KUALA LUMPUR: The General Insurance Association of Malaysia (PIAM) has revised down its growth forecast for 2015 to 3% to 4% from 5.5% to 6.5%, owing to the present economic headwinds and the weakening of the ringgit.

PIAM chairman Chua Seck Guan said the general insurance industry's gross written premiums (GWP) grew at a slower rate of 2.3% to RM9.07 billion in the first half of 2015 (1H15), compared with 6.4% growth in 1H14.

“Motor insurance registered a much slower growth rate of 2.1% in 1H15 compared with 8.3% in 1H14,” Chua told a news conference to announce 1H15 general insurance industry results yesterday.

Fire insurance saw a higher growth rate of 5% compared with 4.2% last year, he added.

The other strong performing lines include marine, aviation and transit and personal accident with growth rates of 6.1% and 7.4% respectively, surpassing 1H14’s growth of 0.4% and 4%.

On the financial performance, the industry turned in a higher underwriting profit of RM754 million in 1H15 compared with RM637 million in 1H14, with industry loss ratio improving to 56.7% from 58.4%.

Chua also said despite the challenging business environment coupled with the weakening ringgit, the local general insurance industry is still attractive to foreign investors.

“It is not easy to start a business and thus, it is much easier for foreign players to invest in local general insurers,” he added, noting that there is still room for mergers and acquisitions.

PIAM foresees foreign ownership of insurance players in Malaysia to grow further.

Chua, who is also the chief executive officer of MSIG Insurance (Malaysia) Bhd, said consolidations are likely to take place among its 22 licensed direct insurance companies.

Presently, PIAM has 28 member companies consisting of all licensed direct insurance and reinsurance companies for general insurance in Malaysia.

This article first appeared in digitaledge Daily, on August 14, 2015.