All general insurance and takaful companies in Malaysia are closely collaborating with all stakeholders on the crucial issue of total loss vehicles.
In a statement issued on 27 January 2025 the General Insurance Association of Malaysia (PIAM) said it supports all stakeholders including Bank Negara Malaysia (BNM), the ministry of transport, the Road Transport Department (RTD), Insurance Services Malaysia, Puspakom and the Malaysian Takaful Association.
PIAM said it welcomes RTD’s initiative to enforce stringent checks on repaired accident-damaged vehicles and advocates for transparency in ensuring that only vehicles deemed safe and fit for road use are allowed back into service.
The PIAM statement said, “Our primary concern is the safety of all road users. As such, the vehicles declared beyond economic repair (BER) by insurers must be assessed and repaired appropriately, with all necessary documentation, including the roadworthiness certification by a credible vehicle inspection provider (in place) before the vehicles are permitted on the road.”
PIAM’s statement came in response to RTD director general Datuk Aedy Fadly Ramli’s remarks regarding stricter compliance with auction standards for vehicles categorised as BER and authorised automotive treatment facilities.
The Association also urges vehicle owners to ensure their vehicles are adequately covered by motor insurance, either considering options from different insurers, or returning to the original insurer that declared BER.
Motor insurance is the largest line of business in Malaysia with a 45% share of total premium. Despite a 9% growth, reaching MYR9.8bn in 2023, motor insurance saw an underwriting loss of MYR156m with net claims incurred ratio of 66.7%, reverting to pre-COVID-19 pandemic levels.
The loss has been attributed to deterioration in the motor claim experience, which edged closer to pre-pandemic levels due to inflationary cost pressures on vehicle spare parts and an increase in the road accident rate.