Kuala Lumpur, 21 January, 2014 – The general insurance industry recorded a growth of 6.6 percent in gross premiums to RM 12,423 billion for the third quarter of 2013 compared to RM11,658 billion in the corresponding period last year.
General Insurance Association of Malaysia’s (PIAM) Chairman, Chua Seck Guan, attributed the growth to continued expansion of the general insurance industry, increased premium contributions from the motor insurance sector, as well as improved risk management and business practices in the insurance industry.
The motor insurance sector saw a healthy increase of 9.4 per cent in gross premiums, while fire insurance saw an increase of 7.0 per cent. Similarly medical and health insurance both saw a slight improvement of 5.4 per cent.
The industry’s overall net claims incurred ratio remained and stood at 58.7 per cent in the period under review, compared to 58.8 per cent in the corresponding period last year. The capital adequacy ratio for the insurance industry stood at 220.7 per cent, exceeding the statutory minimum of 130 per cent with a capital buffer of RM22.9 billion.
Meanwhile, total assets of the general insurance industry for the first nine months of 2013 stood at RM 26.52 billion compared to RM24.19 billion over the same period in 2012.
Chua believed that the industry is poised for steady growth in 2014 buoyed by resilient domestic demands, organic growth and the introduction of more new and innovative products and wider distribution channels. A recent report from Fitch Rating Agency has reported the ‘demand for insurance products is likely to continue to grow in the near-term because of steadily rising disposal incomes and private consumption’.
The industry envisaged that motor insurance would once again be the fastest growing sector this year attributed to a rebound in vehicle sales, “We certainly look forward to better performance in the broader automotive sector as this will not only benefit the general insurance industry, but will also help boost the downstream activities of automotive-related businesses especially the Small Medium-sized Enterprises (SMEs),” said Chua.
In line with the Government’s efforts to ease the burden of Malaysian motorists and to enhance efficiency of submission of motor accident claims, the general insurance industry has collaborated with Takaful operators to launch a nationwide call centre, the Accident Assist Call Centre (AACC). The AACC’s goal is to provide assistance to motorists who have been involved in road accidents. The toll free hotline 1-300-22-11-88 is open to offer assistance to motorists 24/7.
Chua added that some other key areas of growth would be in medical and health insurance, as well as liability and disaster related insurance. The industry expects that rising disposal personal income will fuel stronger demand for medical and personal assurance products.
“Due to the rapid increase of weather-related natural disasters such as flood in the past year, the industry foresees greater emphasis to be placed by individuals and businesses on insurance as a means of a disaster risk management tool. The industry is also looking into efforts to educate the public on how to use insurance as an effective risk management tool. Adequate insurance protection could save them from financial ruin,” said Chua.
About General Insurance Association of Malaysia (PIAM)
PIAM is the national trade association of all licensed direct and reinsurance companies for general insurance in Malaysia. Currently, PIAM has 30 member companies. More information on PIAM can be obtained from its website: www.piam.org.my.