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Kuala Lumpur, 28 February 2019 – The General Insurance Industry registered a growth of 1.5% in 2018 on the back of higher premiums from its two largest classes of insurance, Motor and Fire. Gross written premiums amounted to RM 17.92 billion. Motor remained the largest class with a market share of 47.3% followed by Fire at 19.6% and Marine Aviation & Transit (MAT) at 7.4%.
Motor insurance recorded gross written premiums of RM 8.47 billion with a growth of 1.8% supported by increases in new vehicle sales in both the private motor cars and commercial vehicles segments. Close to 600,000 new vehicles were sold in 2018 compared to 580,000 in 2017 as a result of increased demand during the tax free months from June to August 2018.
Fire insurance grew 2.8% and maintained its position as the second largest class with gross written premiums of RM 3.51 billion. MAT insurance declined 0.3% with gross written premiums of RM 1.33 billion owing to reductions in the Cargo and Offshore Oil Related classes. Medical and Health insurance (MHI) grew 5.2% to RM 1.16 billion while Personal Accident insurance rose 6.9% to RM 1.21 billion. The Miscellaneous Class recorded a dip of 4.8% with gross written premiums at RM 2.24 billion. Within this class Bonds, Liabilities, Engineering and Workmen’s Compensation insurances declined year on year. Uncertainty over some mega construction projects which are currently under review contributed to the slowdown.
Malaysia has one of the highest road accident numbers in the world. Total Motor insurance claims incurred by the industry rose to RM 5.45 billion in 2018. PIAM is committed to work with the Government and all agencies to reduce road accidents nationwide. The industry is in close collaboration with both Jabatan Pengangkutan Jalan (JPJ) and Jabatan Keselamatan Jalan Raya (JKJR) at the Ministry of Transport. PIAM is working with the Ministry to enable insurers to have access to traffic summons data which can then be used in the calculation of insurance premiums. In this way bad risks will be recognized while good drivers with summons-free record will be incentivized.
At the recent Chinese New Year (CNY) Road Safety Campaign officiated by the Minister of Transport, PIAM launched its music video on road safety. The video features PIAM’s road safety campaign Ambassador, Adibah Noor with cameos by the Minister of Transport YB Anthony Loke and the Deputy Minister of Transport, YB Dato’ Kamarudin Jaffar. PIAM Chairman Antony Lee said, “We believe that the general public can relate to this music video as it highlights the bad habits that we have adopted knowingly or unknowingly on a daily basis, which compromises our safety on the road. If Malaysians are able to change these bad driving habits, we remain optimistic on the possibility to reduce national accidents by 20% in the near term and 50% in the longer term. Everyone needs to play their role to make our roads safer. Drivers need to follow traffic rules and observe speed limits, because speeding is one of the major causes of accidents. We hope this music video will be able to reach out to all Malaysians and make a difference.”
Based on the latest statistics from the police it is encouraging to note that there has been a slight decrease in the number of accidents during Op Selamat in conjunction with CNY 2019. PDRM statistics show that the number of accidents reduced by 1% during the 15-day period compared to the same period last year (20,829 in 2019 compared to 21,041 in 2018). Fatalities also reduced by 4.4% from 226 to 216 deaths.
PIAM CEO Mark Lim said, “Motorists involved in accidents can rely on PIAM’s Accident Assist Call Centre (AACC) for help. The AACC toll-free hotline 15-500 operates 24/7 nationwide, providing emergency roadside assistance such as towing services and responding to insurance claims enquires from all motorists. It provides peace of mind to all road users and prevents any unwanted third party intervention which can confuse or take advantage of victims, especially at the scene of an accident.”
Overall the number of stolen vehicles continued its downward trend in 2018 declining 25% from 16,729 to 12,496 vehicles for all classes. Since 2015 lesser vehicles have been stolen year on year. PIAM and the Vehicle Theft Reduction Council of Malaysia (VTREC) commend the unrelenting efforts, commitment and hard work of the Police, Customs and other law-enforcement agencies to combat vehicle theft in the country. The VTREC platform is a success story for the industry. Positive outcomes can be achieved with concerted efforts by all stakeholders (both government and private sector) working together for a common purpose. To this end PIAM will expand the scope of VTREC to include reduction of road accidents as a key objective of the council. Discussions with all stakeholders on the broadening of VTREC’s scope are currently ongoing.
The Phased Liberalisation of the general insurance industry has gained a steady momentum since it took effect in 2016. PIAM member companies have introduced new and innovative products to better serve consumers and meet their various protection needs. As at 25 February 2019, the industry has launched 48 new Motor and 46 new Fire products in the market. The industry eagerly anticipates further liberalisation and look forward to the eventual opening up of the market.
The Fraud Intelligence System (FIS) which was implemented in late 2017 has completed its pilot phase. It will help insurers to combat motor insurance fraud in Malaysia. This is an industry-wide initiative with the participation of all member companies. Deploying the latest data analytics technology, FIS provide fraud alerts to insurers when a claim is first submitted by a motorist. The system will expose fraud syndicates at work and provide leads for detailed investigation by insurance companies, eventually leading to their prosecution under the law.
Looking ahead the Malaysian economy in all likelihood will remain on a steady growth path but current challenges in the operating and business climate will prevail. PIAM anticipates the general insurance industry to continue growing at a slow rate for 2019.
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