Malaysia’s insurance industry reports manageable premiums for now but warns of rising claims costs, climate risks, and global uncertainties that could drive future price increases. Motor insurance, in particular, faces significant losses due to higher repair costs and inflation, with average claims rising by 20%. Despite single-digit inflation in spare parts, insurers have recorded underwriting losses of nearly RM290 million in recent years.
Subang Jaya USJ11’s Restoran Yum Cha is the place for ‘tom yum’ fish head noodles and Thai style braised pork leg with noodles PIAM chief executive officer Chua Kim Soon said premiums have not surged significantly for now, with cost increases such as spare parts inflation still at single-digit levels.
— Picture by Sayuti Zainudin! Plus, enjoy an additional FREE RM10 when you sign up using code VERSAMM10 with a min. cash-in of RM100 today. T&Cs apply. KUALA LUMPUR, May 6 — Malaysia’s insurance industry says premiums remain broadly manageable for now, but warns that rising claims costs, climate risks and global uncertainties could put pressure on prices in the future.
General Insurance Association of Malaysia president Ng Kok Heng said the industry is already grappling with increasingly frequent and costly claims, particularly in motor insurance.
“The reality is clear — claims are becoming more frequent and more costly, especially in motor insurance, driven by higher repair costs and inflation,” he said at a briefing in Bangsar. Motor insurance, which makes up nearly half of the industry’s gross written premiums, recorded a combined ratio of 103 per cent in 2025 — indicating it is operating at a loss — while private car claims alone saw a loss ratio of 77 per cent.
Despite these pressures, PIAM chief executive officer Chua Kim Soon said premiums have not surged significantly for now, with cost increases such as spare parts inflation still at single-digit levels. However, industry data shows underlying strain, with insurers recording underwriting losses of nearly RM290 million in recent years and only two profitable years over the past six to seven years.
Claims severity has also risen sharply, with average motor claims increasing by 20 per cent from about RM7,000 to RM8,800, driven by higher repair costs, imported spare parts and larger court awards. Ng pointed to increasingly unpredictable weather patterns, including floods and storms, as a growing threat to insurers and policyholders alike.
“These risks will continue to evolve,” he said, adding that the industry must work closely with regulators and stakeholders to remain resilient. Chua said insurers are striving to balance affordability with sustainability, but cautioned that external pressures could disrupt this balance.
“Macro developments and emerging risks may pose challenges to sustainability,” he said, citing geopolitical tensions, rising fuel costs and global supply chain pressures.
Insurance Industry Premiums Motor Insurance Claims Costs Malaysia
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