Motor insurance premiums likely to keep rising as claims, costs grow

Competition, inflation, increase in EVs that cost more to repair among factors driving the trend

- Joyce Lim

Motor insurance premiums are expected to continue rising as insurers grapple with mounting losses and rising claims, said industry experts.

Latest industry statistics from the General Insurance Association (GIA) seen by The Straits Times show that in the first three months of 2025, gross written premiums for motor insurance rose by 9.4 per cent to $368.2 million, compared with the same period in 2024. Underwriting losses were up by about 14 per cent from $11.6 million to $13.3 million.

For the full year of 2024, underwriting losses widened significantly to $33.8 million, from $7.7 million in 2023 and $21.6 million in 2022. This marked a sharp reversal from the underwriting profits of $49.7 million in 2021 and $104.5 million in 2020. Meanwhile, gross written premiums rose 11.3 per cent to $1.21 billion in 2024.

Several factors are driving this trend.

Insurers grappling with more accident claims and rising repair costs in a competitive market is one reason, said Ms Judy Ng, partner of financial services consulting at KPMG in Singapore.

Global inflation, which has pushed up the cost of vehicle parts, and the growing presence of electric vehicles (EVs) which are more expensive to repair are also contributing to mounting expenses.

"Insurers have incurred higher costs of motor claims due to their efforts to fulfil a rising number and cost of motor accidents amid market competition," said Ms Ng.