KUALA LUMPUR (Oct 8): Malaysia's general insurance industry saw its underwriting profit jump 32% year-on-year (y-o-y) in the first half of the year, driven by strong premium growth and better underwriting discipline.
The industry's overall underwriting profit for the January-June period this year soared to RM629 million from RM476 million in the first half of the previous year, which the General Insurance Association of Malaysia attributed to improved cost efficiency and underwriting management.
This came as the industry reported a 4% y-o-y increase in gross written premiums to RM12.3 billion in the first half of this year, according to PIAM in a statement.
Nevertheless, PIAM said the insurance industry is still navigating headwinds such as geopolitical uncertainties and US tariffs along with climate-related risks, technological shifts such as the rising demand of electric vehicles (EVs) and inflationary pressures, among others.
Motor insurance remained the largest general insurance segment with a 42.8% share, followed by fire insurance (21.1%) and personal accident insurance (6.4%).
Motor insurance contributed RM5.3 billion in premiums, up 5.7% year-on-year. However, the segment posted an underwriting loss, with a combined ratio of 102.2%, due to higher claims frequency and rising spare parts costs. This means that for every RM1 in premium that was earned, RM1.022 was spent on settling claims and covering operating expenses.
The combined ratio is an insurance profitability measure where anything over 100% means the company or segment is spending more money on claims and administrative expenses than it is collecting in premiums.
Fire insurance, which registered a 10.4% premium growth to RM2.6 billion, supported by demand for property and commercial coverage, recorded an underwriting margin of RM363 million, with a combined ratio of 67.3%.
Personal accident insurance saw an 11.2% rise in gross written premium to RM800 million, mainly driven by travel-related policies.
As for the contractor’s all risk and engineering segment — which provides coverage for construction, installation and operation of industrial and engineering projects — gross written premium declined 13.1% to RM600 million. Despite that, the segment remained profitable with an underwriting gain of RM58 million.
The marine, aviation and transit insurance's premium also declined, at 8.6% to RM1.15 billion, but it maintained a combined ratio of 63.2%.
PIAM said insurers will continue to emphasise sustainable underwriting and operational efficiency, while developing products related to EV coverage, climate risk and digital distribution.