KUALA LUMPUR: Electric vehicles (EVs) present a new form of risk to the local insurance industry.
The risk include issues related to vehicle safety, maintenance and repairs skills that are different from conventional internal combustion engine (ICE) vehicles and cybersecurity concerns.
The risk factor constitutes a brand new experience for local general insurers related to unconventional high-speed vehicles according to the General Insurance Association of Malaysia (PIAM).
Its chief executive officer, Chua Kim Soon, said these risks are going to be continually evolving as Malaysia sits at its early stages still.
According to Chua, ICE vehicles have been around for at least 120 years.
EVs, on the other hand, are barely hitting a 15-year mark in terms of adoption.
“With ICE vehicles, we know how to repair them, we know what are the risks and there is plenty of experience surrounding it in general.
“But for an EV, it is a new risk because it is technology which has been around for 30 years or so,” he said during PIAM’s media briefing here yesterday.
Hence, Chua said when it comes to insurance for EVs, it needs to be dealt with differently and delicately.
He said EV’s could be plug-ins or fully electrical – and this would constitute various electric technologies combined together.
“Certain vehicles have one panel of operations, which takes getting used to. Our studies show that people switching from an ICE vehicle to an EV have a higher risk of being involved in an accident,” he said.
Within the safety aspect of things, as EVs are highly wired vehicles, Chua added the issue of scams and hacking is a topic of discussion.
Skills and capabilities are another factor that Chua reckoned will be taken into consideration for EV insurance.
“Going into a regular workshop may no longer be a possibility, because the EV would require an electrician not a mechanic.
“At present when you buy an EV, everything is guaranteed under the manufacturer, but what happens when that expires?” he questioned.
Chua said the local general insurance industry has been conducting in-depth research on this while working together with all the relevant parties.
“We have worked out some recommendations. One of the things that we are trying to drive at is supporting long-term sustainability by establishing standards and protocols.
“So, we will be working with a lot of agencies like the Road Transport Department (JPJ), Transport Ministry and others. This is to ensure the ecosystem is ready,” he stated.
He stressed PIAM will not be setting standards, but rather working together for better engagement.
“JPJ has an engineering department that will look at setting standards – they’ve been looking at various sources and practices from manufacturers and also international companies and countries; for instance, they will be the ones to come up with standards or guidelines on independent repair workshops,” he said.
“All these initiatives and discussions will hopefully achieve the goal of reducing and retaining claim costs as much as possible so the market is ready for stronger EV penetration.”
Chua, however, expects EV adoption to grow quickly in the next few years.
“EV and hybrids have shown rapid growth, driven by the fuel subsidy structure, better technology and duties exemption.
“It contributed to 8.7% of new car sales in 2025.”
Meanwhile, Malaysia’s general insurance industry recorded a gross written premium of RM24.2bil in 2025, representing a 4.8% increase from RM23.1bil in 2024. This was driven by expansion in the motor and fire segments.
PIAM chairman Ng Kok Kheng does not expect that equation to shift very much this year, as both the motor and fire segments are the two biggest portfolios of the industry.
Furthermore, motor insurance is the largest segment, accounting for 45.2% of the total general insurance business written, followed by fire insurance at 20.9% last year.
“Fire insurance is largely dependent on economic activities such as more factories and homes being developed.
“We expect it to continue growing this year as there are a lot more projects coming up,” he told StarBiz.
Marine, aviation and transit insurance made up 7.4% of the general insurance portfolio, followed by personal accident insurance at 6.5% and medical and health insurance at 5.1%.
