider were crucial. He set up a RM 20,000 emergency fund and bought a tailored policy, gaining the confidence to grow his business without worrying about unexpected costs. She added, “The pandemic created a teachable moment, and it's our responsibility to seize it." 

The post-pandemic client in Malaysia is more informed, more cautious, and more aware of their own financial vulnerabilities. They aren't reverting to old habits; they have permanently adopted a more proactive and protection-focused mindset. For MDRT members, this means a greater emphasis on holistic financial planning that prioritizes health and emergency preparedness, all while leveraging digital tools to enhance, not replace, the irreplaceable value of a trusted human advisor. 

 

Contact: MDRTeditorial@teamlewis.com