Malaysia's motor insurance market remained the largest segment of the country's general insurance industry in 2025, generating MYR10.9bn ($2.6bn) in gross written premiums and accounting for around 45% of total general insurance premiums, according to AM Best Senior Financial Analyst Chuah Sin Yee.
The segment recorded premium growth of 5% y-o-y, reflecting continued demand for motor cover. However, underwriting conditions remained challenging, with the market posting an underwriting loss of MYR290m.
Although Malaysia's motor insurance market has continued to record premium growth, higher premium income has not translated into stronger underwriting profitability, as claims costs continue to outpace earnings.
Ms Chuah said the motor segment’s underwriting losses are largely the result of claims payouts exceeding premium income. Rising accident frequency and inflation in the cost of spare parts, particularly in the private car segment, have significantly increased claims costs.
Despite the recent underwriting losses, the motor insurance market remains an attractive business line for insurers because of its scale, stable demand and consistent premium growth.
Digitalisation is expected to remain one of the key forces shaping Malaysia’s motor insurance market over the next few years, with insurers increasingly investing in digital distribution, automation and data analytics to improve operational efficiency, claims processing and customer experience.
At the same time, the growing adoption of electric vehicles (EVs) is expected to introduce new underwriting challenges due to higher repair costs and greater technical complexity.
Malaysian insurers are refining their underwriting approaches by incorporating EV-specific risks into pricing models and product design. Many insurers are also expanding their motor insurance offerings to cover EV-related risks, including home charging equipment, portable charging cables and liabilities arising from charging activities.
For more insights on the topic, check out our August issue of the AIR magazine, where we cover this topic in-depth.