AMII: Insurance Professional Recognition
To Improve Public Status
An engineer proudly adds the title ‘Ir’ to his name when he/she qualifies. A qualified architect adds the title ‘Ar’ before his name. Ask an LLB and CLP holder how he/she earns a living and the answer is, “I’m a lawyer.” Ask an ACCA or CIMA holder and the answer is likely to be, “I’m an accountant.” But ask an insurance/takaful professional with an Associate of the Malaysian Insurance Institute (AMII) designation after his/her name, what is he/she supposed to answer – “I’m a ...” “What? Oh ... insurance agent, ah?” comes the reply in quirky Malaysian English. The AMII has little recognition by the public and people are actually asking, “What is an AMII?”
Only the Toughest Survive AMII
Becoming an Associate Member of The Malaysian Insurance Institute (AMII) is not easy. You have to go through all the blood, sweat, tears and heartache for years, and have to pass a rigorous course of exams. Not to mention re-sitting for some of the tough papers. This proves that an individual has achieved a certain level of knowledge and professionalism which gives him/her the edge over his/her competitors in the job market and status among his/her peers. AMII is certainly not for the weak of heart and feeble of will. But, the value of this hardwork is not always recognised – both within the insurance/takaful industry and by the public.
“It is one thing to have the best professional qualification but it is quite another thing to have the industry recognising that qualification as one that not only proves that the individual is competent in the job but also a prerequisite for career movement within an organisation,” says Hashim Harun, Chairman of MII in the ‘New Chairman With A Mission – Interview with Hashim Harun’, published in the INSURANCE magazine, Issue 02/2009/Q4; OctDec 2009.
The message that has not come across is that professionalism should carry pride with it. Being an AMII means something and studying for professional qualification should brighten individual career prospects and help a person stand out from the crowd. There needs to be more awareness of the insurance professional qualification. And, we need to let the public know of other ways in which we are raising professional standards.
So, What Exactly Is An AMII?
AMII is a professional qualification that provides a comprehensive plan of action in producing technically qualified insurance professionals in all sectors in the insurance industry. AMII provides indepth technical knowledge on underwriting, claims and operational management of an insurance organisation.
The quality of the AMII examination is not in question. The AMII is awarded by the professional body, The Malaysian Insurance Institute (MII) according to the standards that they have set. MII has been around for 44 years and is the leading insurance education and training institution, providing internationally recognised qualifications in insurance, risk management and financial planning. In 2007, MII won the ‘Professional Service Provider of the Year 2007 Award’ by The Review Worldwide Reinsurance in London and in 2012, the Institute was awarded the “Educational Service Provider of the Year 2012” by the Asia Insurance Review. MII is a brand that is quite strong but only among the insurance/takaful industry, especially amongst MII’s current and former students and participants.
Interestingly, however, in The Star newspaper advertisement on May 9, 2012, Universiti Tun Abdul Razak (UniRazak) seemed to be looking for Professors/Associate Professors/Lecturers for the field of study – insurance. For Lecturers, they were looking for candidates who possess a minimum requirement i.e. Master’s Degree in the related field – insurance. And, to the author’s surprise, candidates with professional qualification/membership i.e. AMII are encouraged to apply. It is hoped that interfaces between universities and MII will grow and become a permanent feature for both the academic and professional examination systems in the future.
A Call to Action
Reluctantly, there is still no clear advantage in becoming an AMII. Being an AMII does not appear to be of any benefit. Indeed, some within the insurance/takaful profession do not even hold the AMII in high regard. The AMII will only be valued once it becomes compulsory for those at a certain level within the profession. As some employers clearly fail to insist on their senior employees holding the insurance qualification AMII; it is time that the MII act in the interest of the insurance/takaful industry.
The Risk Based Capital (RBC) Framework for insurers which was implemented since January 01, 2009 really needs insurance practitioners who really appreciate the concept of risk and insurance in order to provide better alignment for regulatory capital requirements, improve the transparency of prudential buffers and allow greater flexibility for insurers to operate at different risk levels that are commensurate with risk management infrastructure and practices.
