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GENERAL INSURANCE INDUSTRY EXPECTS
CONTINUED GROWTH IN 2H 2014
Non-Motor Business Lines Performing Well with Strong Growth Potential
Kuala Lumpur, 23 September 2014 – The Malaysian General Insurance industry has continued to register steady growth in the first six months of 2014 with its gross written premium growing by 6.4 per cent to RM 8.9 billion compared to RM 8.3 billion registered in the same period in 2013.
The General Insurance Association of Malaysia (PIAM) foresees non-motor business lines and products ranging from Medical and Health Insurance, Liabilities Insurance, Personal Accident, Fire and Other Classes of Insurance becoming the catalysts for growth over the next few years, driven largely by changing demographics, consumers’ needs for better protection and increased public awareness about the benefits of general insurance.
During the period reviewed, the largest insurance class, Motor Insurance, saw an increase of 8.3 per cent in gross written premiums, while Liabilities and Medical/Health Insurance recorded impressive gains of 13.9 per cent and 10.9 per cent respectively. Fire or Property insurance grew 4.2 per cent while Personal Accident increased 4 per cent.
PIAM Chairman, Chua Seck Guan, said, “The General Insurance industry demonstrated steadfast resilience in the first half of 2014. While the dominant Motor Insurance business continued to be a key segment for the industry owing to the increasing numbers of new vehicles registered, other personal and commercial lines products have shown strong potential to be the new catalysts for future industry growth”.
On the critical issues facing Motor Insurance PIAM highlighted that third party claims are increasing at an alarming rate because of high compensation amounts for bodily injuries and property damages as well as vehicle theft in the country.
Overall Motor Insurance claims paid out by local general insurers climbed 11 per cent to RM 2.59 billion in first half of 2014, compared to the same period last year. In 2013 total Motor Insurance claims were 17 per cent higher at RM 5.33 billion compared to RM 4.56 billion in 2012.
Moving forward, PIAM has identified raising road safety awareness at the national level, inculcating and instilling good driving habits and the reduction of vehicle thefts as key priorities for the industry.
PIAM Chief Executive Officer, Mark Lim, explained, “road accidents and vehicle thefts pose serious challenges for the general insurance industry as they contribute significantly to the losses of motor insurers. In 2013 motor insurers paid out RM1.29 billion in third party bodily injuries, an increase of 12 per cent over 2012. Third party property damage claims were RM 295 million, an increase of 28 per cent over 2012. Meanwhile, total claims incurred for motor thefts amounted to RM 627 million in 2013, an increase of 21 per cent from 2012.”
On a more positive note, the total number of vehicle thefts reduced to 34,117 units in 2013 from 37,020 units in 2012. “This latest reduction in vehicle theft reflects the proactive and concerted efforts taken by the various law enforcement agencies and stakeholders, such as the Royal Malaysian Police and the Customs authorities, to combat vehicle theft. It also reflects increasing public awareness on the ground, with individual vehicle owners taking measures to prevent car theft through the effective use of anti-theft and other deterrent devices,” said Lim.
Lim emphasised that the industry is actively putting in place both tactical and strategic programs to check the rising vehicle theft trends. These include the setting up of a Motor Fraud Register, formation of the Vehicle Theft Reduction Council with key stakeholders and close collaboration with the Prime Minister’s Department, PEMANDU’s in national crime reduction efforts.
To drive home the important message of road safety in the minds of every motorist, Lim said PIAM would continue to work closely with government agencies and relevant organizations and associations to strengthen initiatives targeted at promoting road safety awareness.
As part of its efforts to provide peace of mind to motorist, PIAM has teamed up with the Malaysian Takaful Association (MTA) to set up the Accident Assist Call Centre (AACC) at the National level to provide emergency assistance to policyholders involved in road accidents. The 24-hour hotline 1300-22-11-88 also offers accident towing services and attends to all claims enquiries to help the motorist.
Beyond the immediate business and market challenges, the Association will also be focusing on and investing in Human Capital and Development to ensure that its talent pipeline will continue to be filled. In this regard PIAM will be implementing a host of talent outreach programs and initiatives to profile the general insurance industry as a career of choice to various tertiary institutions and centres of learning in the country.