Whereas motor insurance coverage stays the overall insurance coverage business’s largest line of enterprise in Malaysia, contributing RM10.9 billion – or 45.2% of complete premiums – in 2025, the section continued to put up underwriting losses, with RM289.3 million recorded final yr.
At a mixed ratio of 103%, this displays that claims payout exceeded premiums collected, stated the Basic Insurance coverage Affiliation of Malaysia (PIAM). The rising variety of claims and the severity of those have been issues 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 autos. On the similar 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 rationale for this rise was as a result of a rise within the worth of spare elements, in response to PIAM CEO Chua Kim Quickly. “Within the case of the X50 and X70, most of those elements are imported from China, in order that’s the place the associated fee impression is. If you import these spare elements, then you will have that worth inflation impression on the restore value. That’s mainly the principle purpose why the typical claims value for these autos has spiked up,” he stated.
As for the share of the spare elements 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 elements inflation enhance on a year-to-year foundation is on a single-digit degree. That for some fashions is clearly greater than others – in the event you speak about some luxurious autos, then positively the spare elements for these will likely be barely greater,” he defined.
Whereas the premium for electrical autos (EVs) haven’t gone up, Chua stated that PIAM is wanting into the insurance coverage protection construction for these, given the rising restore prices related to the expertise in them, together with superior driving help system (ADAS). He stated that whereas the expertise might assist scale back accidents and save lives, it might additionally spike up the severity of restore prices when accidents do happen.
“If you happen to have 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 items (ECUs) throughout a car, when you will have an accident, particularly in frontal collisions, these elements 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. This may assist customers, significantly protected drivers, by means of reductions in order that they will take pleasure in a greater premium. In the meanwhile, good drivers are to some extent subsidising the dangerous drivers proper now,” he stated.
How – and when – all this will likely be ultimately fleshed out after all stays to be seen, because it has been almost a decade for the reason that matter first took flight.
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