MOTOR, FIRE SEGMENTS FUEL GROWTH IN MALAYSIA’S GENERAL INSURANCE INDUSTRY - PIAM

KUALA LUMPUR, Oct 8 (Bernama) -- Malaysia’s general insurance industry grew 4.0 per cent year-on-year in the first half of 2025 (1H 2025), with gross written premiums (GWP) rising to RM12.3 billion from RM11.8 billion, driven mainly by the motor and fire segments, according to the General Insurance Association of Malaysia (PIAM).

In its half-year performance briefing today, PIAM chief executive officer Chua Kim Soon reported that the motor insurance segment contributed an additional RM283 million in premiums, supported by a 35.6 per cent increase in hybrid and electric vehicle sales.

The fire segment added RM244 million, driven by a 3.7 per cent increase in commercial property policies, reflecting steady demand in the property insurance market.

He said that the industry reported an underwriting profit of RM629 million, up from RM476 million in 1H2024, as the combined ratio improved to 92.1 per cent from 93.7 per cent.

The claims ratio declined slightly to 57.4 per cent, while management expenses fell to 34.7 per cent.

“The industry continues to deliver good results despite challenges from the motor and medical health insurance segments, remaining resilient with steady premium growth and disciplined underwriting,” Chua said. 

He said external risks, particularly geopolitical tensions and inflation, would continue to influence market conditions.

“The United States tariffs of up to 19 per cent on a wide range of goods have created ripple effects on Malaysia’s export-driven economy.

“About half of manufacturers are facing up to a 10 per cent impact, while a third are seeing between 10 and 30 per cent,” said Chua.

On climate risks, he said Malaysia’s protection gap remains wide, with insurance coverage still low despite recurring weather-related disasters.

“The big floods in 2021 caused between RM5.3 billion and RM6.5 billion in losses, but insurance only covered about 20 to 30 per cent,” said Chua, adding that flood coverage is limited, with only 12 per cent of motor policies and about 30 per cent of fire policies including flood protection.

The fire insurance segment recorded a 10.4 per cent year-on-year increase in premiums to RM2.6 billion, supported by growth in commercial properties such as warehouses, office towers and data centres, including the KL1 IBX Data Centre in Cyberjaya.

Motor insurance remained the largest segment, accounting for 42.8 per cent of total GWP, followed by fire (21.1 per cent), miscellaneous (14.8 per cent), marine, aviation and transit (9.3 per cent), and personal accident (8.4 per cent).

Chua said the motor business continues to face profitability pressures from rising accident rates and inflationary costs.

“The number of road accidents in Malaysia has been on the rise, now reaching approximately 115 cases per 100,000 people. Since 2021, the costs of spare parts have been increasing by an average of 10 per cent each year.

“Additionally, personal injury awards are also on the rise, with more cases surpassing RM1 million,” he said.

Chua said the industry expects moderate growth for the full year, supported by expansion in commercial property insurance and recovery in personal accident coverage as travel activity continues to improve.

“The focus going forward will be on strengthening consumer awareness, encouraging better risk protection, and advancing digital adoption through partnerships with e-wallets and Insurtech platforms,” he added.

-- BERNAMA