Malaysia General Insurance 2025

Malaysia’s general insurance industry recorded higher underwriting profits in 2025, with gains in fire, marine, and personal accident classes helping to counter continued losses in motor, according to data from the General Insurance Association of Malaysia (PIAM).

Industry results and business composition
PIAM reported that the general insurance market generated gross written premium (GWP) of RM24.2 billion in 2025, up 4.8% from RM23.1 billion a year earlier. Underwriting profit increased to RM1.2 billion, RM125 million higher than in 2024, with the industry’s overall combined ratio reported at about 93%. Motor insurance remained the largest class of business, contributing 45.2% of total premiums. Fire insurance accounted for 20.9%, while personal accident (PA) represented 6.5%. Taken together, motor, fire, and PA delivered overall premium growth of 6.1% for the general insurance sector in 2025.

Motor premiums grow, but line remains in loss
Motor GWP rose to RM10.9 billion in 2025, representing year-on-year growth of 5.0%, compared with 6.7% in 2024. Despite the increase in premiums, the motor segment remained in an underwriting loss position, with a deficit of RM289.3 million and a combined ratio of 103%. The modest improvement of 0.7 percentage point in the combined ratio relative to 2024 was linked to stricter underwriting practices. However, higher costs in the private car segment continued to push claims above premiums. Claims experience reflected both sustained frequency and higher average claim amounts. Private car claim frequency remained above 7% during 2025, with higher incidence observed in high-volume models such as the Proton X50 and X70, where a larger share of drivers are younger. Average claim severity for private cars increased to RM8,831, reflecting spare parts inflation across models including the Proton Saga and Proton X50.

Fire, MAT, and PA provide underwriting support
Fire insurance, the second-largest class in the portfolio, posted GWP of RM5.0 billion in 2025, compared with RM4.7 billion in 2024, an increase of 6.9%. The line reported underwriting profit of RM700.8 million and a combined ratio of 69.5%. Premium growth in fire was attributed to higher sums insured on residential sub-sales and rising rebuild costs, with more exposure associated with older landed properties in suburban areas.

Marine, aviation, and transit (MAT) business saw a small decline in top-line premium but remained profitable overall. MAT GWP decreased 2.2% to RM1.79 billion from RM1.83 billion in 2024, amid softer conditions in offshore oil-related and cargo segments. These two segments accounted for 37.6% and 33.9% of the MAT portfolio, respectively. The MAT class generated underwriting profit of RM108.1 million with a combined ratio of 73.1%, lower than the RM161.8 million in underwriting profit reported for 2024. Cargo and marine hull lines together accounted for nearly 90% of MAT business.

Personal accident insurance continued to expand in volume. GWP in PA rose 12.2% to RM1.6 billion in 2025 from RM1.4 billion in 2024. Higher demand for travel insurance, in line with ongoing recovery in outbound travel since 2023, together with wider adoption of digital distribution and a firmer economic backdrop, supported premium growth. Policy uptake was particularly strong for destinations where the ringgit provides relatively higher purchasing power.

Electric Vehicles Fire Risk

There has been speculation online that electric vehicles (EVs) pose a major fire risk and that insurance companies may refuse to cover damages if an EV catches fire at home or inside a building car park. However, the General Insurance Association of Malaysia (PIAM) says standard fire insurance policies generally still apply regardless of whether the fire was caused by an EV, a petrol-powered vehicle or other electrical sources. PIAM said that the fire insurance coverage is based on the fire incident itself, and not specifically the type of vehicle involved.

Higher Fire Risk - According to available data and statistics do not indicate that EVs have a higher fire risk compared to petrol or diesel vehicles. In fact, PIAM said ICE vehicles currently present a higher fire exposure risk than EVs.

Malaysia’s Fire and Rescue Department (BOMBA) has also stated that the risk of fire in EV is far lower than combustion vehicles. Data from the United States and Europe, which showed that EVs catch fire less frequently than gasoline-powered cars.

There were 1,530 fires per 100,000 gasoline vehicles (1.53%) and 3,475 fires per 100,000 hybrid vehicles (3.48%). Meanwhile, there were 25 fires per 100,000 EVs (0.025%).

2025 Industry Performance - PIAM’s latest industry report, fire insurance remained one of the strongest-performing business segments for Malaysia’s general insurance industry in 2025.

PIAM said fire insurance recorded RM5.0 billion in Gross Written Premium (GWP) last year, representing 20.9% of the overall portfolio and making it the industry’s second-largest business line after motor insurance.

The segment also posted an underwriting profit of RM700.8 million with a Combined Ratio of 69.5%.

Fire insurance growth was driven largely by higher rebuild costs and inflation in residential property values, especially for older landed homes in suburban areas.