Published: Thursday November 1, 2012 MYT 4:25:00 PM
Updated: Thursday November 1, 2012 MYT 4:26:41 PM
Awang Adek: Insurance premium payments for vehicles to increase in stages until 2015
By MARTIN CARVALHO
KUALA LUMPUR: Motor vehicle premium payments, currently the lowest in the region, will see changes by 2015 to reflect actual risks factors said Deputy Finance Minister Datuk Dr Awang Adek Hussin.
"The situation had reached a critical stage for insurers here who had to payout RM3 for death and injury claims to every RM1 paid as insurance premium last year," he said when replying to a question raised by Hamim Samuri (BN-Ledang) in Dewan Rakyat Thursday.
To address this, Awang Adek said that a new motor insurance framework was agreed upon by the Government and the insurance industry last year to streamline and balance premium payments to reflect the current risk factors.
Under the framework, insurance premium payments would be increase at a nominal rate in stages until 2015.
"Those who have a lower risk profile will then pay lower insurance premiums," he said, adding that this included the age of the vehicle
"Motor insurance in Malaysia is one of the lowest in the region compared to neighboring Singapore, Thailand and Indonesia.
"This is because insurance premium here based on motor tariffs has not been reviewed since 1978 to reflect the changing surrounding such as risk profile of drivers and vehicles," he said.
Awang Adek added based on a study conducted by Ministry of International Trade and Industries, motorists paid an average of RM3,062 annually as insurance premium for their cars compared to RM7,960 in Singapore, RM6,736 in Thailand and RM4,593 in Indonesia.