insurers forked out rm14 7 million a day in 2017 because malaysians can t drive

Insurers forked out RM14.7 million a day in 2017 because Malaysians can’t drive

In total, RM5.38 billion was paid out for motor insurance in 2017 but the segment did experience marginal growth

Dinesh Appavu Photo

Dinesh Appavu

13 Mar 2018

RM14.7 million a day… just let it sink in for a while. That’s the average payout a day from insurers for motor insurance claims in 2017. In total, the industry shelled out RM5.38 billion the entire year for that segment according to the annual report by the General Insurance Association of Malaysia (PIAM).

The claims stem from motor policies and cover all related subsequent loss such as property damage, bodily injury and vehicle theft. This includes large claims involving death and injuries, not to mention severe losses in both own and third-party property damages as a result of motor vehicle incidents.

Statistics from the report paint a less than flattering picture of local driving practices despite a negligible improvement in accidents and deaths. As of September 2017, the Ministry of Transport recorded 5,083 deaths from 400,788 accidents. Laid on the 2016 figures of 7,152 deaths from 521,466 accidents, there is a marginal progress but there’s still more left to be done.|

Motor insurance accounts for the largest share of insurance policies at 47.1 per cent in 2017, registering a growth of 1.9 per cent over the 0.8 per cent recorded in 2016 despite motor vehicles sales dropping below 580,000. Monetarily, this translated into collections of RM8.32 billion in premiums over the RM8.16 billion registered in 2016.

Overall, the general insurance industry netted gross written premiums totaling RM17.65 billion in 2017 with growth remaining stagnant compared to the previous year. It recorded a positive upswing in the second half despite falling by 1.9 per cent in the first half.

“PIAM will intensify collaboration with all major stakeholders to reduce road accidents nationwide. The current trend of accidents and fatalities caused by heavy and commercial vehicles posed the gravest concern to all,” said Antony Lee, chairman of PIAM.

Cooperation from all parties is crucial in alleviating road accidents and with the detariffication of motor insurance, Lee added that the Kejara System is especially useful for the industry in separating high-risk and errant drivers from the safe ones, the latter of which will be incentivised with better rates. The association is determined to reduce road accidents by 20 per cent this year and by 50 per cent in 2020.

“The Phased Liberalisation of the Motor Tariff is proceeding smoothly since its implementation on 1 July 2017. The National Consumer Education Campaign has raised awareness amongst the public on the benefits to consumers,” revealed Chua Seck Guan, deputy chairman. As the phased liberalisation progresses, the industry has kept pace with the introduction of new and innovative products to provide better protection for consumers. To date, the industry has launched 31 new motor products in a bid to adapt to the rapidly evolving scene.

Part of it includes the Motor Product Selector on PIAM’s website as detailed by Mark Lim, the chief executive officer, “The Motor Product Selector featured on PIAM’s website provides consumers with information on the insurance covers available. Consumers can select the protection based on their needs and receive quotations from insurance companies of their choice. This online platform connects consumers directly to the insurers to shop around for their Motor insurance policies.”

PIAM has also organised its Accident Assist Call Centre (AACC) for help and peace of mind. Motorists involved in accidents can call the 24/7 toll-free hotline at 1300-22-11-88 for emergency roadside assistance such as towing services and responding to insurance claims enquires from motorists.

It wasn’t all doom and gloom however as vehicular theft declined by 23 per cent to 15,323 cases. PIAM credits the police, customs department and other law enforcement agencies in combating the issue.

Lastly, the industry has launched the Fraud Intelligence System (FIS) in October 2017 to combat motor insurance fraud in Malaysia. A collective effort of all members, the initiative deploys the latest data analytics technology to alert insurers when a claim is first submitted by a motorist. The system will expose fraud syndicates at work and provide leads for detailed investigation by insurance companies eventually leading to their prosecution under the law.

How is the industry going to navigate 2018? If the statement from the press release is anything to go by, the champagne will be staying put behind the bar. To quote PIAM directly, “Growth in 2018 is likely to remain subdued.”