Malaysia fire premiums climb 6.9% on rebuild costs

The segment generated RM700.8m in underwriting profit during 2025.

Rising rebuild costs and inflation on residential property sub-sales drove Malaysia’s fire insurance segment to a 6.9% growth in 2025, with Gross Written Premiums (GWP) rising to $1.3b (RM5.0b) from $1.2b (RM4.7b).

The market segment achieved a strong combined ratio of 69.5%, yielding a total underwriting profit of $175.2m (RM700.8m).

The growth highlights a shift in risk exposure toward older, landed suburban homes. Despite a slight increase in how often claims were filed, overall claim frequency remained low across the country.

East Malaysia recorded a healthy fire loss ratio of 37%, compared to a lower 28% loss ratio in Peninsular Malaysia.

However, the financial impact of individual claims worsened. The average claim severity for fire material damage rose sharply to $27,250 (RM109,000) in 2025, up from $22,250 (RM89,000) in 2024.

Industry data attributes this deterioration directly to higher reconstruction costs and a growing trend of policyholders seeking full reinstatement values for their properties.

Meanwhile, consumer take-up for flood coverage within fire policies remained low, with only 21% of policyholders opting for the protection.

($1.00 = RM4.07)