Malaysia - Car Theft and Insurance 2011

Vehicle theft fell in Malaysia during 2009, the first annual reduction in theft since 2001. Following a period of steep rises in theft, particularly of motorcycles, combinations of Police initiatives to apprehend Organised Criminal Gangs (OCGs) and media coverage to increase public awareness appear to have helped reverse the long-term trend.

However, this does not mean that vehicle theft is no longer an issue. 2009 also saw recovery rates for stolen passenger cars fall to under 10%, whilst the average cost of a insurance claim for theft increased for the first time in five years. Both of these factors suggest rises in profit-motivated theft, targeting higher-value vehicles to be broken down for parts or to be shipped out of the country and sold for the whole vehicle price.

This evidence is supported by Police commentary, who say that the work of large-scale OCGs shipping luxury foreign brand vehicles over borders to neighbouring countries is increasing, using increasingly sophisticated, electronic theft methods to defeat vehicle security.

Meanwhile, the motor insurance industry continues to be closely governed by the Motor Tariff, preventing insurers from offering any incentive for fitment of security features such as immobilisers, alarms or stolen vehicle tracking systems. The majority of the industry agrees that the time has come for progressive de-regulation of the insurance market, but parties cannot agree on the extent of these changes. Any changes designed to incorporate vehicle security into the calculation of insurance premium therefore remains at least two years away.

In an attempt to increase the general levels of security feature fitment and to maintain the fall in vehicle theft, the Malaysian Road Transport Department (JPJ) recently introduced new legislation to mandate that all new passenger cars are fitted with an immobiliser system. Evidence from other countries shows that theft typically falls following the introduction of such legislation in the past, but thieves have moved on to improve their methods in recent years and could yet be able to easily overcome basic immobiliser systems which are all that are specified in the new regulations.

With increases in the typical thief’s capability, new legislation and proposed de-regulation of the insurance industry, Malaysia is a complex and changing market. The current level of media and public awareness of vehicle theft mean that changes in the future are likely, but they will need to guard against the latest methods of thieves in order to maintain the downward trend in overall theft of vehicles.

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