2021 | Annually | RM |  General Insurance Association of Malaysia (PIAM)

The chart shows the underwriting profit/ loss of Malaysian general insurance providers in 2021. General Insurance companies earn a profit by charging more in premiums than they pay out in benefits. In contrast, a General Insurance company will be suffering a loss if the benefits paid out are larger than the premium collected.

The combined ratio are used to measure the profitability of an insurance company. A combined ratio measures the money flowing out of an insurance company in the form of dividends, expenses, and losses. Losses indicate the insurer's discipline in underwriting policies.


* Underwriting profit/ loss: Refers to the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums.

The Combined Ratio measures incurred losses and expenses as a percentage of earned premiums. A ratio above 100% means the insurance firm is losing money on its insurance operations. Below 100% suggests an operating profit. Even if the combined ratio is above 100%, a company can potentially still be profitable because the ratio does not include investment income.

* Operating Ratio is the combined ratio less the net investment income ratio (net investment income to net premiums earned). The operating ratio measures a company’s overall operational profitability from underwriting and investment activities. This ratio does not reflect other operating income/expenses, capital gains, or income taxes. An operating ratio of more than 100 indicates a company is unable to generate profits from its underwriting and investment activities

* Management Expense ratios for an insurance company refers to the percentage of premium used to pay the costs of acquiring, writing, and servicing insurance and reinsurance products.