The general insurance market in Malaysia is forecast to reach $6.8 billion by 2028, as projected by data and analytics firm GlobalData.
The market is anticipated to grow at a compound annual growth rate (CAGR) of 7.8%, increasing from MYR22.6 billion ($5.0 billion) in 2024 to MYR30.5 billion ($6.8 billion) by 2028 in terms of direct written premiums (DWP).
Data from GlobalData’s Insurance Database showed that the sector is expected to grow by 8.3% in 2024, with motor and property insurance projected to account for 73% of the general insurance DWP that year.
Sneha Verma, an insurance analyst at GlobalData, said the industry experienced slower growth in 2023 compared to 2022.
“Malaysian general insurance industry witnessed slower growth of 7.5% in 2023 as compared to 10.0% growth in 2022, due to slower economic growth and tight monetary policy,” she said.
She anticipates a recovery in growth for 2024, driven by increased premium rates across general insurance lines due to rising claims and high inflation, and heightened demand for natural catastrophe (nat-cat) insurance as extreme weather events become more frequent.
Motor insurance is projected to be the dominant line of business within Malaysia’s general insurance market, expected to represent 46.9% of the DWP in 2024. It is predicted to grow by 8.9% in 2024, supported by increased vehicle sales.
Verma further noted that rising road accidents will lead insurers to reassess risk exposure and increase premium rates in 2024.
“Rising claims due to the increasing number of road accidents will prompt insurers to reassess their risk exposure and increase premium rates in 2024, which will support motor insurance growth,” she said.
Data from the Traffic Investigation and Enforcement Department in Malaysia indicated a 10% increase in traffic accident cases in 2023, totalling 598,635 cases, with fatalities rising by 104% to 12,417 in 2023. Consequently, the average daily motor insurance claims paid increased to RM15.1 million in 2023 from RM13.4 million in 2022, the highest in five years. Motor insurance is expected to grow at a CAGR of 7.5% from 2024 to 2028.
Property insurance, the second largest line, is projected to account for 26.4% of general insurance DWP in 2024, with an expected growth of 11.4% in 2024 due to increased demand for nat-cat insurance policies.
The General Insurance Association of Malaysia (PIAM) reported a 33% increase in demand for fire insurance with flood coverage in the first half of 2023. Rising premium prices, driven by higher claims and inflation, are also expected to support property insurance growth.
The Department of Statistics Malaysia (DOSM) recorded a 21% increase in total flood losses in 2023, amounting to RM755.4 million. Property insurance is anticipated to grow at a CAGR of 9.8% from 2024 to 2028.
Personal accident and health (PA&H) insurance, the third largest line, is expected to account for 10.1% of general insurance DWP in 2024, with a projected growth of 0.3% driven by increasing health awareness and medical inflation. It is expected to grow at a CAGR of 3.1% from 2024 to 2028.
Overall, economic recovery, rising consumer awareness of insurance, and the rebound of vehicle sales are expected to support the growth of Malaysia’s general insurance industry over the next five years.
“Persistent high claim payouts led by medical inflation, and the occurrence of regular nat-cat events will prompt insurers to reassess their risk exposure and increase premium rates in the short term,” Verma said.
GlobalData also recently released its forecast for the Taiwanese property insurance market.
