NZ INSURANCE INDUSTRY AWARD FINALISTS Source: ANZIIF, 14 September 2017
The Australian and New Zealand Institute of Insurance and Finance (ANZIIF) recently announced the finalists of the 2017 New Zealand Insurance Industry Awards. Now in their sixth year, the awards recognise excellence and achievement by the top performing individuals and businesses from across the industry. The finalists are: Insurance Services Brokers This year’s awards are sponsored by platinum sponsors Asteron Life, DLA Piper New Zealand, Fidelity Life, JB gold sponsor, Stelvio. With additional categories announced on the night, the awards will be held at the Skycity Convention Centre in Auckland on November 16.
GENERAL INSURANCE INDUSTRY DOWN 1.9% FIRST HALF OF 2017 Source: PIAM, 23 August 2017
The general insurance industry declined 1.9% for the first half of 2017 compared to the same period last year. Gross written premium income stood at RM9.17 billion a reduction from RM9.34 billion for the first six months of 2016. While the two dominant classes of Motor and Fire insurance grew 1.8% (RM4.2 billion) and 2.4% (RM1.8 billion), the industry was weighed down by the sharp drop of 13.2% in Marine Aviation and Transit (MAT) insurance from RM944 million to RM820 million. The depressed state of the Oil & Gas industry and a weak aviation sector were the main contributing factors to the poor MAT results. Personal Accident (PA) insurance declined 12.5% from RM696 million to RM608 million, while Medical and Health insurance (MHI) grew 7.1% with gross written premiums reaching RM628 million. The Miscellaneous class comprising Bonds, Liabilities, Engineering and Workmen’s Compensation registered a decline of 9.7% with gross written premiums of RM1.13 billion. On insurance claims, the industry continued to experience a deteriorating trend with the Net Claims Incurred Ratio increasing from 53.8% in the first six months of 2016 to 57.4% for the corresponding period in 2017. Out of this, Motor as well as Medical and Health insurance recorded the highest percentages at 71.4% (from 65%) and 71.8% (from 67.2%). Motor insurance claims paid out by insurers amounted to RM2.68 billion in the first half of 2017. On a per day basis, insurance companies paid out RM14.7 million in claims for property damage, bodily injury and vehicle theft.
Motor vehicle theft counts continue to decline. The first six months of 2017 saw a decrease of 25% in motor vehicle thefts. The total number of stolen vehicles for all classes amounted to 7,897 a reduction from 10,551 for the first half of 2016. Looking ahead PIAM expects a challenging year with the prevailing uncertainties in the business climate. Barring a robust upturn in the external environment for the second half, industry growth in 2017 is likely to stagnate.
INSURANCE TOOLS TO ASSIST WITH DETARIFFICATION Source: LMI Group, 23 August 2017
LMI Group partnered with the Malaysian Insurance Institute to identify and treat the issues arising out of the removal of the current tariff system within the industry. One of the pitfalls of the current insurance environment is there is little understood about the products, which means an insured's decision is often influenced by its base element, price. When in fact, the paramount important feature of insurance is the coverage that is afforded by the policy. Starting with BICalculator.com, a system designed to explain Business Interruption Insurance and guide the user, whether it be insurance brokers, insured or insured's accountant, through a step-by-step question set that has been tailored to a specific insurance policy with the goal and outcome being an adequate sum insured. This system has been well received globally and is now in active use in Australia, New Zealand, the US, UK and South Africa. LMI is focused its attention on a new task – how are insurance professionals to understand not only the complexities of insurance, but also the industries and risks that their customers operate within? This led to the creation of RiskCoach, a system designed to identify risks associated with 11 classes of insurance across 7,000 industries. It can be used as a training tool, containing many short courses, as well as a sales tool to explain risk and exposure to the insured. The RiskCoach system has recently been complemented by the mobile app, RiskCoach OnTheGo. It takes the content of RiskCoach and allows the user to build and send a co-branded and tailored risk report to the insured via email. While building RiskCoach, LMI realised identifying risk and risk transfer in the form of insurance only forms part of a Business Risk Management Plan. One of the missing elements was a Business Continuity Plan (BCP). The issue was that BCPs are often expensive, and as such are outside of the reach of your average SME business. This led to the creation of ContinuityCoach.com. It allows a business owner to build, test and if necessary, activate a fully compliant ISO 22301 plan at an affordable price. LMI Group and the MII hope these tools will assist the market moving forward and are planning to roll them out over the coming months.
