Whereas motor insurance coverage stays the final insurance coverage business’s largest line of enterprise in Malaysia, contributing RM10.9 billion – or 45.2% of whole premiums – in 2025, the phase continued to submit underwriting losses, with RM289.3 million recorded final 12 months.
At a mixed ratio of 103%, this displays that claims payout exceeded premiums collected, stated the Normal Insurance coverage Affiliation of Malaysia (PIAM). The rising variety of claims and the severity of those have been considerations famous by the affiliation at a media briefing on the business’s efficiency earlier this week.
It stated that the declare frequency for personal automobiles remained above 7% in 2025, including that fashions such because the Proton X50 and X70 confirmed a better frequency of claims, concentrated amongst youthful drivers of those automobiles. On the identical time, declare severity had additionally risen significantly, with the typical value per declare growing by about 20% to RM8,831 in 2025, notably for fashions such because the Proton Saga and X50.
The explanation for this rise was resulting from a rise within the value of spare components, in line with PIAM CEO Chua Kim Quickly. “Within the case of the X50 and X70, most of those components are imported from China, in order that’s the place the associated fee impression is. While you import these spare components, then you’ve that value inflation impression on the restore value. That’s principally the primary motive why the typical claims value for these automobiles has spiked up,” he stated.
As for the share of the spare components elevated that has been noticed, Chua stated that it was nonetheless in single digits. “It varies from mannequin to mannequin. I don’t have the numbers at hand, however I do know that the spare components inflation improve on a year-to-year foundation is on a single-digit degree. That for some fashions is clearly greater than others – should you discuss some luxurious automobiles, then undoubtedly the spare components for these will probably be barely greater,” he defined.
Whereas the premium for electrical automobiles (EVs) haven’t gone up, Chua stated that PIAM is trying into the insurance coverage protection construction for these, given the rising restore prices related to the know-how in them, together with superior driving help system (ADAS). He stated that whereas the know-how might assist cut back accidents and save lives, it might probably additionally spike up the severity of restore prices when accidents do happen.
“In case you take a look at EVs, the potential value impression comes from not solely the battery. Relying on the mannequin, the battery usually accounts for about 30 to 50% of the associated fee, and that’s one issue. The opposite is the ADAS that characteristic on these automobiles. As a result of there are sensors and related digital management models (ECUs) throughout a car, when you’ve an accident, particularly in frontal collisions, these components additionally must be changed, and that provides to the associated fee,” he stated.
On the long-standing subject of motor insurance coverage liberalisation, he stated the framework for phased liberalisation continues to be persevering with to happen. “We are attempting to maneuver in the direction of a extra risk-based pricing. It will assist shoppers, notably protected drivers, by means of reductions in order that they’ll get pleasure from a greater premium. In the mean time, good drivers are to some extent subsidising the unhealthy drivers proper now,” he stated.
How – and when – all this will probably be finally fleshed out after all stays to be seen, because it has been almost a decade because the matter first took flight.
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