While motor insurance remains the general insurance industry’s largest line of business in Malaysia, contributing RM10.9 billion – or 45.2% of total premiums – in 2025, the segment continued to post underwriting losses, with RM289.3 million recorded last year.
At a combined ratio of 103%, this reflects that claims payout exceeded premiums collected, said the General Insurance Association of Malaysia (PIAM). The rising number of claims and the severity of these were concerns noted by the association at a media briefing on the industry’s performance earlier this week.
It said that the claim frequency for private cars remained above 7% in 2025, adding that models such as the Proton X50 and X70 showed a higher frequency of claims, concentrated among younger drivers of these vehicles. At the same time, claim severity had also risen considerably, with the average cost per claim increasing by about 20% to RM8,831 in 2025, notably for models such as the Proton Saga and X50.
The reason for this rise was due to an increase in the price of spare parts, according to PIAM CEO Chua Kim Soon. “In the case of the X50 and X70, most of these parts are imported from China, so that’s where the cost impact is. When you import those spare parts, then you have that price inflation impact on the repair cost. That’s basically the main reason why the average claims cost for these vehicles has spiked up,” he said.
As for the percentage of the spare parts increased that has been observed, Chua said that it was still in single digits. “It varies from model to model. I don’t have the numbers at hand, but I know that the spare parts inflation increase on a year-to-year basis is on a single-digit level. That for some models is obviously higher than others – if you talk about some luxury vehicles, then definitely the spare parts for these will be slightly higher,” he explained.
While the premium for electric vehicles (EVs) have not gone up, Chua said that PIAM is looking into the insurance coverage structure for these, given the rising repair costs associated with the technology in them, including advanced driving assistance system (ADAS). He said that while the technology may help reduce accidents and save lives, it can also spike up the severity of repair costs when accidents do occur.
“If you look at EVs, the potential cost impact comes from not only the battery. Depending on the model, the battery normally accounts for about 30 to 50% of the cost, and that’s one factor. The other is the ADAS that feature on these cars. Because there are sensors and associated electronic control units (ECUs) all over a vehicle, when you have an accident, especially in frontal collisions, those parts also need to be replaced, and that adds to the cost,” he said.
On the long-standing topic of motor insurance liberalisation, he said the framework for phased liberalisation is still continuing to take place. “We are trying to move towards a more risk-based pricing. This will help consumers, particularly safe drivers, through discounts so that they can enjoy a better premium. At the moment, good drivers are to some extent subsidising the bad drivers right now,” he said.
How – and when – all this will be eventually fleshed out of course remains to be seen, as it has been nearly a decade since the matter first took flight.
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Whatever they say
Finding excuse to raise the premium. Do they realise many don’t even dare to claim thinking they will loss their ciput NCD?
So time for risk based premium calcuoqtion then BNM.
289 million in claims from 10.9 billion in premiums is only 2.6% payout or so called underwriting losses. Do you think insurance companies willing to offer policies if they know it will lead to losses? They would fire their actuarists if this is the case.
Aiya we all know what’s coming after this lah… naik harga…he says good drivers are subsidising bad drivers…but he’s also indirectly saying that non-EV drivers are subsidising EV drivers insurance costs. No mention of how much costs are incurred by accidents involving uninsured (eg motorcycles) and not at fault car drivers. And then talk about risk based pricing… Woi campaign for compulsory 3rd party insurance as part of vehicle road tax la then you’ll see change.
Years after 1st X70, stil importing spare part? Where the technology transfer?
This week, Indonesia announced a significant new incentive for 200,000 electric vehicles (EVs) in a strategic move to slash the burden of fuel subsidies on its state budget. It is high time for Malaysia to ramp up investment to ensure we remain competitive against regional neighbours like Indonesia, Vietnam, Thailand, and the Philippines.
Such opportunities are a ‘durian runtuh’ (unexpected windfall) for those who act decisively; any nation can seize this lead with the right strategy.
We only need to look at Dubai’s visionary smart moves to see how transformative such bold investments can be.
They should increase premiums for repeated claimers cause if it happens too often, we know where the problem lies.
Some problem contributing to this are 3rd party’s claims still being entertained. For my case, a motorcyclist who didn’t have valid driving license who at fault able to claim my insurance after there’s someone can help to claim on his behalf @ the hospital.
Everyone wondering what is the Spare Parts suppliers cronies doing when it is being imported from China how wonderful for decades.
Sir,r u aware there r 2 types of Proton suppliers.
One is DR.Li punya preferred suppliers(u can also call them cronies)from China.
The other is DRB punya bunch of recalcitrant vendors who refuse to cut prices by 30%.
