Share Now

PIAM Urges Members To Develop New Products For Growing Economy

Kuala Lumpur, May 3, 2013 –
The general insurance industry registered a growth of 8.2% in gross premiums to reach RM15.180 billion in 2012, compared to an increase of 7.85% (RM14.029 billion) in 2011. Net premiums grew at a rate of 8.3% to reach RM 10.528 billion. The figures were reported during the 35th Annual General Meeting (AGM) of The General Insurance Association of Malaysia (PIAM) held recently.

In terms of business market share, Motor Insurance recorded the largest share at 46.6% (2011: 46.4%), followed by Fire Insurance at 16.4% (2011: 16.5%).

According to PIAM, the Motor and Fire classes of business achieved an increase in gross written premium of 9.3% to reach RM6.978 billion in 2012 (2011: RM6.382 billion, 6.93%), and 7.2% to reach RM2.571 billion (2011: RM 2.399 billion, 4.67%) respectively. The Contractors All Risk and Engineering (CAR and ENG) class of business also recorded an improvement of 16.4% to reach RM0.610 billion in gross premiums in 2012 compared to RM0.524 billion in 2011.

The overall Net Claims Incurred Ratio (NCIR) was on a downward trend in 2012 as it dropped to 57.1% from 60.7% in 2011. The overall Motor NCIR decreased slightly to 72.8% (2011: 76.8%), whilst Medical and Personal Accident both dropped to 55.6% and 28.9% respectively.

PIAM’s 2012 Annual Report further reported that the NCIR for “Motor Act” cover (i.e. cover for compulsory third party bodily injury and death liabilities), declined in 2012 to 262.1% from 287.58% in 2011. Generally, the NCIR for most classes of business showed a downward trend in 2012, except for CAR and ENG, which recorded an increase from 45.8% to 57.3% in 2012.

The general insurance industry recorded an underwriting margin of 12.6% in 2012 amounting to RM1.690 billion compared to 9.8% amounting to RM1.266 billion in 2011. However, the combined management expenses and commissions ratio of insurance companies had increased to 30.3% in 2012 from 29.5% the year before.

It was also reported at the AGM that the industry has an equitable regulatory structure in place which looks after the management of insurance companies explicitly and the focus for insurers would be to improve on other areas which affect their bottom line.

In looking at areas of improvement, the Association has identified a project to develop a Flood Model for the general insurance industry to address the increasing flood risk exposure in the country.  This model will help identify flood prone areas by location and provide a near accurate assessment of losses to determine proper underwriting by insurance companies.

In another effort at mitigating losses, the Association had in 2007 set up the Vehicle Theft Reduction Council (M) Bhd (VTREC) with the objective of identifying various initiatives to reduce vehicle theft in the country.  VTREC is supported by various Government agencies like the Royal Malaysian Police, Road Transport Department (JPJ) and other community stakeholders, and has undertaken many recoveries of Malaysian stolen vehicles from neighbouring countries. The recovered vehicles are returned to the insurers concerned who then deal with their insureds separately.  The costs of such recoveries are borne by the insurance companies.

The latest initiative is the development of an online Motor Anti-Fraud Register which will provide insurance companies the facility to “block” the issuance of motor insurance coverage at point-of-sale for vehicles that have been reported stolen or declared “total loss” in an effort to mitigate the fraudulent “re-birthing” of stolen vehicles.

At the AGM, PIAM Chairman, Mr. Chua Seck Guan also urged members to develop products for a growing economy, and strive for a higher penetration in the market.  There is still potential for further growth in the country as recent studies conclude that Malaysia is a country which is moderately insured.  This growth is unlikely to be achieved without the concerted effort by the insurance industry itself to better its position.  The insurance industry should look towards modelling risks for growing economies, investing in other distribution channels and developing new products to satisfy the appetites of the discerning consumers, he advised.

Chua also thanked Bank Negara Malaysia, the Ministry of Finance, the Police, Road Safety Department, JPJ, and other stakeholders for their continued support and guidance.

PIAM is the statutory association recognised by the Government of Malaysia for all registered insurers who transact general insurance business in this country. As at April 1, 2013, PIAM had 30 members comprising licensed general insurance and reinsurance companies operating in Malaysia. There were 18 general insurers, six composite insurers and six general reinsurers. Out of the 30 member companies, 15 are domestic operations, whilst 15 are foreign owned.

During the AGM, Mr. Chua Seck Guan, Chief Executive Officer of MSIG Insurance (Malaysia) Berhad was re-elected as PIAM Chairman, while Mr. Kong Shu Yin, Chief Executive Officer of RHB Insurance Berhad was elected Deputy Chairman.  The complete list of the PIAM Management Committee 2013/2014 is as follows:-

No. Name Designation Company Role
1 Mr. Chua Seck Guan Chief Executive Officer MSIG Insurance (Malaysia)Bhd Chairman
2 Mr. Kong Shu Yin Chief Executive Officer RHB Insurance Berhad Deputy Chairman
3 Mr. David Tan See Dip Chief Executive Officer Uni.Asia General Insurance Berhad Management Committee Member
4 En. Kamaludin Ahmad Chief Executive Officer Etiqa Insurance Berhad Management Committee Member
5 Mr. Karl Hamann Chief Executive Officer QBE Insurance (Malaysia) Berhad Management Committee Member
6 Dr. Michael Heng Kiah Ngan Chief Executive Officer Tokio Marine Insurans (Malaysia) Berhad Management Committee Member
7 Mr. Steven Crouch Chief Executive Officer ACE Jerneh Insurance Berhad Management Committee Member
8 Mr. Travis Atkinson Chief Executive Officer AmGeneral Insurance Berhad Management Committee Member
9 En. Zakri Mohd Khir Chief Executive Officer Allianz General Insurance Company (Malaysia) Berhad Management Committee Member