What Drove Malaysia’s General Insurance Market to Rise by 4%?

Malaysia’s general insurance industry delivered a resilient performance in the first half of 2025, posting steady growth despite mounting global and domestic challenges. According to data released by the General Insurance Association of Malaysia (PIAM), the sector recorded gross written premiums (GWP) of US$3.1 billion (RM12.3 billion) between January and June 2025. This represented a 4.0 per cent year-on-year increase, marking a positive turnaround underpinned by stronger operational discipline, improved efficiency, and more prudent underwriting practices.

A key highlight of the period was the notable improvement in underwriting profitability. Industry-wide underwriting profit climbed by US$38.3 million (RM153 million) to reach US$157.3 million (RM629 million), reflecting better cost management and more refined risk selection across several business lines. This improvement came at a time when insurers globally continue to grapple with inflationary pressures and heightened claims costs.

Despite this progress, the motor insurance segment—traditionally the backbone of Malaysia’s general insurance market—remained a significant drag on overall profitability. Accounting for 42.8 per cent of total premiums, or approximately US$1.3 billion (RM5.3 billion), motor insurance continued to record underwriting losses. Its combined ratio of 102.2 per cent highlighted persistent challenges stemming from higher claims frequency, rising repair costs, and increased severity of bodily injury claims. Furthermore, growth in the motor segment moderated to 5.7 per cent in the first half of 2025, down from 8.0 per cent in the same period a year earlier.

In contrast, non-motor insurance lines played a critical role in stabilising the industry’s performance. Fire insurance, the second-largest segment, generated premiums of US$0.7 billion (RM2.6 billion) and accounted for 21.1 per cent of the total portfolio. With a robust combined ratio of 67.3 per cent, the segment maintained healthy profitability and sustained growth of around 10.4 per cent since the final quarter of 2024.

Similarly, personal accident (PA) insurance demonstrated strong momentum. Premiums in this category reached US$0.2 billion (RM0.8 billion), representing 6.4 per cent of total premiums, alongside an impressive 11.2 per cent growth rate. Other specialised segments, including marine, aviation and transit (MAT) as well as CARE, also remained profitable, contributing positively to the overall industry balance.

Collectively, the performance of motor, fire, and personal accident insurance supported a 5.6 per cent increase in total industry GWP during the first half of the year.

Key Industry Metrics (H1 2025)

Looking ahead, the industry continues to face significant headwinds. These include geopolitical uncertainty, higher United States tariffs of up to 19 per cent on a broad range of goods, escalating climate-related risks, growing cybersecurity and technology exposures, and evolving consumer expectations. Cost pressures from inflation, rising spare-part prices, and increasing bodily injury claims further complicate the operating environment.

In response, insurers are intensifying efforts in financial inclusion, talent development, digital transformation, and road safety initiatives. Notable measures include expanded consumer education programmes, participation in the government-backed Perlindungan Tenang Voucher scheme aimed at lower-income groups, and the General Insurance Internship for Talent (GIIFT) programme to cultivate future industry professionals.

Overall, while challenges persist, the strengthened performance of non-motor segments and continued strategic investments position Malaysia’s general insurance market on a stable and cautiously optimistic growth trajectory.