SHAH ALAM - Increased road accidents may lead to higher insurance expenses for Malaysian drivers, who file an average of RM15.1 million in claims daily, United Kingdom-based research house Global Data reveals.
According to the data, the Federal Police’s Traffic Investigation and Enforcement Department showed a 10 per cent increase in traffic accident cases last year compared to 2022.
Global Data analyst Sneha Verma said the increased accidents resulted in the highest motor insurance claims last year.
"Traffic accident cases increased by 10 per cent to 598,635 cases last year from 545,588 cases in 2022.
"As a result, the average motor insurance claims paid per day increased to RM15.1mil last year from RM13.4mil in 2022, the highest during the last five years, according to the General Insurance Association of Malaysia (PIAM)," she said in a statement.
She said this trend prompted insurers to reevaluate their risk exposure and raise premium rates this year.
Currently, Sneha said motor insurance dominates the Malaysian general insurance industry, comprising 46.9 per cent of direct written premiums (DWP) in 2024.
"Motor insurance is expected to grow by 8.9 per cent this year, supported by an increase in vehicle sales," she said.
Based on data from the Malaysian Automotive Association (MAA), she said total vehicle sales reached 202,245 units in the first quarter of the year – an increase of 5 per cent from 192,615 units during the same period last year.
Sneha said the property insurance follows closely, with a 26.4 per cent share of DWP in 2024, expected to grow by 11.4 per cent driven by higher demand for natural disaster coverage.
"Flood insurance saw a 33 per cent surge in demand in the first half of last year due to increased rainfall, reflecting a broader trend of rising premiums in response to inflation and higher claims.
"The property insurance sector is forecasted to achieve a compound annual growth rate (CAGR) of 9.8 per cent from 2024 to 2028.
"Personal accident and health (PA&H) insurance accounts for 10.1 per cent of DWP in 2024, projected to grow modestly by 0.3 per cent in response to increasing health awareness and medical costs," she added.
Sneha further revealed that PA&H insurance is expected to maintain a CAGR of 3.1 per cent from 2024 to 2028.
Despite a slower growth rate of 7.5 per cent in 2023 compared to 10.0 per cent in 2022 due to economic challenges, she said the general insurance industry is anticipated to rebound in 2024, driven by higher premium rates, increased claims, inflation, and growing demand for natural disaster coverage.
"Overall, the Malaysian general insurance industry is poised to grow at a CAGR of 7.8 per cent from RM22.6 billion in 2024 to RM30.5 billion in 2028," she said.