The general insurance industry had suffered a decline of 0.8% in 2019 with total gross direct premiums standing at RM17.41 billion, said the General Insurance Association of Malaysia (PIAM). The total gross direct premiums collected in 2018, in contrast, was RM17.92 billion.
Motor continued to top the general insurance industry in 2019 as the largest class, with a share market of 48.3%. It recorded gross direct premiums of RM8.42 billion, which saw a 0.4% drop from 2018. This is in spite of an increase in the sales of new vehicles in 2019, amounting to 604,287 units of total vehicle sales compared to 598,598 units in 2018.
Additionally, 2019 also saw motor insurance recording an underwriting loss of RM335 million, with RM5.48 billion being paid out in motor claims. In other words, RM15 million is being paid out daily for property damage, bodily injuries, and vehicle theft. This is likely due to the high accident and fatality rate in Malaysia.
On the brighter side, the number of stolen vehicles has continued to decrease, declining 21% from 13,581 to 10,729 vehicles for all classes. The downward trend has begun in 2014.
After motor, fire insurance followed as the next largest class, with gross direct premiums of RM3.37 billion. This is a 1.1% increase from 2018.
Marine aviation and transition (MAT) insurance also saw an increase of 5.3%, with gross direct premiums of RM1.35 billion. This is attributed to the recovery of the offshore oil-related sector.
The miscellaneous class – comprising bonds, liabilities, engineering, and workmen’s compensation – in contrast, dipped 2.9% with gross direct premiums at RM2.08 billion.
Medical and health insurance as well as personal accident insurance also saw a decrease of 11.4% at RM1.02 billion and 1.3% at RM1.19 billion, respectively. This is due to an increase in medical claims, which is caused by inflation – among many other reasons – given that Malaysia has one of the highest medical inflation rates in the ASEAN region.
PIAM predicts that the general insurance industry will continue to stagnate in 2020, given the bleak economic outlook for Malaysia in the upcoming year. Not only is the country faced with a challenging operating and business climate, it is also impacted by the effects of the ongoing Covid-19 crisis.
(Source: The Sun Daily)