REINSURANCE RATES DROP
Source: Bloomberg, 30 December 2013 Global prices for reinsurance policies up for renewal on Jan. 1 declined amid an oversupply of capital in the industry, according to a unit of Marsh & McLennan Cos. (MMC), the world’s largest insurance broker. Rates for property-catastrophe reinsurance fell 11 per cent, driven by decreases in the U.S., according to New York-based Marsh & McLennan’s Guy Carpenter division. Prices also fell for most other types of coverage. Reinsurers such as Munich Re and Swiss Re Ltd. help providers of primary coverage such as American International Group Inc. (AIG) and Allianz SE (ALV) shoulder the costliest claims. An influx of capital from investors, strong balance sheets and lower-than-average losses from natural disasters meant that supply often outstripped demand, the Guy Carpenter report said. The industry had about U.S.$322 billion (MYR1,059 billion) in dedicated capital at the end of 2013, a nearrecord level, according to the release. Global insured losses were about U.S.$40 billion (MYR131.5 billion) in 2013, U.S.$20 billion (MYR66.75 billion) less than the 10-year average.
U.S.$1.00 = MYR3.29
MOTOR INSURANCE PREMIUMS, SERVICES TOO COSTLY
Source: Governance & Compliance Magazine, 19 Decem-
ber 2013 The Competition Commission (CC) has found that motor insurance premiums and services provided by companies are too costly. The CC aims to reduce these costs. According to CC, the chain of settlement for non-fault claims is complex and increases the cost of replacement cars and repairs, which is passed on to insurers of at-fault motorists, resulting in higher motor insurance premiums for all drivers. CC estimates the extra premium costs are between £150 million (MYR806.67 million) and £200 million (MYR1,076 million) a year. CC also found that following an accident, too many repairs are not completed to standard. Problems were also found with the sale of addon products to consumers, and with the contracts between price comparison websites and insurers. In addition, consumers have limited information about “add-on” insurance products, while insurers have a pointof-sale advantage. So it is difficult for consumers to identify the best-value offers in the market, and add-ons may be priced too high. Also, contracts between price comparison websites and insurers can require that individual insurers’ premiums are not offered more cheaply elsewhere. CC has published a notice of possible remedies outlining measures it could introduce or recommend to improve competition. Any interested party can respond to the provisional findings report by 7 February 2014.
£1.00 = MYR5.38
NATURAL CATASTROPHES, MAN-MADE DISASTERS COST INSURERS USD 44 BILLION
Source: Swiss RE Press Release, 18 December 2013 According to preliminary sigma estimates, insured losses from natural catastrophes and man-made disasters in 2013 were around USD44 billion (MYR144.65 billion), down from USD81 billion (MYR266.29 billion) in 2012. Insured losses from natural catastrophes were at least USD38 billion (MYR124.93 billion), down from USD75 billion (MYR246.75 billion), while man-made disasters generated the remaining USD6 billion (MYR19.73 billion) of insured claims. The overall economic losses from catastrophic events in 2013 reached USD130 billion (MYR427.38 billion), compared with USD196 billion (MYR644.36 billion) in 2012. The total loss of life climbed to around 25,000 in 2013 from 14,000 in 2012. In November 2013, Typhoon Haiyan hit the Philippines and claimed more than 7,000 lives, which is the highest loss of life from a single event in 2013. The flooding that affected large areas of central and Eastern Europe in June 2013 created overall losses of USD18 billion (MYR59.18 billion), with insured losses estimated at USD4 billion (MYR13.15 billion). Also in June, raininduced flooding hit Alberta, Canada,
causing insured losses of nearly USD2 billion (MYR6.58 billion), the highest ever recorded in the country for any disaster. There were also heavy rains and floods in Australia, India, China, Indonesia, Southern Africa and Argentina in 2013.
USD1.00 = MYR3.29
TALK ORGANISED TO EDUCATE YOUNG LEADERS
Source: The Star, 16 December 2013 The General Insurance Association of Malaysia (PIAM), through its Young Manager’s Think Tank (YMTT), held a breakfast talk themed, “Passion For Success” for 60 young managers from the general insurance industry. The YMTT invited Teach For Malaysia co-founder and managing director Dzameer Dzulkifli to speak. Established in 2010, Teach For Malaysia is an independent, non-profit organisation that aims to end education inequity in Malaysia. Dzameer engaged the young managers by sharing his childhood experiences, which he says contributed to his success as a young leader at Teach For Malaysia. He advised that delaying critical decisions on career paths or passions could possibly reduce one’s true potential. He also emphasised the important values of Teach For Malaysia: the sense of responsibility, excellence, collaboration and integration. In addition, Dzameer emphasised that the most effective way to implement values is to demonstrate it and practice accountability, opposed to merely preaching it to subordinates. He stressed the importance of a legacy of positive values. The talk is one out of various initiatives that address the need to collectively re-brand the general insurance industry as an attractive employer of choice and the need for proper talent management.