Malaysia General Insurance - Growth & Profit 2025

Malaysia’s general insurance sector ends 2025 with resilience and underlying fragility. The industry has reported steady premium expansion and stronger underwriting results, but it has also exhibited persistent weaknesses involving motor losses, rising repair costs and climate-linked risks.

Overall performance is nonetheless stable, but underlying currents suggest that deeper adjustments are needed to increase resilience as the industry heads into 2026.

Premium Growth

Industry data provided by the General Insurance Association of Malaysia (PIAM) shows that overall gross written premium (GWP) for the first half of 2025 rose four per cent to RM12.3 billion from RM11.8 billion in the same period last year.

Underwriting profit strengthened by RM153 million to reach RM629 million, reflecting stronger cost discipline and healthy performance in several major portfolios.

Fire, personal accident (PA) and marine, aviation and transit (MAT) emerge as the most stable segments in 2025.

Fire, the second-largest line of business, grew 10.4 per cent to RM2.6 billion, maintaining a combined ratio of 67.3 per cent, meaning for every RM1 of premium collected, 67.3 sen were spent on claims and operating costs. 

PA expanded 11.2 per cent to RM800 million. MAT also remained profitable, cushioning weaknesses in other parts of the industry.

These gains, however, were offset by continuing pressure from the motor segment.

Motor insurance 

Motor insurance has remained the largest portfolio with 42.8 per cent of total premiums, but continues to weaken overall underwriting performance.

The segment grew 5.7 per cent against eight per cent in 2024.

More significantly, it continues to operate at a loss. The combined ratio remains at 102.2 per cent, which indicates that claims and operating costs exceed premium income.

The segment is weighed down by entrenched pressures as road accident rates continue to rise to 115 cases per 100,000 population, a trend since 2022. This is driving higher claims volumes and complicating efforts to stabilise motor insurance pricing.

Repair costs continue to climb. Spare parts inflation has been rising at an annual compounded rate of 10 per cent since 2021, making vehicle components one of the fastest-growing categories of claims expenditure and pushing the segment further into loss-making territory.

Flood losses

Flood-related claims are less frequent than motor accidents, but their severity remains a major concern for insurers.

The industry continues to cite the 2021-2022 floods in Malaysia as a reference point for risk planning, given that the tragedy saw losses of between RM5.5 billion and RM6.5 billion and displaced more than 40,000 people. Despite this, flood insurance penetration remains low.

According to PIAM, flood extensions, which can be added to fire coverage, can cost as little as RM14 per month. And special perils cover, an optional add-on for motor insurance, typically accounts for only 0.5 per cent of the sum insured.

Affordability is not the main barrier, but the take-up rate remains limited. This leaves many households and businesses vulnerable to climate-driven disasters.

Digitalisation progress, adoption uneven

Notable progress was made in 2025 with regard to digital solutions, with adoption varying across insurers. The e-police reporting (ePR) pilot was launched on Sept 1 2025, on the North-South PLUS Highway.

This enables motorists to file police reports for minor accidents online. In all, 328 reports were lodged via the platform by Nov 30, 2025. 

Insurers also expanded the use of digital roadside assistance (DRA) applications, allowing policyholders to request towing services and track claims digitally.

These tools improve customer experience and operational efficiency, but full-scale adoption has been gradual; industry-wide impact will take time to materialise.

Vouchers for lower-income group

The Perlindungan Tenang Voucher programme, a government initiative providing subsidised vouchers to help the lower-income to buy basic insurance or takaful protection, remains a key channel offering protection.

Participation throughout 2025 has reinforced its role in widening access to basic insurance coverage.

Insurers also deepen their focus on electric vehicle (EV) risk research as EV adoption introduces new repair cost structures and risk exposures.

Insurers recognise that motor risk profiles will shift over time as EV numbers grow, making product development and data-driven analysis essential priorities.

2026 priorities

PIAM has outlined several priorities for 2026. This includes talent development via the General Insurance Internship for Talent (GIIFT) programme, stronger consumer education initiatives and tools such as a building cost calculator to address under-insurance in property coverage.

Two broader challenges are also shaping the 2026 outlook - the major financial and safety risk from the rising number of uninsured motorcycles, and the need to build stronger climate resilience.

Insurers have reiterated support for climate science and plan to enhance risk management and underwriting practices to better absorb climate-related shocks.

All things considered, 2025 has been a stable year for Malaysia’s general insurance sector, supported by growth in key segments and gradual advances in digitalisation.

Nonetheless, persistent losses in the motor segment and the growing impact of climate-linked events have highlighted unresolved structural issues.

