Malaysia's insurance industry grows 7.8% in 2023

On the other hand, underwriting profit contracted by 26%.

In 2023, the general insurance industry in Malaysia saw a positive growth trajectory with a 7.8% increase in gross written premiums, reaching RM21.4b, data from the General Insurance Association (PIAM) showed.

However, underwriting profit contracted by 26% to RM1.16b, mainly due to declines in profitability for motor and fire lines of business. 

Motor insurance experienced a notable deterioration, with a loss of RM156 million, attributed to inflationary cost pressures on vehicle spare parts and an increase in road accidents rates.

AM Best predicts that premium growth will be sustained in the near to medium term, driven by economic recovery, increased insurance penetration, and growing demand for digital insurance. 

Motor and fire lines remain the top premium contributors, with motor retaining the largest share at 45% despite experiencing an underwriting loss. 

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Fire insurance recorded an 8% increase in premiums but saw a decline in underwriting profit due to volatile weather events and rising reinsurance costs.

Since the phased de-tariffication, Malaysia's non-life segment has faced pricing competition, likely to pressure pricing in the short to medium term. 

However, in the long term, de-tariffication is expected to strengthen the industry's sustainability.

Other lines of business show varied performance: marine aviation and transit classes experienced a deceleration in premium growth, whilst miscellaneous classes displayed robust growth driven by construction all risk & engineering business. 

Personal Accident insurance witnessed a decline in premiums due to the end of the Perlindungan Tenang Voucher program, whilst medical and health Insurance demonstrated significant growth, reaching the highest year-on-year premium growth in a decade.

The industry settled an average of RM21m daily on total insurance claims in 2023, with motor claims representing the majority.