The RBC Framework requires each insurer to maintain a capital adequacy level that is commensurate with its risk profile and through it promote the rationalisation of underwriting businesses as well as augment risk management standards. Those insurance companies that are under pressure to merge with larger capitalised companies have to look for suitable suitors that could add value to their business and inject capital, which they are in dire need of to survive, failing which they might risk losing their insurance license.
Even the Malaysian Takaful Association (MTA) has submitted a feedback on the draft Risk-Based Capital Framework for the takaful industry to Bank Negara Malaysia (BNM) in order to follow suit. In ‘Takaful & Risk-Based Capital Framework for Takaful – Interview with Dato’ Haji Syed Moheeb’, published in the INSURANCE magazine, Issue 10, Oct-Dec 2011,
YBhg. Dato’ Haji Syed Moheeb Syed Kamarulzaman, CEO of Takaful Ikhlas Sdn Bhd pointed out that we cannot run away from the risk based approach and stay on for the solvency approach of yester years. The RBC is a way of measuring a company’s assets and capital to match against their liabilities. In this regard, there is no doubt that takaful operators need to have insurance knowledge as well as syariah understanding.
Without the right quality of management you cannot be successful in practising and ensuring that the highest standards of corporate governance, internal practices, regulatory compliance as well as good claims reserving practices and more effective protection structures are being maintained. And, if you do not have the right people in-house you will not get it right. The consequence will be deteriorating or poor underwriting or claims settlement standards, and poor customer service. We have to stop the practice of ‘blindly’ accepting any risk for any price for the sake of winning business or market share. Higher production and meeting business targets in gross premium written does not mean anything if the majority of the insurance/takaful business is of unprofitable risks. The bottom line is how to sustain underwriting profit. In simple terms, this underwriting profit is generated when premiums exceed claims and administrative expenses.
Therefore, insurance/takaful companies need to manage their underwriting activities appropriately. Although volume in term of gross direct premiums income is an important determinant of market share, the insurance/takaful companies have to carefully balance the types of risks that they should undertake.
“The better the quality of decision making at the point of trade, the less chance of loss and better the chance of capturing quality business, building value in the overall portfolio. Individuals who take risk need to understand not only the technical elements of a particular trade, but also the broader implications involved,” says Andrew Beazley, CEO of the Beazley Group and Active Underwriter for syndicate 623 in ‘The Talent Game’ published in Insurance Institute of London: New London Journal, Issue No. 2 Summer 2001.
Retaining Good Intellectual Capital
He further explains that risk takers need to possess both technical skills and the understanding of broader business issues to operate successfully. Talent is scarce and it is one task to find, train and nurture these individuals but quite another to keep them. Our industry has difficulty in both these areas but the most important for long term value is to retain good intellectual capital.
John Coldman, Chairman of Benfield Greig Group Plc in ‘People Matter’ published in Insurance Institute of London: New London Journal, Issue No. 2 Summer 2001 stresses the most important asset that any company has is its people. “It sounds so obvious and yet so many companies appear not to get it! In our industry, just as in any other, we pay a dear price should we fail to do so.”
Every senior insurance/takaful official needs a sound understanding of insurance principles and practice, acquired through formal education. If the Malaysian insurance/takaful industry wants to avoid the many mistakes of the past, and succeed in an increasingly competitive world, it must do something about it.
In the author’s book, professional qualifications are essential in today’s climate of increased regulation and competition but that qualification must be recognised and be appropriate to the needs of the business. In that case, every insurance/takaful company should make the AMII a precondition for promotion for all senior insurance technicians especially in underwriting and claims.
Dr Alexander Scott, Director General of the Chartered Insurance Institute (CII) in his talk given to The London Insurance Institute on 22 January 2002 published in the New London Journal, Issue No. 3 Summer 2002 highlights that investment in technical skills at the underwriting or claims level is needed to improve competence and the spine that holds up a competent underwriter is qualification. He says, “Qualification provides a foundation for continuing process of learning and development, and allows the individual to develop the blend of skills and competencies needed to become a professional practitioner.”
