General insurance industry falls to RM8.6b in 1H20


THE general insurance industry registered its steepest drop with gross direct premiums declining 3.6% to RM8.6 billion for the first six months of 2020 (1H20) compared to the same period last year, as it bore the full brunt of the Covid-19 pandemic.

General Insurance Association of Malaysia (PIAM) said during the same period, motor insurance, the dominant insurance class, was down significantly by 7.4% at RM3.87 billion, due to more than 40% decrease in total vehicle sales for the 1H20.

Additionally, personal accident insurance recorded the largest fall of 13.4% to RM522 million while marine aviation and transit insurance dipped 0.7% to RM0.8 billion impacted by shrinkage of 9% and 8.7% in cargo and offshore oil-related classes respectively.

Fire insurance grew 2.2% to RM1.76 billion while medical and health insurance notched up 3% to RM586 million.

PIAM added that some of the insurers were supportive to cancel travel insurance policies with a full refund of premiums.

“General insurers are reviewing the financial impact faced by consumers making the necessary adjustments on a case by case basis and exploring options to ensure insurance protection continues to be available to them under these trying circumstances,” it said.

Despite the significant reduction in traffic movements nationwide during the Movement Control Order period, total motor claims paid out by insurers remained high at RM2.4 billion for 1H20.

PIAM chairman Antony Lee (picture) said a complete mindset change is required to transform the driving habits of Malaysian motorists, as high-risk drivers with their dangerous driving behaviour affect public safety in the same way as drink-drive motorists.

“PIAM will intensify its collaborative efforts with the Ministry of Transport, Road Transport Department, the police and all stakeholders to reduce road accidents in the country,” he added.

However, PIAM CEO Mark Lim noted that there were fewer vehicles stolen for the seventh straight year, which is a record in itself.

“The total number of stolen vehicles went down by 39% from 5,512 to 3,340 vehicles for all classes during the 1H20 compared to the same period last year,” he said.

On the industry’s outlook, the association expects the industry to decline further for the full year with the road to recovery a long and arduous one ahead.

During the Covid-19 crisis, PIAM said member companies have ramped up measures to assist policyholders and lessen the consumers’ financial burdens.

The association has also contributed RM2 million to the insurance and takaful industry’s RM8 million Covid-19 Test Fund.

“This was part of the industry’s effort to help affected rakyat to cope with the immediate health effects of the virus and enabled more Malaysians to undergo the test to help contain community outbreak,” it said.