PIAM: RM14.7 mil motor claims paid daily

By Andy Heong

Chua Seck Guan

RM14.7 million was paid out daily by insurers for motor claims for the first half of 2015 (1H15), according the General Insurance Association of Malaysia (PIAM),

Total claims paid out for 1H15 had increased to RM2.69 billion, an increase of 3% over the same period last year. Of this, an estimated RM1 billion was paid for third party injury claims and RM1.69 billion was for damages (both third party property and own damage) and theft claims.

“Topline premium growth for the dominant motor sector slowed considerably, while the industry continued to bear the heavy burden of increased claim costs.

“Although there are encouraging signs of a slower rate of increase in motor claims costs the industry has to remain vigilant and focus on its various initiative and projects to better manage and contain claims cost,” said PIAM chairman Chua Seck Guan at a press conference today.

The motor insurance sector achieved a gross written premium of RM4.09 billion for 1H15. The sector grew at a significantly slower rate of 2.1% as compared to 8.3% for the same period last year, said PIAM chief executive officer Mark Lim.

While 1H15 total claims paid out had increased by 3%, the net claims ratio for motor insurance had reduced to 74.3% from 76.3% in 1H14. Despite being in the red, the losses suffered by the motor insurance sector was reduced to RM221 million as compared to RM249 million over the same period last year.

The reduction in the losses suffered can be partly attributed to the lower number of reported vehicle thefts in the nation. Working together with the Vehicle Theft Reduction Council (VTREC), the number of motor vehicle theft cases in Malaysia had reduced significantly. In 2014, the number of reported motor vehicle theft cases reduced by 19% over 2013.

“Over the first six months of 2015 total number of vehicle theft cases stands at 10,559 which is 34% of the total number of theft cases for 2014 (31,195 cases),” said Lim.

Motor insurance comprises of 45% of the general insurance industry in Malaysia and it is the industry’s largest sector.

VTREC was formed in 2005 to coordinate national efforts to reduce vehicle theft and is chaired by the Royal Malaysian Police. VTREC is endorsed by Bank Negara Malaysia, Transport Ministry, Road Transport Department, Computerised Vehicle Inspection Centre, Malaysia Automotive Association, Malaysian Takaful Association, Malaysian Institute of Accountants, and PIAM.