The industry is beginning to pivot towards solutions that involve operational efficiency, digital adoption, financial inclusion and EV readiness.

Whether these efforts are adequate to address deeper vulnerabilities will become clearer in 2026, a year that is likely to test the industry’s ability to transition from managing pressures to building long-term resilience.

People Welfare Insurance Scheme Malaysia

The People’s Welfare Insurance Scheme (SIKR) 3.0, launched today, offers enhanced coverage to protect low-income. Finance Ministry had approved the scheme with an initial allocation of RM20 million, effective from Oct 1, 2025, to Sept 30, 2026.

For SIKR 3.0, the sum insured has been increased to RM13,500 for natural death, RM26,500 for accidental death, and RM13,500 for permanent disability resulting from accidents. The Coordination Unit of the Prime Minister’s Department will formalize the scheme through a memorandum of understanding with Prudential BSN Takaful Berhad.

SIKR is a complimentary syariah-compliant annual group term takaful plan sponsored by the government, providing protection for 300,000 heads of households from the hardcore poor and poor categories registered with the eKasih database.

The first SIKR was launched in 2022 with RM13.4 million in government-paid contributions, covering 268,887 household heads.

Under SIKR 2.0, coverage was RM10,500 for natural death, RM25,500 for accidental death and RM10,500 for permanent disability from accidents.

Malaysian Rising Debt Trap

Malaysian households owed a combined RM54.9 billion in credit card and buy now, pay later (BNPL) debt as of end-September 2025. 

As of Sept 30, more than 90% of the debt was credit card related. Lim said credit card debt stood at RM50.7 billion, with RM551.8 million (1.1%) overdue. Online spending continues to drive credit card use.

BNPL loans in Malaysia stood at RM4.2 billion across seven million accounts, with RM147.7 million, or 3.5% overdue from 185,465 users. The government is introducing policies to promote responsible lending and prevent borrowers from taking on excessive debt, protecting both household finances and national stability.

A key measure is the Consumer Credit Act 2025 (CCA), expected to take effect by year-end, which will regulate BNPL providers, especially for e-commerce credit. Under the CCA, BNPL and other non-bank credit providers must follow responsible lending rules: assess creditworthiness and affordability, ensure fair contracts and transparent fees, and adopt ethical debt collection practices.

While BNPL offers convenient payment options, consumers should evaluate their finances before borrowing and improve financial literacy to avoid debt traps.

Insurance Premium Gigged For E-hailing

Bank Negara has stepped in to address concerns over steep e-hailing insurance premium hikes raised by drivers. The central bank said it was exploring potential solutions together with the insurance industry and key stakeholders to make e-hailing insurance more accessible, affordable, and sustainable.

Bank Negara said this when asked for its response to an appeal by Persatuan Penghantar P-Hailing Malaysia (Penghantar), which urged the central bank to reassess insurance premium pricing practices for e-hailing drivers.

E-hailing insurance was introduced in Malaysia in 2017 as an add-on to a private car comprehensive policy to include the use of a personal car for e-hailing services. It provides additional coverage for passengers and personal accident coverage for drivers.

It is estimated that there are more than 100,000 e-hailing drivers in Malaysia.

Bank Negara said it was working closely with key stakeholders, including the Transport Ministry, Land Public Transport Agency (APAD), Road Transport Depart­ment (JPJ), and general insurance and takaful operators (GITOs) to address e-hailing issues and the broader ecosystem challenges.

Areas being studied include improving road safety, encouraging telematics adoption, enhancing data sharing, and reducing accident frequency.


The central bank said insurance premiums for e-hailing vehicles look at several market realities, such as significantly longer driving duration and mileage compared to private cars.
Rising repair and labour costs have also put pressure on the wider motor insurance segment.

rThe central bank said it has expanded engagements with various e-hailing associations to build greater understanding and awareness of e-hailing insurance, as well as to promote safer driving behaviours.

Meanwhile, the General Insurance Association of Malaysia (PIAM) and its member companies said that they fully support Bank Negara-led initiatives and collaborative efforts to ensure that e-hailing insurance remains accessible, sustainable, and competitively priced.

The association emphasized that it does not set or influence pricing decisions, noting that premiums are determined by individual risk-pricing models.

Allianz Outsourced Call Centres to AI

German insurance group Allianz plans to cut up to 1,800 jobs in its travel insurance division, mainly in call centres, as artificial intelligence increasingly replaces manual processes, a source familiar with the plans told Reuters on Wednesday.