Either way,by the time the parts are airflown or rider delivered…the insurer or direct customer has to bear higher charges.
I’m willing to bet my last dollar that even if vendors cut prices by 30%, Proton Parts Center won’t reduce the price of spare parts to customer. It’s the same for all spare parts distributors worldwide. Why should they discount the parts if customer (including insurance company) is finally going to pay it. If you’re from the industry, you will know that their selling price is more than 3 times the cost of the parts they procure from vendors.
Anjing Longkang k/tard otak masuk Air Longkang said old fags should be stop from driving
hilarious… so this is what MITI is protecting? spare parts from china?
spare parts from china that go through crony companies to be exact
insurance co…finding excuses to raise premium, what else…simple as that! They didn’t highlight how much profit they made each year. They just want to show you the “bad” side of things or skewed data to make it look bad to justify premium increases.
When profit like no tomorrow no one say anything, post some losses only then demand tongkat. F these insurance companies bro.
1 year 2x claim, high chance the company will reject the customer
Increase voluntary excess %.
Increase excess waiver price.
Voluntary excess is like co pay for cars. Some exotics have 30% excess. Unless the 3rd party cancel bang him. Insurance co gg
So finally it’s true that Proton is forced to take spare parts from China rather than from local suppliers. Geeky lied to Proton. Need to boikot Geely.
your agent themselves simply make the big claim..blame them lah
PIAM boss said: “In the case of the X50 and X70, most of these parts are imported from China, so that’s where the cost impact is. When you import those spare parts, then you have that price inflation impact on the repair cost. That’s basically the main reason why the average claims cost for these vehicles has spiked up,”.
Last year, Tengku Zafrul said Proton has bought RM3.2 billion worth of parts and components from Malaysian vendors in 2025.
While X50 being the 2nd best-selling Proton model last year and X70 surpassed 100k cumulative units since its 2018 launch, the 2 statements above seem contradicting each other if we’re looking at sales volume and the timeline both products have been in the market. Is this a case whereby the data was used to project a false impression?
Maybe, I am totally wrong. But the public perception of this news is definitely not good.
but but but, the ugly truth is importing spare parts from china costs less than getting from elsewhere, but when claim money claim high high, so where does the cost in the middle go to?
So,Geely derived Protong cars…raise premiums.
EVs….raise premiums
Those regularly targeted stolen ones..raise premiums.
What else to raise ? But have PIAM have an “ICAC”style body to investigate n blacklist those crooked ‘adjusters” who who work hand in hand with crooked bengkels to “inflate” claims? This has greatly inflated the claims ratio over the years.
Perhaps Ahlokekor should set up a special “undercover” task force to obliterate those ulat.
The insurance industry in Malaysia is regulated & supervised primarily by the Bank Negara, not by the transport ministry.
actually many Vvips expensive cars dont have insurance.
source – lambos and ferraris are often caught at road block without insurance nor roadtax.
What if the reason proton claims are high overall is because they sell the car cheap but sell parts at a premium, ie they making a huge profit on the parts.
So easy… Always blame expensive parts. Show the parts pricing let every Malaysians know what you’re charging. Insurance is a scam business. If not, tell me why every time accident you have few gangs of tow truck circling around victim(s). You can’t control your own employees in the name of adjuster who are colluding with repair shops, you just know how to find ways to increase premium. Insurance premium stay roughly the same despite reducing insured sum every year. Magic? Moreover you require betterment for cars >5 years if we want original parts.
I would love to see some of their claim details. Would love to see how much the actually claim for a part vs actual cost.
Lets be honest, tow truck drivers try very hard to claim they are panel for this and that, they will try very hard to recommend certain shop for repair, they have their agents running around to look for oppoturnity. All these action are because they earn from it and where is the source of money comes from….for sure the bloated claim figure.
They dont want to admit that one of the reason they no longer earn as much or running at a loss because of their own way of running their business.
More than 10 years ago my BLM got involved in an accident, i got a letter telling me my claim is approved for about RM6k. Checking around for original parts price showe that parts alone cost RM1200. Repainting a bumper, hood, and fender plus labour costs RM4800?
All the proton parts imported from china, that local manufacturing ecosystem is all bs….. Miti telling you they supporting 800k people in local jobs.
since they consider increasing premium for cars with high claims, how about car models with the lowest claim? will they have discount?
“In the case of the X50 and X70, most of these parts are imported from China, so that’s where the cost impact is. When you import those spare parts, then you have that price inflation impact on the repair cost. That’s basically the main reason why the average claims cost for these vehicles has spiked up” – so Geely lied to us on local content?