Inflation will Affect Motor Insurance Business

The recent fuel price hike and the high inflationary environment is expected to have negative impact on the motor insurance business. The demand for vehicles, especially the large capacity vehicles, will likely to be depressed. The motor insurance premium growth is expected to be affected as a result.

The gross written motor insurance premiums reached RM4.67 bil in 2007, a growth of 1.4% over 2006.

Kurnia expects that inflation will also put pressure on management expense. The slowdown in vehicle sales however may be temporary as cars are still a neccessity for Malaysians.

Source: Business Times