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Kuala Lumpur, 9 February 2015 – PIAM: GENERAL INSURANCE INDUSTRY SHOWS RESILIENCE IN 2014, RECORDS 5.9% GROWTH
Strong Performance and Growth Achieved For Non-Motor Business Lines
The General Insurance Association of Malaysia (PIAM) reported that the general insurance industry grew at a steady rate in 2014 with gross written premiums increasing by 5.9% to RM17.09 billion as compared to RM16.15 billion in 2013. The Association attributed the industry’s resilient performance to increased domestic demand and a greater awareness of insurance risks and benefits among consumers and the business community.
Motor Insurance, being the dominant business line, registered a steady 5.4% growth for the year. Similarly, the second largest line, Fire Insurance, grew by 5.8%. Non-motor business lines continued their robust performance with high growth rates of 9.4% for Medical and Health Insurance (MHI) and 10.5% for Liabilities Insurance. Marine, Aviation and Transit (MAT) accounted for a strong 8.7% growth.
Underwriting profit increased from RM 1.46 billion in 2013 to RM 1.49 billion in 2014, with the overall industry loss ratio remaining unchanged at 56.7% in 2014.
PIAM Chairman, Chua Seck Guan said, “The Malaysian general insurance industry has proven its resilience once again to emerge relatively unscathed from last year’s challenging economic and difficult operating environment. We believe demand for insurance protection and products will grow steadily, driven largely by individual and business needs for better protection, and increased awareness about insurance benefits to mitigate risks in an increasingly uncertain world.”
Chua cited that despite the severe floods that hit the country recently, the industry had started 2015 with cautious optimism, but with recent events such as falling oil prices, global market volatilities and the impending GST implementation, the industry will need to remain vigilant and stay focused to face the challenges head-on.
In the wake of the recent flood disasters, PIAM and its member companies acted swiftly by offering prompt assistance to all affected policyholders by simplifying and expediting their claims handling and payout. Flood victims were allowed the option of paying their annual premiums on an instalment basis to lessen their financial burden.
In addition, some member companies have also waived certain restrictive conditions and the excess amount for claims specified in some policies while others deployed their staff and agents on the ground to clean up affected homes and schools. Going forward the industry stands ready and is committed to continue providing flood coverage for individuals and businesses, when requested.
So far 3,500 flood related claims have been lodged with PIAM member companies amounting to RM220 million. Actual claims paid stood at 829 with a total value of RM8.3 million. The industry is well-positioned to pay out all claims arising from this disaster as insurers are well capitalized and have the necessary risk management programs in place to cushion such losses.
Highlighting the critical issues faced by the insurance industry in 2014, Chief Executive Officer, Mark Lim said, “The motor sector continues to bear the heavy burden of increased claims cost. During 2014, the industry paid out RM5.04 billion in motor insurance claims. This represents a staggering RM13.8 million paid out daily as compensation for bodily injuries and property damages caused by road accidents as well as vehicle theft. Motor claims increased by 5.4 % from 2013 with the rising trend showing no sign of abating. PIAM will continue to focus on inculcating road safety and good driving habits among all motorists to minimize accidents and fatalities on Malaysian roads. At the same time the industry will implement a fraud intelligence system to combat the high incidence of fraudulent and inflated claims in the market.”
On a more positive note, Lim stated, “Vehicle theft showed a 15% reduction from 2013 for all classes with theft of private cars reduced by 5% in 2014. PIAM applauds and compliments the ongoing efforts of the Police, Customs and law-enforcement agencies in arresting and convicting the theft syndicates. Moving forward the Association will do more to bring down the high vehicle theft rate in Malaysia. It will work closely with the Vehicle Theft Reduction Council (VTREC) which brings together all stakeholders nationwide to collaborate on several joint initiatives to combat the problem.”
On the important topic of road safety, PIAM will continue to promote the services of the Accident Assist Call Center (AACC) which provides peace of mind to all motorists on the roads. Basically the AACC provides emergency assistance to policyholders involved in road accidents. The 24/7 hotline 1-300-22-11-88 also offers towing services and attends to claims enquiries.
In line with the industry’s growth, PIAM has to ensure a continuous and sustained flow in its talent pipeline. The Association will soon launch a General Insurance Internship for Talent program known as Project GIIFT. The program aims to showcase the industry and attract new talent who will eventually be groomed as the next generation of leaders. It offers undergraduates of all study disciplines at both public and private universities an exciting and unique opportunity to spend 12-weeks with PIAM member companies.
Commenting on the new talent outreach program, Chua explained, “Through this initiative, young talents will gain invaluable insights into the global and dynamic nature of our industry. They will also be exposed to the wide range of careers available in the general insurance and reinsurance world.”
Looking ahead to 2015, Chua said, “PIAM will continue to play an active role in ensuring long-term growth for the general insurance industry. 2015 will see the Association proactively engaging all key stakeholders to bolster the capabilities and elevate the profile of the general insurance industry. PIAM will also intensify its consumer education activities to further enhance public awareness and understanding of insurance products and issues. In so doing, PIAM will create a favorable business environment for its member companies and one which will support the initiatives under the National Agenda.
At the briefing, PIAM also unveiled a new logo in line with the overall transformation of the Association. The new logo with a stylized and bold “P” reflect the dynamism and vibrancy of the industry in embracing the future with confidence, commitment and professionalism.