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Kuala Lumpur, 30 October 2014 – Bank Negara Malaysia introduced the New Motor Cover Framework in 2012 and the Framework paves the way for the detariffing of motor insurance premiums by 2016.
The General Insurance Association of Malaysia (PIAM) supports the Government’s move to liberalize the insurance sector as it is expected to promote greater efficiency and a more equitable pricing structure for vehicle owners.
Motor insurance is a dominant class of business for the Malaysian General Insurance sector and it is growing steadily. However, there are significant imbalances in the premium rates for different risk profiles, segments and coverage types.
The detariffication of motor insurance will help to address and correct these imbalances in a manner that any premium increase will be implemented gradually so as not to burden the motoring public especially those from the lower income group. Liberalisation will also present an opportunity for the industry to adopt risk-based pricing, which will promote healthy competition among insurance companies. The end result will be more innovative products and better customer service which will definitely benefit the consumers. Drivers with good safety records and low-risk profiles will benefit as they could expect a lower premium.
About The General Insurance Association of Malaysia (PIAM)
PIAM is the national trade association of all licensed direct and reinsurance companies for general insurance in Malaysia. Currently, PIAM has 29 member companies.