GI business dips 1.4%: PIAM

The Malaysian general insurance industry dipped by 1.4 percent year-on-year in the first six months of 2019 with gross direct premiums of MYR8.92 billion, according to the General Insurance Association of Malaysia (PIAM).

In a statement PIAM said motor insurance, the dominant class, was relatively flat with a marginal decline of 0.2 percent at MYR4.18 billion.

However, fire insurance grew 2.5 percent to MYR1.73 billion.

PIAM said the industry is confronted with twin challenges: low penetration rate and escalating claims.

The Association added that the general insurance penetration rate in Malaysia (total premiums as a percentage of GDP) is low, tracking at 1.23 percent for 2018 compared to the global average of three percent.

Meanwhile, it said rising claims particularly for medical and health (MHI) as well as motor posed major concerns to insurers.

It explained that medical inflation has been on an upward trend with double digit increase in recent years and is projected to reach 14 percent in 2019.

PIAM said motor claims insurers paid out RM14.9 million per day in property damage, bodily injury and vehicle theft.

It said that while road fatalities decreased 6.7 percent in 2018, the number of road accidents increased to 548,598 in 2018, from 533,875 in 2017.

On its prospects, PIAM said the business outlook will continue to be challenging given the uncertainties in the external environment with the ongoing trade tensions between US and China.