Market value for used cars has declined
KUALA LUMPUR: The outlook for the general insurance industry for the second half of this year and 2016 is expected to be stagnant due to the fall in new car sales and the market value of used cars.
The chief executive officer of the Malaysian Insurance Institute (MII), Datuk Syed Moheeb Syed Kamarulzaman, said on Thursday the insurance industry's growth depended on the two factors as 50% of its portfolio was motor business.
He said when the market value for used cars declined, it would impact their premiums and when new car sales slowed down, they would impact them as well.
"We anticipate a stagnation in growth as these two factors contribute significantly to the industry," he told a media briefing at the General Insurance Agents Convention 2015 (GIAC) here.
The GIAC, which attracted over 300 participants, is organised by the MII.
Deputy Finance Minister, Datuk Johari Abdul Ghani, officiated the event.
Syed Moheeb said new car sales would usually stagnate in the second half of the year and hence year-on-year, there would not be much growth seen for the said period.
"The growth is tapering off due to the moderation in consumer spending and challenging business and operating environment," he said.
He said the motor insurance industry registered a much slower growth rate of 2.1 per cent for the first half of this year compared with 8.3 per cent for the same period last year.
Moving forward, Syed Moheeb said, the current slowdown in the domestic and global economies would last until 2016 and the general insurance industry would not see much growth in the motor insurance sector.
"The strategy which it (the industry) is adopting next year is basically to focus on training programmes and upgrading the professional education syllabi to meet the changing needs of the industry," he said.
MII and Omni View Sdn Bhd signed a memorandum of agreeement (MOA) on the sidelines of the event.
Under this MOA, Omni View will represent MII in delivering the management leadership development programmes under MII's banner and to act on its behalf to deliver well-crafted and innovative professional management training.
Earlier, in his address, Johari said the insurance industry must have a comprehensive understanding of the global insurance environment which was continuously affected by volatile global financial developments.
"Malaysian insurance companies must be able to analyse and assess the economic and political risks and opportunities which could impinge on their internal strategic planning," he said. - Bernama
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