PIAM – Motor Insurance leading revenue generator for insurance industry

The insurance industry recorded total growth of 6.4% in its total revenue for 2013, climbing from RM15.2 billion in 2012 to RM16.2 billion in 2013, according to a statement released by Persatuan Insurans Am Malaysia today.

Of the various types of insurance for sale, motor insurance leads the way in revenue generation for the industry, raking in RM7.5 billion worth of premiums in 2013, up 7.8% from RM7.0 billion managed in 2012 and accounting for 46.6% of total business in the industry last year.

The reported revenue growth of the motor insurance sector is unsurprising, considering that number of new vehicles sold in 2013 had increased as well. Total industry volume for 2013 as reported by MAA was 655,793 units, up from 627,753 units sold in 2012.

Unfortunately for the insurance companies, another figure that rose in tandem with the increase in revenue is an increase in claims incurred from RM4.2 billion in 2012 to RM4.8 billion in 2013. It essentially means that from the total money received in premiums, the industry had to give back 72.7% of that in the form of claims.

Moving forward, Chairman of the General Insurance Association of Malaysia (PIAM), Chua Seck Guan points out that with the insurance market set for liberalization after three decades of tight regulation, the industry will face severe challenges maintaining competitiveness and profitability.

KON