The insurance industry has evolved from its early days from traditional methods of distributing its products and services to the general public. Annette Lim explains the evolution, developments and challenges that are affecting insurance distribution.
mailing, counter sales (mainly motor) or through credit cards (mainly personalised lines), bancassurance, etc. Since no intermediary is involved, very competitive premiums (nett) can be offered to customers.
As there is no requirement on paid-up capital, this is a type of business where agents can start transacting business as soon as they have obtained the PreContract Examination For Insurance Agents (PCEIA) and possess the minimum SPM/MCE (or equivalent) qualification. In view of their low overheads (some may operate at home), they are able to provide service to customers having small and medium-sized risks at small towns. As agents are technically not as equipped as brokers, they normally go for small and medium sized business offering basic covers. Agents are required to pass the PCEIA from the Malaysian Insurance Institute (MII) unless they hold professional insurance qualifications such as Associateship of the Chartered Insurance Institute (ACII), Associateship of the Malaysian Insurance Institute (AMII), etc.
As insurance brokers are advisers and consultants, and are liable to be sued for negligent or wrongful advice, they are generally equipped with staff having professional qualifications such as ACII, AMII, some even with Fellowship qualifications.