Report Overview

Rising vehicle sales, economic growth, regulatory mandates, increasing disposable income, and the adoption of digital insurance platforms are expected to drive Malaysia Motor Insurance Market during the forecast period between 2024 and 2030.

Malaysia Motor Insurance Market – Industry Trends & Forecast Report, 2030

Malaysia Motor Insurance Market size by value was estimated at USD 1.89 billion in 2023. During the forecast period between 2024 and 2030, Malaysia Motor Insurance Market size is expected to expand at a CAGR of 1.70% reaching a value of USD 2.12 billion by 2030. The growth of Malaysia Motor Insurance Market is driven by several key factors, including the increasing number of vehicles on the road, rising disposable income, and strict regulations mandating motor insurance. Additionally, economic development, technological innovations, and supportive government initiatives play significant roles. The adoption of digital insurance platforms and the phased liberalization of motor tariffs, which introduced risk-based pricing, have also contributed to market expansion.

Motor Insurance – Overview

Motor insurance is a contract between a vehicle owner and an insurance company, providing financial protection against losses due to accidents, theft, or natural disasters. It covers damages to the insured vehicle and liabilities towards third parties. Policies typically include liability, collision, and comprehensive coverage. Motor insurance is mandatory in many regions to ensure financial responsibility and protect all road users. Additional benefits may include roadside assistance and coverage for medical expenses.

Malaysia Motor Insurance Market   

Growth Drivers

Increasing Awareness about Benefits of Motor Insurance Products

Growing awareness about the importance of motor insurance is a significant driver for Malaysia Motor Insurance Market. Consumers are increasingly recognizing the financial protection and security that insurance policies offer against accidents, theft, and natural disasters. Educational campaigns by insurers and government initiatives have played a crucial role in enhancing this awareness. Additionally, the rise of digital platforms has made it easier for consumers to access information and purchase insurance policies online, further boosting the growth of Malaysia Motor Insurance Market.

Challenges

Fraudulent Claims

Fraudulent claims significantly impact Malaysia Motor Insurance Market, costing insurers around MYR 1 billion annually. These activities, including staged accidents and inflated claims, increase operational costs and lead to higher premiums for genuine policyholders. Insurers are adopting advanced technologies like telematics and artificial intelligence to detect and mitigate fraud. Despite these efforts, fraudulent claims remain a persistent challenge, affecting the profitability and stability of the motor insurance sector.

Impact of Escalating Geopolitical Tensions on Malaysia Motor Insurance Market  

Escalating geopolitical tensions, such as Russia-Ukraine war and conflicts in Israel-Palestine, have significantly impacted Malaysia Motor Insurance Market. These tensions have led to supply chain disruptions, affecting vehicle production and increasing repair costs. Consequently, insurance premiums have risen due to higher claims and operational costs. Additionally, heightened uncertainties have prompted insurers to adopt more conservative risk assessments, potentially limiting coverage options. The overall economic instability has also influenced consumer spending, leading to fluctuations in policy renewals and new purchases. Despite these challenges, insurers are leveraging advanced technologies and strategic partnerships to navigate the complex landscape.

Malaysia Motor Insurance Market

Segmental Information  

Malaysia Motor Insurance Market – By Policy Type

By policy type, Malaysia Motor Insurance Market is divided into Third Party Liability Insurance, Comprehensive Coverage, Collision Coverage, and other (Fire & Theft Motor Insurance) segments. The comprehensive coverage segment is the largest policy type in Malaysia Motor Insurance Market, as it offers extensive protection, covering damages to both the insured vehicle and third-party liabilities. Most vehicle owners prefer comprehensive coverage due to its all-inclusive nature, which includes theft, fire, and various forms of accidental damage. Its broad protection scope and the higher perceived value it provides make it the leading segment in Malaysia's motor insurance landscape.

Malaysia Motor Insurance Market – By Vehicle Age

Based on vehicle age, Malaysia Motor Insurance Market is divided into New Vehicles and Old Vehicles segments. The old vehicles segment holds a larger market share of Malaysia Motor Insurance Market by vehicle age. The segment is driven by the high number of older vehicles on the roads, as many consumers in Malaysia tend to retain their vehicles for extended periods due to economic factors. The insurance demand for older vehicles is significant, reflecting the need for coverage against potential damages and repairs, which are more likely in older models compared to new vehicles that often come with manufacturer warranties.

Malaysia Motor Insurance Market – By Vehicle Type

On the basis of vehicle type, Malaysia Motor Insurance Market is divided into Passenger Vehicles and Commercial Vehicles segments. The passenger vehicles segment accounts for a larger market share of Malaysia Motor Insurance Market by vehicle type, due to the higher number of passenger vehicles on the road, leading to increased demand for motor insurance. The widespread ownership of passenger cars among individuals and families drives the growth of the segment. Additionally, the mandatory insurance requirements for passenger vehicles further contribute to its prominence within the market compared to the commercial vehicles segment.

Competitive Landscape

Key players in the highly competitive Malaysia Motor Insurance Market include Malaysia Life Ltd, MSIG Insurance (Malaysia) Pte Ltd, Tokio Marine Life Insurance Malaysia Ltd, Etiqa Insurance Pte Ltd, The Great Eastern Life Assurance Company Ltd, Liberty Insurance Pte Ltd, United Overseas Insurance Ltd, Ecics Limited, AXA Insurance Pte Ltd, Auto & General Insurance (Malaysia) Pte Ltd, and AVIVA Ltd. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Scope of the Report

By Policy Type

• Third-party Liability Insurance

• Comprehensive Coverage

• Collision Coverage

• Others (Fire & Theft Motor Insurance)

By Vehicle Age

• New Vehicles

• Old Vehicles

By Vehicle Type

• Passenger Vehicles

• Commercial Vehicles

By Distribution Channel

• Insurance Agents/Brokers

• Direct Response

• Banks