The gross written premium (GWP) for motor vehicle insurance in Malaysia has risen by 5% to RM10.9 billion in 2025 compared to RM10.4 billion in 2024, with private cars being the main contributor with an 82.4% share.
This was announced by the General Insurance Association of Malaysia (PIAM) during its annual media briefing yesterday, where it also highlighted that the nation’s general insurance industry recorded a 4.8% increase in its overall GWP of RM24.2 billion, while its underwritten profit reached RM1.2 billion last year.
Motor Insurance Remains the Largest Contributor
According to its official statement, motor insurance remains the general insurance industry’s largest contributor with a 45.2% share. However, this segment continues to post underwriting losses in 2025, with an RM289.3 million loss recorded last year with a combined ratio remaining at 103%.
And this is despite the steady growth of 5% year-on-year in 2025, with PIAM pointing out persistent cost pressures in the private car segment continuing to strain the shared pool that funds every policyholder’s claims.
PIAM also pointed out that both the rising claim frequency and severity are the main driving factors to this increasing strain, with private car claim frequency maintained above 7% in 2025, while claim severity rose to RM8,831 last year due to spare parts inflation.
Interestingly, the association specifically highlighted both the Proton X50 and X70 for the increase in claim frequency, citing owners of these models are mostly younger drivers. The same goes for the claim severity increase, with both the Proton Saga and X50 being highlighted for driving the spare parts inflation, given that most parts for these two models are imported, PIAM added.
Electrified Vehicles Uptake Post New Challenges
The rise in electrified vehicle (xEV) adoption is reflected in their insurance uptake, and the industry has pointed out several challenges and their readiness to tackle them, with an extra emphasis on battery electric vehicles (EVs).
Among the challenges faced by the industry in handling EV-related claims include cost and repair complexity, where repair and claim costs for EVs tend to be higher than conventional ICE-powered cars given their complexity and parts cost.
This first challenge is then compounded with other secondary challenges such as lack of technical expertise, inadequate reliable claims data for analytics, and limited availability of certified EV repairers, thus highlighting the need for broader claims readiness as EV uptake increases, PIAM added.
Among the steps the industry recommended is to establish standards and protocols for EV repairs and claims handling, with an aim to improve cost control, safety, and consistency in EV claim outcomes. However, the association did say that the slow response from related agencies in setting up these standards could delay this recommendation.
Next is the improvement of market readiness for EV penetration by verifying and expanding certified EV repair networks, as well as investing in EV-specific training for claims and technical staff in order to improve turnaround time as EV uptake grows.
Last but not least, the industry also recommends more strategic collaborations across the EV ecosystem, where OEMs, workshops, and regulators can work together to align on standards while, at the same time, growing the EV-specific claims data to support future decisions.
