India's non-life insurance industry stands to lose almost three times the profit it made last year because of the need to increase provisions for motor third party insurance claims, reports the Times of India (Source: Asia Insurance Review 10 March 2011).
In the Malaysian insurance environment, the increase provisions for motor claims had long being in place. Losses suffered by General Insurers especially from third party bodili injury and death claims had progressively deteriorated with claims ratios exceeding 200% since 2006.
In 2010, for every ringgit of third party bodily injury and death premiums received, Insurers paid out RM2.82 in claims before factoring in other related costs. The growing gap between premium collected and claims paid out by the industry had contributed to the displacement of third party insurance covers as more Insurers are not able to sustain such business on a financial viable basis.
As a result, some motor vehicle owners have had to purchase their motor policies from the Malaysian Motor Insurance Pool which has seen a sharp increase in the number of policies issued from 128,058 in 2009 from 5,897 in 2007 (The Star 24 March 2011)
For vehicle owners wishing to take up the motor insurance directly with the Insurers, additional premium or an accompanying PA Insurance, sometimes, is required as a pre-requisite to insuring their motor vehicles.
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