Thursday, 29 December 2005 - The general insurance industry recorded an 8.2 per cent growth in gross premiums to RM8.09 billion for the first nine months of this year, up 1.8 per cent compared with the corresponding period of last year.

General Insurance Association of Malaysia (Piam) chairman Hashim Harun attributed the growth to the country's positive economic performance, sound financial and business practices, expanded alternative distribution channels such as bancassurance and direct marketing, and the greater deployment of information technology.

The marine, aviation and transit sector was the major contributor, recording a 17.5 per cent increase in gross premiums while motor insurance went 12.7 per cent.

Insurance bonds, personal accident and workmen's compensation and employer's liability insurance also recorded increases of 13.5 per cent, 9.4 per cent and 11.2 per cent respectively.

However, the medical insurance segment grew only 1.2 per cent as general insurers went through a period of structural and regulatory reforms in tis line of business.

The industry's overall net claims incurred ratio for motor, the largest single class of business underwritten, marginally improved to 67 per cent compared to 71.8 per cent for the same period last year.

Hashim said the implementation of the e-Insurance Project, he electronic link-up between insurers and the Road Transport Department since January this year, has significantly help reduce premium "leakage".

The application of electronic cover notes, he said, has proven to be effective in reducing the incidences of forged physical cover notes as well as in improving the delivery system to the motoring public.

Hashim added that the industry is poised for steady growth in 2006 in tandem with the favourable economic outlook.

Medical and health insurance, he noted, is set to be the fastest=growing sector for next year, driven by consumers' need for protection against the escalating costs of medical care.

However, vehicle thefts will continue to be a problem, he added.

"The industry estimates showed that by end-2005, the number of insured stolen vehicles will continue to escalate to about 30,240 units with an estimated value of RM560 million," he said.

"The industry is now working closely with police, other government agencies and the relevant private sector organisations to strengthen initiatives targeted at combating vehicle thefts," he said.