The general insurance industry has recorded an increase in gross direct premiums of 10% to RM19.4 billion for full year 2022 compared to prior year. However, underwriting profit had contracted by 23% to RM1.56 billion, mainly due to losses in both Motor as well as Medical and Health Insurance lines of business. Motor portfolio reverted to a loss after two years of profit during the pandemic, with a reported 58% increase in the number of accidents as of September 2022 compared to the corresponding period in 2021.
Reversing a trend of recent years, the industry’s gross direct premium growth rate outpaced Malaysia GDP’s growth rate; the latter following the full reopening of the economy in 2022, but the economic outlook is tempered by forecasted risks of global economic recession and other global headwinds.
Motor and Fire lines of business remained as the top premium contributors
Motor maintained its position as the largest line of business at 46% share of total premium. Although motor insurance observed a 9% growth in gross direct premiums to RM9.0 billion in 2022, it recorded an underwriting loss of RM3 million with net claims incurred ratio deteriorating to 65.3%, reverting towards pre-pandemic levels.
Meanwhile, premium for Fire in 2022 increased by 6% to RM3.82 billion as compared to 2021, with underwriting margin improving to 39.1% owing to improved claims experience.
Personal Accident (7% share of total premium) also saw significant growth in premium of +43% year-on-year largely due to the Perlindungan Tenang Voucher (PTV) Program initiated by the Ministry of Finance and Bank Negara Malaysia in collaboration with the general, life and takaful insurance industry.
The 2022 premiums for Miscellaneous and Marine Aviation and Transit (MAT) classes of insurance had also trended upwards by 10% and 8% to RM2.7 billion and RM1.5 billion respectively. Medical and Health Insurance (MHI) had increased in premium by 1% to RM976 million compared to 2021, however, MHI UW margin more than halved to 5% in 2022 from 12.1% in 2021 due to higher claims.
Perlindungan Tenang Voucher (PTV) Program was a successful public – private partnership to enhance the insurance penetration rate and financial resilience of the B40 segments through uptake of basic insurance protection plans.
A total of ten PIAM member companies participated in the program with a total redemption of 4.5 million vouchers amounting to RM301 million from the period of 30September 2021 to 30 November 2022.
More consumers are buying insurance online
Agents continued to be the dominant distribution channel over the past decade with more than 60% share of total Gross Written Premium (GWP) but this channel saw slower growth in the past five years. In contrast, more consumers are buying insurance online as the growth of internet distribution channel had grown rapidly at +53.3% p.a. effectively over the past decade. In other words, the use of online platform as a medium to purchase insurance plans has increased 64 times from a low base of RM3.6 million in 2013 to RM229 million GWP in 2022.
Daily claims payout at RM19 million per day in 2022
The general insurance industry settled close to RM19 million daily on total insurance claims. The amount of daily claims payout is reverting back to pre-pandemic trend in 2022 increasing by 23% YoY compared to 2021. Over the past decade, Motor daily claims payout represented the majority of total claims averaging at RM13 million per day (72% of total payout). Last year saw Motor daily claims payout increased to RM13 million per day following reductions in the previous three years.
