General insurance premiums up 6.9% in 2024, but profits down

The General Insurance Association of Malaysia (PIAM) said this growth in general insurance premiums was mostly thanks to the recovery in vehicle sales and sustained momentum in infrastructure and liability-related insurance.

However, PIAM said industry players saw their underwriting profit slashed by 11% last year.

PIAM said motor insurance was the largest contributor to premium growth last year, with an additional RM651.1 million yielding a 6.7% rise, thanks to a 2.1% increase in new vehicle registrations compared with 2023.

However, it said motor insurance providers saw their profits come “under pressure” due to inflation in vehicle repair costs, the service tax increase for insurance firms and a rise in road accident claims.

PIAM said the medical and health insurance sub-sector also recorded growth with a 10% surge in premiums in 2024, despite a 12.5% decline in average premiums.

“However, this segment’s net claims incurred ratio remains elevated at 68.3%, reflecting the ongoing challenges of medical inflation.

“If premium levels are not managed moving forward through industry-wide initiatives, the industry could face future headwinds in sustaining profitability and managing risks within this class of insurance business,” it said in a statement.

The group nonetheless expressed confidence that the general insurance industry was on a steady path of growth despite external uncertainties and inflation.

Bank Negara Malaysia previously called on insurers and takaful operators to review their repricing strategies for more “reasonable implementation” after reports of a 40% to 70% hike in medical insurance premiums this year.

Insurers and takaful providers said the increased premiums were “unavoidable” in light of rising claims and medical inflation.