Further Liberalisation General Insurance - Malaysia

It was announced that all 23 member companies under the General Insurance Association of Malaysia (PIAM) and four general takaful member companies of the Malaysian Takaful Association (MTA) are committed to supporting an orderly and gradual transition to market-based pricing as well as provide higher service quality as part of phase two of the liberalisation of motor and fire tariffs.

The phased liberalisation of motor and fire tariffs was announced (BN) with phase one commencing from July 2016. Following this, the industry was allowed to offer new products and optional add-ons, with examples of the latter being flood coverage, lost car key replacement and others.

In phase two, which kicked off a year later from July 1, 2017, motor insurance premiums are no longer determined on a fixed rate basis, but on a risk based assessment system. 

As such, insurers and Takaful operators are now able to set pricing based on various risk factors such as residence location, vehicle make and model, use of vehicle, occupation of owner, claims history, gender and age. The upside is greater competition in the industry and
coverage that best meets their insurance needs.