The general insurance industry is set to witness challenges ahead after recording a 1.4 per cent drop in gross direct premiums to RM8.915 billion in the first half of 2019 (1H19).
General Insurance Association of Malaysia (PIAM) chairman Antony Lee said further liberalisation is needed to boost the industry.
“For second half 2019 (2H19), we don’t see any significant change from what you see in 1H19. I think if we don’t liberalise further, next year could be even worse,“ he told reporters after the half-year 2019 general insurance industry results presentation here today.
As such, PIAM and Bank Negara Malaysia (BNM) are working closely on the next phase of further opening up the industry, he said.
“There are some concepts that would radically change the way we price today. I can’t talk about it in detail,“ he added. When we have it and they are comfortable, then hopefully we can go towards further liberalisation. It’s always a concern that premiums for the lower income go up too high. So, we are working to show them that isn’t the case across the board. Some bad drivers will pay more whether they are in the B40 or M40 group,“ he added.
Citing an example, Lee said Singapore is utilising summons data to determine the premiums and discounts to be given to those with no summonses for a few years.
“We are working closely with the Transport Ministry and BNM to get the data and do some sample testing to make sure we can use it to price in additional discounts, and it’s ongoing. Of course, it’s sensitive because we need to sort out Personal Data Protection Act (PDPA) and legal issues with all that data and sharing. So, it is taking a bit longer than we would like but we are working actively to get that done,“ he added.
Lee expressed hope the sample testing analysis will be completed in two months.
Meanwhile, chief executive officer Mark Lim said liberalisation will benefit consumers with lower insurance premiums and result in fewer motor disputes and more choices as well as innovative products.
Lim said the average motor premium per policy stood at RM584 in 2018 compared to RM602 in 2014.
He said the industry is confronted with twin challenges, low penetration at 1.23 per cent (total premiums as a percentage of gross domestic product) in 2018 and escalating claims, mainly for medical and health insurance (MHI).
Motor claims insurers paid out RM14.9 million per day for property damage, bodily injury and vehicle theft claims.
The number of road accidents continued to go up despite the 6.7 per cent decrease in road fatalities to 6,284 in 2018. Transport Ministry statistics show a total of 548,598 accidents were recorded in 2018 compared to 533,875 accidents in 2017. Meanwhile, vehicle thefts continued to decline for the sixth consecutive year with total stolen vehicles down by 26 per cent to 5,173 for all classes in 1H19.
Overall, gross direct premiums for the motor segment, which accounts for 46.9 per cent of the total general insurance industry, fell 0.2 per cent to RM4.182 billion in 1H19, while MHI declined 14.8 per cent to RM569 million.
Personal accident was 1.6 per cent lower at RM602 million and the miscellaneous segment went down 9.8 per cent to RM1.035 billion in 1H19.
To a question on bike e-hailing, he said more e-hailing services may not be good for the road accident records.
“We have to see in countries that are very intense with e-hailing usage, either road accidents have gone up, and I think there will be some correlation there, meaning there are more accidents involved with this way of usage,“ Lim added.
No comments:
Post a Comment