PIAM: Motor Insurance Posts RM289.3 Mil Loss in 2025, More and Costlier Claims, Notably with Proton Models

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.

Higher Claim Frequency for Certain Models

PIAM stated that the claim frequency for private cars remained above 7% in 2025. Notably, 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. The average cost per claim increased by about **20% to RM8,831 in 2025** , particularly for models such as the **Proton Saga and X50**.

Why Are Claims Costlier?

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."*

**Chua Kim Soon, PIAM CEO**

As for the percentage of spare parts increase observed, Chua said that it was still in single digits, though it varies from model to model. Luxury vehicles, unsurprisingly, see higher spare parts inflation.

Electric Vehicles (EVs) and ADAS: A Future Concern

While premiums for **Electric Vehicles (EVs)** have not yet gone up, 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 Systems (ADAS)** .

Chua noted that while ADAS may help reduce accidents and save lives, it can also spike 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. 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."*

**Chua Kim Soon, PIAM CEO**

Moving Toward Risk-Based Pricing

On the long-standing topic of motor insurance liberalisation, Chua 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."*

**Chua Kim Soon, PIAM CEO**

How and when this will be eventually fleshed out remains to be seen, as it has been nearly a decade since the matter first took flight.

Summary of Key Figures

| Total motor insurance premiums (2025) | RM10.9 billion |

| Percentage of industry premiums | 45.2% |

| Underwriting loss | RM289.3 million |

| Combined ratio | 103% |

| Average cost per claim (2025) | RM8,831 |

| Increase in average claim cost | +20% |

| Private car claim frequency | Above 7% |

The Malaysian motor insurance industry is facing a perfect storm of **more frequent claims** (notably among younger drivers of popular Proton models) and **costlier repairs** (driven by imported spare parts inflation and advanced vehicle technology).

While PIAM works toward a **risk-based pricing model** that could eventually reward safe drivers with lower premiums, the immediate outlook suggests that pressure on insurance premiums may continue to rise particularly for popular imported-component-heavy models and the emerging EV segment.

Consumers can expect ongoing discussions between PIAM, regulators, and insurers as they attempt to balance affordability with the rising cost of claims.