Between 1,500 and 1,800 jobs are set to be eliminated at Allianz Partners over the next 12 to 18 months. Allianz Partners employs 22,600 people, roughly 14,000 of whom handle customer inquiries and claims by phone.

Malaysian Financial Bomoh Guideline

Their videos promise financial freedom in minutes, their advice often shared more widely than that of licensed experts and, in some cases, heavily influences how Malaysians manage their money.

These financial influencers or “finfluencers” — online personalities who turn complex financial topics into trending reels — have long dispensed money tips, investment opinions and “wealth hacks” across social media without the guardrails that govern licensed professionals, until now.

In response to the growing presence of financial influencers and the widespread use of technology, a new guideline governing governing advertisements for capital market products and related services took effect on November 1.

First issued by the Securities Commission Malaysia (SC) in 2020, the revised guideline is meant to level the playing field — ensuring that finfluencers who share investment advice are held to the same standards as those licensed under securities laws.

Malaysian Financial Planning Council (MFPC) International Development Committee chairman Anuar Shuib said many so-called financial “gurus” had been sharing potentially unreliable and unsubstantiated information with consumers before the guideline came into force.

Under the guideline, finfluencers are regarded as voluntary advertisers and are prohibited from promoting capital market products and related services, including financial planning, unless they are licensed by the SC.

Failure to obtain a licence or registration from the SC is a punishable offence under the law and one can be fined up to RM10 million or jailed for up to 10 years or both.

While consumers remain free to choose the content they wish to follow, Anuar stressed that it is essential to verify whether a finfluencer is authorised by the SC before acting on any personal finance advice.

The guideline clarifies that it does not cover the dissemination of factual information about a capital market product for educational purposes, as long as the information is not intended, and is unlikely, to influence anyone to act on or take a position in relation to that product.

Among others, the guideline also requires an advertisement to be presented in a manner that allows consumers to immediately identify it as an advertisement.

Malaysia Insurers Interfere With Treatment

The Ministry of Finance (MOF) today reiterated in Parliament that insurers, takaful operators (ITOs), and third-party administrators (TPAs) cannot determine patient care, amid ongoing complaints of insurer interference in clinical decisions.

ITOs and TPAs are only responsible for verifying whether a claimed treatment falls within policy coverage, based on medical necessity and standard treatment protocols. All decisions on patient care remain solely with doctors. Insurers and takaful operators, as well as TPAs, have no power to determine patient care. 

Premium Hike - Many insurers were found to have violated Bank Negara Malaysia’s (BNM) interim measures on medical and health insurance (MHIT) premium adjustments, the types of non-compliance involved, and the enforcement taken.

MOF’s response mirrored BNM where payers only assess whether treatment is covered and do not influence clinical decisions. However, several medical practioners consistently describe insurer and TPA approval controls as affecting how care is provided in private hospitals.

Specialists reported insurers denying inpatient admission by reclassifying cases as outpatient or daycare treatment. They also reported rejection of general anaesthesia for surgical procedures and refusal to cover standard therapies, including both innovator and generic medicines.

Doctors said these decisions limit the treatment options they can offer patients. Doctors did not claim that insurers directly issue clinical instructions. Instead, they described the control of guarantee letters, claim approvals, and payment authorizations as a form of financial gatekeeping that influences clinical judgement in practice.

The Ministry of Health (MOH) has previously cautioned insurers and TPAs against influencing clinical decision-making. Health director-general warned that interference with doctors’ clinical discretion “may be illegal” under Sections 82 and 83 of the Private Healthcare Facilities and Services Act, which protect clinical autonomy.

Medical associations have also called for regulatory intervention on insurer practices affecting care. Over 90% Of Policyholders Saw Premium Hikes Below 10% In First Year, Says MOF

The interim measures require ITOs to submit all proposed premium adjustments to BNM for approval, and that adjustments which do not meet the interim requirements cannot be implemented. The interim policy aimed for at least 80 per cent of policyholders to face annual premium adjustments of no more than 10 per cent due to medical inflation. Current industry data shows that more than 90 per cent of policyholders experienced premium adjustments of less than 10 per cent in the first year.

Meanwhile, BNM has received 190 complaints from policyholders regarding MHIT premium adjustments, of which 94 per cent (179 complaints) have been resolved by ITOs. Policyholders should first bring disputes to their insurer, and unresolved matters may be escalated to BNMLINK for case-by-case review. The government, BNM, insurers, TPAs, hospitals and medical professionals have reactivated the Grievance Mechanism Committee (GMC) to coordinate operational issues.