THE GENERAL INSURANCE INDUSTRY OF MALAYSIA: PERFORMANCE AND PROSPECTS
Premium growth moderates amidst economic slowdown
Malaysia’s general insurance industry, unlike its peers in the developed world, was mostly shielded from the direct effects of the global financial crisis. However, its performance during 2009 was affected by the slowdown in the real economy and volatilities in the domestic financial market. A notable effect was the moderation of gross direct premiums growth to 5.7% in 2009 compared to a growth of 8.5% for 2008; the five-year compounded annual growth rate (CAGR) between 2004 and 2009 was 6.2%.
The motor business continued to be the key sector for the general insurance industry, contributing 45.6% of gross direct premiums, followed by fire (17.6%) and marine, aviation and transit (MAT) (10.1%). A slowdown in domestic consumer and business spending, especially for motor vehicles, and a decline in international trade transactions amidst the global economic slowdown were the main factors dragging down overall premium growth.
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