Allianz General sees 22% surge in special perils cover in car insurance

Recent floodings have raised questions about insurance protection in Malaysia.

Allianz General Insurance Company (Malaysia) Berhad said that special perils insurance shot up by 22% or 15,000 out of 68,000 customers (new and renewals) between 1 to 17 January 2022 alone.

According to Allianz General, recent floods in the country have exposed shortcomings towards disaster response and urban planning and have raised questions about insurance protection and whether Malaysians are underserved.

Currently, insurance for homes or vehicles can be purchased directly from the insurance provider (over the counter or online), through intermediaries such as agents, or via platforms like Pos Malaysia, online insurance marketplaces, or insurtech startups.

“In Malaysia, we have options when it comes to insurance products and how we purchase insurance. So, it is not a question about being underserved. However, we are guilty of choosing to forgo flood cover (home insurance), windscreen or even special perils cover (protection against landslide, flood, and other convulsions of nature) when buying car insurance, all in favour of a cheaper policy. This is what leaves Malaysians grossly underinsured,” said Sean Wang, CEO of Allianz General.

According to Allianz General’s numbers, only 11% or 123,000 out of 1.11 million customers chose special perils cover as part of their private car comprehensive cover in 2021. This shot up by 22% following the floods last year.

“The recent floods vividly confirm that insurance is a need—especially when we have assets that we need to protect. There is a need to break the vicious cycle of economising our insurance policy. Either that or we risk continuing to be underinsured and shortchanging ourselves in the process,” Wang added.