MALAYSIA’S general insurance industry recorded RM 24.2 billion in Gross Written Premium (GWP) in 2025, representing a 4.8% increase from RM 23.1 billion in 2024. According to the General Insurance Association of Malaysia (PIAM), the industry also posted an underwriting profit of RM 1.2 billion, an improvement of RM 125 million year-on-year, while the overall combined ratio remained at around 93%.
Despite the stronger overall performance, motor insurance remains a challenging segment for the industry. PIAM said motor insurance, which continues to be the largest general insurance line at 45.2% of total premiums, still recorded an underwriting loss of RM 289.3 million in 2025. Its combined ratio stood at 103%, which means claims payout exceeded premiums collected.
Motor insurance GWP reached RM 10.9 billion in 2025, growing by 5.0% year-on-year. However, this was slower than the 6.7% growth recorded in 2024. PIAM said private car claim frequency remained above 7% in 2025, while claim severity increased to RM 8,831 due to spare parts inflation.
According to PIAM, models such as the Proton X50 and X70 naturally showed higher claim frequency due to their popularity, particularly among younger drivers. The association also noted that spare parts inflation contributed to higher claim severity, notably for the Proton Saga and Proton X50.
During the Q&A session, PIAM CEO Chua Kim Soon explained that the Proton X50 and X70 are affected by parts cost partly because of Proton’s partnership with Geely, with many of these parts imported from China.
He said vehicles with more locally manufactured parts tend to have better-controlled repair costs, while imported spare parts are more exposed to cost inflation. However, he added that overall spare parts inflation remains in the single-digit range, although the increase varies from model to model.
ADAS can reduce accidents, but it may not reduce insurance claims cost
The growing use of advanced driver assistance systems (ADAS) was also raised during the session. While ADAS can help reduce accident risk or severity, PIAM cautioned that it does not automatically mean lower insurance premiums.
Chua said there are two factors insurers look at, which are claim frequency and claim severity. ADAS may help reduce the severity of certain accidents, but the repair cost of vehicles equipped with sensors, ECUs and calibration requirements can also be significantly higher.
He said these systems require specialised equipment and recalibration after repairs, and components such as sensors and electronic control units are not cheap. In short, ADAS may help save lives, but it may not necessarily reduce claims cost.
EV premiums have not really gone up, says PIAM
Electric vehicles were also discussed during the event, particularly in relation to repair competency, insurance premiums and resale values. When asked whether EV insurance premiums had increased in recent years, Chua said EV premiums have “not really” gone up.
However, he said EV repair standards remain an area that needs closer attention. While authorised service centres would likely have undergone training required by their respective manufacturers, PIAM noted that there is currently no minimum industry-wide standard to benchmark whether a workshop or technician is qualified to repair EVs.
Chua explained that different manufacturers operate differently. Some brands use a closed repair network where EV repairs are handled only within their authorised ecosystem, while others may adopt a more open model involving independent workshops.
EV resale value could create a financing gap
Another issue raised was EV depreciation. Chua acknowledged that PIAM’s own studies show EV resale values are dropping quickly. According to him, the price difference between an internal combustion engine vehicle and an EV may start at around 6% in the first few years, but the gap can widen to as much as 40% over time.
This creates a potential issue for owners who finance their EVs. If the vehicle is declared a total loss, the insured market value may not be enough to cover the outstanding loan amount. Chua said insurers are still evaluating how EV insurance can be structured, and discussions are ongoing with various stakeholders.
Looking ahead, PIAM said it will continue working on making insurance more accessible and improving the claims process for consumers. The association highlighted several ongoing initiatives, including digital roadside assistance, e-reporting with PDRM and Bank Negara Malaysia, and a gradual move towards more risk-based pricing under the phased liberalisation process.
Chua said risk-based pricing could eventually allow safer drivers to enjoy better premiums, although this needs to be balanced against higher-risk drivers. He added that the industry is still working with Bank Negara and other agencies to improve the structure, particularly in relation to road safety and driver behaviour.
The Sun Malaysia
