Malaysia’s general insurance industry delivered a solid performance in 2025, demonstrating resilience despite mounting claims pressures and evolving risk landscapes. Gross Written Premiums (GWP) rose to RM24.2 billion, marking a 4.8% increase from RM23.1 billion in 2024. More notably, underwriting profit climbed to RM1.2 billion, up by RM125 million year-on-year, with the overall Combined Ratio holding steady at around 93%—a sign of sustained underwriting discipline.

While motor insurance remains the backbone of the industry, it continues to face profitability challenges. Accounting for 45.2% of total premiums, the motor segment generated RM10.9 billion in GWP but recorded an underwriting loss of RM289.3 million. A Combined Ratio of 103% indicates that claims payouts exceeded premiums collected, although a slight improvement from the previous year suggests tighter cost control measures are beginning to take effect.

The pressure on motor insurance stems from both rising claim frequency and severity. Private car claims remained above 7%, driven by high-volume models such as the Proton X50 and X70, particularly among younger drivers. At the same time, claim severity increased to RM8,831, largely due to inflation in spare parts, especially for models like the Proton Saga and X50.

In contrast, non-motor segments played a crucial role in lifting overall profitability. Fire insurance emerged as a standout performer, delivering an underwriting profit of RM700.8 million with a low Combined Ratio of 69.5%. Premiums in this segment grew by 6.9% to RM5.0 billion, supported by higher rebuilding costs and increased coverage values, particularly for older suburban homes.

Marine, Aviation, and Transit (MAT) insurance experienced a slight contraction of 2.2%, with GWP declining to RM1.79 billion. Despite this, the segment maintained healthy profitability, posting an underwriting profit of RM108.1 million and a Combined Ratio of 73.1%. Offshore oil-related and cargo businesses continued to dominate the portfolio.

Personal Accident (PA) insurance recorded the fastest growth among all segments, expanding by 12.2% to RM1.6 billion. This surge was largely driven by increased demand for travel insurance, reflecting a steady recovery in travel activity since 2023. The adoption of digital distribution channels and broader economic recovery also contributed to the segment’s upward trajectory. Consumers are increasingly choosing destinations where the Ringgit offers stronger purchasing power, further boosting travel-related coverage.

Despite positive financial results, the industry continues to navigate a complex risk environment. Geopolitical developments, inflationary pressures, and technological advancements are reshaping the insurance landscape.

Climate-related risks have become more prominent, with recent flood events such as the Hat Yai floods in December 2025 underscoring the importance of comprehensive coverage. Insurers responded swiftly by issuing advisories and accelerating claims support to affected policyholders.

Technological transformation is also influencing risk profiles, particularly in the motor segment. The rise of electric vehicles (EVs), digitalisation, and autonomous technologies is prompting insurers to reassess underwriting strategies and claims models. Insights from the Malaysian Claims Analytics Study 2025 are helping guide these adjustments.

At the same time, affordability remains a key concern. Inflation continues to impact consumer purchasing decisions, leading to increased price sensitivity and potential adjustments in coverage. To address this, insurers are focusing on cost efficiency, expanding microinsurance initiatives such as the Perlindungan Tenang Voucher 3.0 Programme, and enhancing consumer education.

Efforts to improve accessibility and protection have gained traction. As of April 2026, nearly 68,000 policies were issued under the Perlindungan Tenang initiative, with over RM2 million in vouchers redeemed. Digital tools such as the Digital Roadside Assistance (DRA) application are also enhancing claims transparency and efficiency, offering real-time support and authorised towing services.

Collaboration remains central to the industry’s approach. Partnerships with organisations like VTAREC promote road safety awareness, while joint efforts with FINCO focus on building resilience in disaster-prone communities through education and preparedness programmes.

Looking ahead, Malaysia’s general insurance industry is expected to maintain its focus on underwriting discipline, operational efficiency, and innovation. Key areas of development include EV insurance solutions, climate risk coverage, and digital distribution platforms.

As the industry continues to adapt to shifting economic and technological conditions, its ability to balance growth with risk management will be critical. The 2025 results highlight a sector that is not only financially sound but also increasingly proactive in safeguarding policyholders, businesses, and communities across the nation.