The motor insurance industry in Malaysia is projected to grow at a compound annual growth rate (CAGR) of 6.0%, increasing from MYR11.0 billion ($2.5 billion) in 2025 to MYR14.7 billion ($3.3 billion) by 2030, in terms of gross written premium (GWP), according to GlobalData, a leading data and analytics company.

GlobalData’s Insurance Database estimates that the Malaysian motor insurance industry will register an annual growth rate of 5.8% in 2025. The growth is expected to be supported by the motor hull segment, which is projected to grow by 6.4% compared to 4.2% for motor vehicle liability in 2025.

Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, comments: ” The Malaysian motor insurance market is witnessing a transformation driven by technological advancements and changing consumer preferences. Its growth is attributed to increasing motor vehicle sales, economic recovery, and growing awareness of the importance of comprehensive insurance coverage. However, the rising traffic accident rate has gradually increased the loss ratio of insurers during 2021-24, impacting their underwriting margins.”

The increase in motor vehicle sales supported the growth of motor insurance, and the trend is expected to continue during 2025–30. According to the Malaysian Automotive Association (MAA), motor vehicle sales surpassed 800,000 units in 2024, marking a 2.1% increase from 2023. The MAA expects motor vehicle sales to surge in the second half of 2025, despite a decline in the first half. This surge in vehicle sales correlates directly with the growth of the motor insurance market, which is projected to grow at a CAGR of 6.0% from 2025 to 2030.

Sahoo adds: “Factors supporting the growth in vehicle sales include a resilient domestic economy, a low-interest-rate environment, tax incentives for Battery Electric Vehicles (BEVs), and a low unemployment rate. The benchmark interest rate at 2.75%, which had remained unchanged at 3% since May 2023 and was reduced by 25 basis points in July 2025, will further boost the economy and provide a conducive environment for vehicle loans.”

BEVs in Malaysia accounted for 8.6% of total vehicle sales in the first half of 2025, according to the MAA. The rise in EV sales, supported by government subsidies and import and excise tax exemptions on imported EVs, is creating new opportunities for motor insurers. The trend has prompted insurers to develop specialized products to cater to the unique needs of EV owners, such as battery coverage and specialized repair networks for EVs.

During 2020–24, the motor insurance loss ratio increased from 63.2% to 68.6%. The frequent occurrences of natural disasters, such as floods from November 2024–January 2025 and the Putra Heights fire in April 2025, along with a rising traffic accident rate, are expected to further increase the motor insurance loss ratio in 2025. The accident rate in Malaysia has been on an upward trend; the average traffic accident per day has increased from 1,644 in 2023 to 1,748 in 2024, according to the Bukit Aman Traffic Investigation & Enforcement Department.

Insurers are integrating digital solutions in policy management and claims processing to enhance operational efficiency and customer experience. Benefits such as real-time access to policy coverage, claims submission, roadside assistance tracking, and renewals in one platform or app are improving customer engagement and experience. Also, claims automation cuts notification times from months to weeks and enables insurers to speed claims and reduce associated costs.

Sahoo concludes: “The growth of Malaysia’s motor insurance market remains positive. However, frequent natural disasters and a high accident rate will keep motor insurance profitability under pressure. As the market evolves, insurers will need to remain agile, leveraging technology and innovative solutions to meet the changing demands of consumers and navigate the complexities of the evolving landscape.”