Malaysia's General Insurance Industry Posts RM1.2 Billion Underwriting Profit In 2025

Christina Chandra

8th May 2026 - 4 min read

Malaysia’s general insurance industry recorded an underwriting profit of RM1.2 billion in 2025, up RM125 million from the year before, according to full-year results released by Persatuan Insurans Am Malaysia (PIAM) on 6 May 2026. Total premiums collected grew 4.8% to RM24.2 billion.

Underwriting profit is what insurers keep after paying out claims and covering operating costs. The industry’s Combined Ratio held at around 93%, meaning for every RM100 collected in premiums, RM93 was spent on claims and costs. Anything below 100% means the industry is collecting more than it pays out overall.

The overall picture looks stable, but some segments are doing far better than others, and for anyone holding a motor policy, the numbers behind the headline are worth understanding.

Motor Insurance Is Still Running At A Loss

Motor insurance is the largest segment in Malaysian general insurance, accounting for 45.2% of all premiums collected at RM10.9 billion. Yet it remains the only major line operating at a loss, with a Combined Ratio of 103% and an underwriting shortfall of RM289.3 million.

A Combined Ratio above 100% means claims and expenses exceeded the premiums taken in. The motor segment has been in this position for some time, and while the gap narrowed slightly in 2025, it has not closed.

Why Car Repairs Are Getting More Expensive

Two cost pressures are behind the losses. Private car claim frequency stayed above 7% in 2025, with younger drivers in high-volume segments accounting for a disproportionate share of claims. At the same time, the average private car claim amount rose to RM8,831, driven by spare parts inflation affecting models including the Proton Saga and Proton X50.

When parts consistently cost more to replace, every claim becomes more expensive to settle. That cost does not stay within the industry; it feeds back into the pricing decisions insurers make when policies come up for renewal.

Travel Recovery Drove Personal Accident Growth

Personal Accident (PA) insurance was the fastest-growing segment in 2025, rising 12.2% to RM1.6 billion. The growth was largely driven by higher uptake of travel insurance, as outbound travel has continued to recover since 2023. PIAM noted a growing trend of Malaysians travelling to destinations where the ringgit has greater purchasing power, which corresponds with higher demand for travel-related coverage. Wider availability through digital channels also contributed to the segment’s expansion.

Fire Insurance Premiums Are Climbing With Rebuild Costs

Fire insurance grew 6.9% to RM5.0 billion and reported an underwriting profit of RM700.8 million with a Combined Ratio of 69.5%. Growth was driven by sum-insured inflation, which refers to the rising cost of rebuilding a property from scratch rather than its market value. As construction and materials costs have increased, the replacement value of existing homes has risen too, pushing insured amounts higher even for properties that have not changed.

Higher Premiums And Coverage Gaps Are The Real Story For Policyholders

If you hold a motor policy, the ongoing losses in this segment point toward continued upward pressure on premiums. The average private car claim has risen to RM8,831, driven by spare parts inflation on models including the Proton Saga and Proton X50. When claims consistently cost more to settle, that eventually feeds into what you pay at renewal.

For property owners, the sum insured on your fire policy is worth a second look if it has not been updated in a few years. Rebuild costs have risen alongside construction and materials prices, and a policy that no longer reflects current costs can leave a meaningful shortfall after a total loss.

Two emerging risks are also worth watching. EV repair costs and the limited availability of specialised workshops are factors the industry is still pricing in, which may affect motor coverage terms for EV owners over time. On the climate side, PIAM noted that many policyholders affected by the Hat Yai floods in December 2025 did not have coverage that extended to flood damage under their standard policies, a gap the industry is now working to address.

Christina Chandra

Christina writes about personal finance with an eye for making the complicated feel straightforward. She is drawn to the everyday money decisions people face and genuinely enjoys finding the clearest way to explain them. Between articles, she is probably napping, on a hiking trail, or terrorising her sister’s cats.

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