Malaysia's general insurers have suffered losses from underwriting motor insurance last year, its fifth straight year, a reflection of the high rate of accidents and theft in the country.

The losses have also been rising every year for the last five years, said the General Insurance Association of Malaysia (PIAM).

The combined loss ratio for motor insurance business last year was 115.5 per cent compared with 114.1 per cent in 2007 and 104.4 per cent in 2006.

The ratio indicates the industry's overall underwriting profitability. A combined ratio of less than 100 per cent means insurance firms are making money but anything over 100 is an underwriting loss.

Although gross direct motor insurance premiums increased by 10.1 per cent to RM4.89 billion last year, PIAM said the growth rate was unlikely to be repeated this year.

"This growth rate is unlikely to be sustained in 2009 in view of the current economic slowdown. Insurers have also expressed their concerns over the increasing claims payouts," it said in a statement yesterday.

Due to higher losses, insurers are getting tougher on their underwriting controls for motor insurance beginning this year.

These measures, PIAM said, includes the application of premium loadings or the extra charges for those deemed to have higher risks.

Insurers are also more picky in approving new policies and renewing existing ones.

This has led to some vehicle owners experiencing difficulties renewing insurance, especially third party insurance cover.

"The fact that claims ratios for third party bodily injury claims which have exceeded 100 per cent for many years skyrocketed to 262 per cent in 2007 and 340 per cent in the first half of 2008 is a key contributory factor to this development," PIAM said.

PIAM said that since 1992, the industry had formed the Malaysia Motor Insurance Pool (MMIP) which provides motor insurance to vehicle owners who have difficulty or are unable to obtain motor insurance from normal commercial insurance market.

"The MMIP was formed to ensure that all vehicles on the road would never be without access to the minimum motor insurance cover required by law," PIAM said.