AMII: In­surance Pro­fes­sional Recog­ni­tion

To Im­prove Pub­lic Sta­tus

Insurance - - FEATURE - by Raja Ah­mad Khirud­din

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.

Un­dewrit­ing Mat­ters!

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.”

Em­brace Pro­fes­sion­al­ism

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).

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