En route to a liberalised market

In the first phase of the liberalisation of motor and fire insurance tariffs, insurance companies are expected to progressively offer new products to the consumers and market price while existing motor third party product and motor comprehensive and motor third party fire and Theft product will continue to be made available.

In the second phase of the detarrification, starting July 1, 2017, premium rates for motor comprehensive and motor third party fire and theft product will be liberalised while for fire class insurance, will continue to be regulated under the tariff with gradual downward adjustments until a review is made in 2019.

In the final phase of the liberalisation of motor and fire insurance tariffs, BNM will evaluate the progress and impact of the phased liberalisation of the motor and fire tariff to determine the readiness of consumer and the industry for further liberalisation.

Before this final stage, BizHive Weekly asks, what changes can we expect to see?

PIAM’s Lim noted that there would be on-going preparations for this transition.

“Insurers will be moving over to a new methods of underwriting their motor and fire portfolios with more focus on risk profiles of each insured person/peril and with actuarial computations,” he added.

However, he also pointed out that insurers are ready with their resources and systems. At this stage, it is critical now for consumers to be educated properly and made aware of how these changes are going to impact them.

“Development of options available for better services like online channels will be making a bigger impact.