Malaysia’s general insurance sector saw a 6.9% year-on-year increase in gross written premiums (GWP) in 2024, reaching RM23.1 billion, despite a simultaneous 11.0% decline in underwriting profits. The growth was largely attributed to higher vehicle sales and renewed momentum in infrastructure and liability-related insurance, while profitability was pressured by rising claims costs and inflationary effects.

According to the General Insurance Association of Malaysia (PIAM), the industry remained resilient in the face of global economic challenges, including trade tensions and elevated inflation. Motor, Fire, Marine Aviation and Transit (MAT) segments were among the leading contributors to premium growth, underpinned by industrial recovery efforts and strong domestic demand.

Motor insurance retained its position as the largest contributor to total GWP, with a 6.7% increase in 2024 amounting to an additional RM651.1 million in premiums. This was bolstered by a 2.1% rise in new vehicle registrations. However, profitability in the motor segment remained under strain from increased road accident claims, the reintroduction of the Sales and Services Tax (SST), and higher repair costs. These factors collectively pushed net claims incurred upward by 18.8% over five years, reaching RM6.5 billion in 2024.

Fire insurance premiums rose by 5.8%, driven by a 4.9% increase in average premiums due to elevated reconstruction costs. While the segment remains the second-largest by premium, its Net Claims Incurred Ratio (NCIR) stood at 34.1%, reflecting persistent cost pressures from reinsurance and weather-related events.

Medical and Health Insurance (MHI) premiums experienced a 10.0% increase, despite a 12.5% decline in average premiums. The NCIR for MHI remains high at 68.3%, indicating ongoing challenges linked to medical inflation. Without broader industry reforms, the segment may face further difficulties in maintaining profitability.

The liabilities segment grew by 8.1%, supported by rising exposures in public and commercial risk areas. Notably, the Contractor’s All Risk and Engineering (CARE) class under miscellaneous lines posted a 141.6% increase over five years, reflecting growth in mega infrastructure projects.

Overall operational efficiency in the industry remained stable, with a combined ratio of 93.4% and net commission ratios steady at 10.4%. Investment income contributed 60.0% of total operating profits, cushioning the impact of increased management expenses and claims.

The industry’s overall NCIR rose from 53.7% in 2022 to 57.6% in 2024, largely due to claims from the motor and MHI portfolios, both of which have returned to pre-pandemic levels. These two segments together account for over 60% of net earned premiums, placing them at the centre of current cost pressures.

Despite these challenges, the general insurance sector is expected to continue expanding in 2025, supported by increased demand for digital insurance products, interest in electric vehicle (EV) insurance, and heightened focus on sustainable underwriting and climate risk resilience. According to Bank Negara Malaysia, the national economy is projected to grow steadily into 2026, supported by consumer spending, investment, and export recovery. Nonetheless, inflation is expected to edge up, with medical cost inflation forecasted to rise to 16.4% in 2025—significantly above the APAC average of 10%.

PIAM noted that the general insurance industry’s outlook for 2025 remains cautiously optimistic, with growth prospects balanced by persistent cost challenges and evolving regulatory expectations.

(Source: PIAM) 

• TAGS:
• Fire Insurance
• General Insurance
• General Insurance Association of Malaysia
• Gross Written Premiums
• Health Insurance
• Insurance
• Medical and Health Insurance
• Medical Insurance
• Motor Insurance
• PIAM
• Premiums