Malaysia’s general insurance industry posted solid premium growth in 2025, but motor insurance continued to weigh on profitability. Total premiums rose 6.1% year on year, driven by motor, fire and personal accident lines, according to the General Insurance Association of Malaysia. The headline increase shows a market that is still expanding, even as core segments remain under pressure.
Motor insurance was once again the dominant business line, generating about $2.6 billion in premiums and accounting for 45.2% of the portfolio. But the segment also posted an underwriting loss of $69.4 million, with a combined ratio of 103%, meaning claims and expenses exceeded premiums collected. Although that was a slight improvement from 2024, the line remained firmly in the red.
The problem is not lack of demand. Malaysia’s motor market continues to be large because car ownership remains widespread and vehicle usage is essential for both households and businesses. The issue is cost inflation, especially repair bills, parts prices and claims severity. PIAM has said these forces are keeping premiums under pressure and making the line harder to underwrite profitably.
The latest figures suggest the industry is managing to grow premiums without fully solving the loss problem. The 0.7 percentage point improvement in the combined ratio points to tighter underwriting discipline, but it is not enough to lift motor insurance into profit territory. For insurers, that means price setting, fraud detection, and risk selection remain critical.
Other lines helped balance the picture. Fire and personal accident insurance also contributed to the increase in total premiums, giving the industry a broader growth base. That diversification matters because it reduces reliance on a single problematic segment and gives insurers a better path to stable earnings.
Industry officials have warned that motor losses could linger this year if costs remain elevated. That caution is important because it suggests the market may see only gradual improvement, not a quick turnaround. Insurers will likely continue pushing for pricing discipline while also looking for operational changes that can reduce claim severity. For now, Malaysia’s insurance industry can claim a decent top-line result, but not a clean profitability story. Premiums are growing, but the market still needs structural fixes in its largest business line. Until then, motor insurance will remain the sector’s biggest source of both revenue and frustration.
