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.

>Glossary

* 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.