Hire the Right People
There is also the question of recruitment. If the profile of insurance professionals is not right, you will not attract and recruit the brightest and the best.
“One aim would be to get the industry to holistically recognise an industry wide qualification and certification standard and to reward people for their efforts in gaining the various levels of qualification,”
says Hashim Harun, Chairman of MII. He also stresses that the industry also has to struggle with another extreme where there is a demand for certain specialised expertise for instance, a professional who can handle or manage motor claims, or who has the capability to do adjusting work in a given segment. Local universities do not provide professional certification for such expertise.
It should also be encouraged that employees must hold an AMII in order to be promoted into or beyond senior management teams.
Edward E. Lawler III in his book, “Treat People Right! – How Organizations and Individuals Can Propel Each Other into a Virtuous Spiral of Success,” emphasises that the availability of qualified human capital is yet another element of the environment that must be considered. If an organisation develops a strategy but the human capital necessary to develop and maintain the right mix of core competencies and organisational capabilities is not available, the strategy is clearly dead in the water. This is why organisations need to realistically assess their environment before developing expectations about what additional human capital they can attract or retain.
He says, “One point to keep in mind is that you can attract particular kinds of human capital only if they exist. This might seem like an obvious point, but it is often overlooked.”
Therefore, the insurance/takaful industry definitely needs professionally qualified insurance/takaful personnel to take the lead. This reminds the author of an interesting letter by C. H. Warner ACII, Chartered Insurance Practitioner, which was published in CII: The Journal, November 2000. According to him, he was at a directors’ meeting some years ago when an unqualified colleague proposed that “We should recruit old Bill Bloggs to work for us.” “Why?” came a reply. “Does he know much about insurance?” “No,” the proposer said. “But he plays a good game of golf.” “Well,” said the qualified respondent, “When you need a brain operation, let me know. I’ll select the brain surgeon for you, and I’ll make sure he is a damned good golfer, even if he doesn’t know much about brain surgery.” Surely we do not want to let our Malaysian insurance/takaful industry be staffed on that basis.
Insurance/takaful would always remain a people business. The biggest problem facing the insurance/takaful sector in Malaysia lies not with computers and systems, but in its human resources. In ‘Proficiency Is Bliss’, CII: The Journal, November 1996, the argument that David Bland advanced was a simple one; how can the board of directors of an insurance company display that they – as fit and proper directors – have placed the key insurance function in fit and proper hands? The answer: By making sure that their underwriters and claims chiefs are properly qualified.
The lesson is clear: If the Malaysian insurance/takaful industry wants to avoid the many mistakes of the past, and succeed in an increasingly competitive world, it will need to further embrace professionalism, and that means AMII qualification.
Time to Improve Public Status
“Qualifications must not be seen as an option. They should be a mandatory passport to practice,” says Dr Sandy Scott, the CII Director General in ‘A Call To Action’ in CII: The Journal, September 2002.
If one were to consider seeking advice in another field, one would ask a professional. For medical advice, one asks a qualified doctor, for legal advice one asks a lawyer, and so on. Surely insurance/ takaful should be the same. After all, we always need better qualified people in the Malaysian insurance/takaful business, and we must continue to do so.
The author believes that the AMII examinations set by an accepted professional body, MII are worthwhile as an indication of one’s proficiency in his/her particular field of endeavour. Being an AMII holder means something and professionalism should carry pride with it.
So, by now if you meet an insurance/takaful professional with an AMII designation after his/her name, we hope you will recognise and appreciate his/her public status.
Otherwise, the serious work of MII and its concerted creative awareness campaigns and promotions through the normal mass media must go on yearafter-year... Well, who cares. i
Raja Ahmad Khiruddin bin Raja Hizadin is an Associate of the Malaysian Insurance Institute (AMII) and also an Affiliate Registered Financial Planner (Affiliate RFP).