Malaysians are buying more EVs than ever, but the motor insurance industry may not be ready for it

The General Insurance Association of Malaysia (PIAM) reports that the total Gross Written Premium (GWP) of the Malaysian insurance industry has increased this year, driven primarily by premiums from the motor sector amid strong growth in electric vehicle (EV) sales.

In detail, the total GWP figures were reported to have grown 4.0% from RM11.8 billion recorded in 1H 2024 to RM12.3 billion in 1H 2025. Among this, Motor GWP has shown a growth of 5.7% year-on-year (YoY) from RM5.0 billion to RM5.3 billion — showing that Malaysians are purchasing more cars and at more premium price points. 

PIAM Chief Executive Officer, Chua Kim Soon, attributed this growth to the large influx of new vehicle registrations in the EV segment — jumping from 3.6% to 7.8% of total vehicle registrations. With the introduction of the Proton eMAS 5 (stylised as e.MAS 5), he expects the numbers to grow even more.

Although this makes the motor insurance industry the largest line in the insurance business at 42.8% of total premiums, PIAM mentioned that the motor insurance industry continues to bear underwriting losses with a combined ratio of 102.2% (ratios above 100% meaning a loss) — mostly due to higher claim ratios and frequencies. 

Chua also mentioned that insuring EVs is a different ball game due to the new challenges and risks associated with modern EV technologies, such as more complex batteries, cybersecurity concerns, and artificial intelligence. He added that the organisation is examining the entire ecosystem to assess whether the industry is ready to handle EVs — including whether private workshops can adapt to EV repairs, how battery life coverage is managed, and if JPJ recognises specific EV standards.

Overseas, insurance premiums for EVs are reportedly much higher than those in Malaysia to account for these added complexities. PIAM is currently conducting further research to support a sustainable and accessible local EV ecosystem through data-driven strategies that benefit both consumers and the general insurance industry.

Comparing the combined ratio figure from the year before, though, it appears the situation has improved slightly, moving from 103.4% to 102.2% YoY. While it may be easy to assume motorists are intiating lesser claims thanks to decreased accidents and improved road safety, Chua told Autobuzz.my that that may not be the case, as it is still too early to conclude.

The number of road accidents in Malaysia continues to be one of the highest in the world, with rising trends showing numbers up to 115 cases per 100,000 people. This is especially concerning, Chua says, since there are “more than 50% of motorcyclists in Malaysia are uninsured.”

Noting that getting involved in an accident with an uninsured motorcyclist can be troublesome, Chua assured that, “The organisation is working together with the Road Transport Department (JPJ) and the Royal Malaysia Police (PDRM) on tackling the issue,” highlighting the need for more education to reduce these numbers. 

Additionally, PIAM, along with PDRM, has announced the e-Police Reporting system — an online portal for filing police reports accessible via the PDRM website, said to streamline and make the police reporting process easier and straightforward for people in Malaysia.

Introduced on 1 September 2025, the e-Police Reporting system is still in its pilot phase and will only be receiving reports for minor accidents along the PLUS and North-South highways. Since its introduction, PIAM says 114 online reports have been lodged as of 3 October 2025, and encourages travellers along said highways to use the system in the event of a minor accident.