PIAM’S Perspective on What’s on the Horizon for 2013
Chua Seck Guan, Chairman of Persatuan Insurans Am Malaysia (PIAM) reviews some of the major industry activities and challenges that had occurred during 2012 while also sharing with us their upcoming initiatives and giving us some insights and expectations
Q: How saturated is the general insurance market in Malaysia? What should be done for further growth in this area? Amidst the global economic uncertainty and huge catastrophic losses experienced in the region in 2011, the Malaysian general insurance industry registered positive growth with gross written premium increasing by 7.85% to reach RM14.029 billion, compared with an increase of 8.56% (RM13.009 billion) in 2010. Net premiums also grew at a rate of 8.20% to reach RM9.718 billion. In the same year, the industry recorded an underwriting margin of 9.8% amounting to RM1.266 billion in 2011 compared to 10.2% amounting to RM1.053 billion in 2010. With prudent underwriting and operational procedures in place, the combined management expenses and commissions ratio of insurance companies was maintained at 29.5% in 2011, as for the year before. For the period January to June 2012, the gross written premiums grew by 8.0% to RM7.881 billion compared to RM7.297 billion for the same period in 2011. Net premiums grew to RM5.279 billion compared to RM4.965 billion in 2011. With increasingly discerning consumers and the awareness of the benefits derived from insurance, the opportunities are readily available for insurance companies to grow their businesses, coupled with a proper infrastructure and foundation in place for insurers that are ready to take on this challenge.
Q: The domestic financial institutions in Malaysia are undergoing restructuring, consolidation and rationalisation due to the effect of globalisation. Having greater scale, there is increased investment in technology and talent. How much of a problem is the shortage of qualified workers for the general insurance sector? What are the initiatives from PIAM in addressing this crucial need? The Financial Sector Blueprint which was officially launched by Bank Negara Malaysia on 21 December 2011, identified the enhancement of talent development as an area to be addressed by insurers and takaful operators. The insurance industry is multi-disciplinary and the career opportunities available in the industry are numerous. In terms of being the employer of choice, the insurance industry has always been at a disadvantage compared to the other financial services sectors. The Association had undertaken several initiatives to create awareness of the career opportunities available in the insurance industry by participating in career fairs organised by institutions of higher learning and other financial bodies. In addition, several education and training initiatives have been introduced for members to enhance their exposure to new practices and applications in the insurance markets. The Association has also formed a Young Managers’ Think Tank (YMTT) with the main