4.7% GROWTH FOR LIFE INSURANCE IN FIRST HALF OF 2017 Source: LIAM, 22 August 2017
The life insurance industry registered a 4.7% growth in the first half of 2017 in new business weighted premium (100% of regular premiums plus 10% of single premiums). New business weighted premium hit RM2.56 billion compared to RM2.44 billion in the same period last year. Gross sum assured for all new individual policies combined, registered RM60.4 billion. The industry registered a 3.2% increase in benefit payments for death, disability, medical, bonuses and others, amounting to RM4.97 billion. In tandem with the industry’s aspiration to make life insurance products easily accessible through various distribution channels, in July, the industry introduced Direct Channel for sale of pure protection life insurance such as term insurance. Under the platform, the public can purchase life insurance online and offline. It is one of the initiatives under the Life Insurance and Family Takaful Framework issued by Bank Negara Malaysia in November 2015 to diversify distribution channels for wider outreach to consumers. The number of registered life insurance agents saw a decline of 5.2% to 77,736 agents as of 30 June 2017. The number of bank staff registered to sell life insurance experienced a slight decline of 1.9% to 18,652 bank staff as of June 30. Overall, the industry also experienced a lower rate of new agents joining the industry from 8,877 (30 June 2016) to 7,683 agents as of 30 June 2017. The above trend is reflective of the qualitative and quantitative measures imposed by the life insurance companies to improve the professionalism and productivity of intermediaries. This is in line with the industry’s vision to produce quality agents, encourage part-time agents to
become full-time, and the commitment of agents in terms of quality of service delivery.
RESPONSE TO ALLEGATIONS INSURERS GETTING A CUT FROM HOSPITALS Source: LIAM, PIAM & MTA, 14 August 2017
LIAM, PIAM and MTA confirmed none of their member insurance companies and takaful operators have requested for “cuts” from hospitals for the medical expenses incurred by their policyholders. Insurance companies and takaful operators through LIAM, PIAM and MTA had worked closely with the hospitals and third party administrators to ensure the cost of healthcare is maintained at an affordable level. In recent years, premium rate increases have been driven by high inflation in healthcare costs, which averaged 12% per annum during the period of 2010 to 2014. Going forward, this is projected to increase at a rate of 15% each year due to: services from a more affluent segment of the population.
prevalence of chronic and lifestyle diseases such as hypertension, diabetes and obesity are other factors contributing to the increase in healthcare costs. healthcare lead to an increase in the utilisation of advanced healthcare treatment technologies in medical facilities. treatments. Currently, the fees charged by doctors in private hospitals for consultation and performance of procedures are regulated under the Thirteenth Schedule of the Private Healthcare Facilities and Services Regulations. However, other components of the hospital charges such as fees for hospital stay, laboratory investigations, nursing care, use of equipment and operation room and drugs are not regulated. To manage the rising healthcare costs, there are a number of measures insurance companies and takaful operators would like to be implemented, such as: recommended retail price of pharmaceutical products, medical devices and medicines. fees for the cost of treatments. to consumers that a more detailed billing of charges can be provided upon request so that consumers are aware of the breakdown of the cost of the treatments/medicines provided to them. greater transparency in the pricing of all healthcare products and services.
FINTECH ACCELERATOR INVITES INTERNATIONAL PARTICIPATION Source: SuperCharger, 11 August 2017
SuperCharger FinTech Accelerator invites applications from international fintech start-up and scale-up companies to participate in its first accelerator in Malaysia – a free, 12week programme aimed at helping promising companies grow their businesses in Asia. SuperCharger makes the move to Malaysia with founding partner, Standard Chartered Bank, in collaboration with Allianz Malaysia and Malaysia Digital Economy Corporation. The programme provides participating companies with market entry resources, outstanding mentorship and unrivalled strategic counsel from industry experts and venture capitalists. Applicants across all verticals of fintech, including wealthtech, insurtech, payments and alternative lending, and techfin, including AI, distributed ledger and cloud-based applications, are welcome to apply. SuperCharger was first launched in Hong Kong in 2015 to discover, train and scale promising fintech companies focused on Asia. To date, 16 companies have undergone the programme. The programme will commence in Kuala Lumpur on 25 September 2017 and conclude with Demo Day in December.
PIAM'S YOUNG MANAGERS' FORUM Source: PIAM, 10 August 2017
The General Insurance Association of Malaysia (PIAM) organised its seventh Young Managers’ Forum (YMF) at Concorde Hotel Kuala Lumpur on 10 August 2017 with the theme “Leaps and Bounds”. The objective of this forum is for interaction among young executives in the industry in order to foster a cohesive spirit and to synergise the capabilities of these young talents. Graced by Yoon Yew Khuen, Director, Insurance Development Department of Bank Negara Malaysia, the 7th YMF attracted 83 representatives from the industry, comprising personnel from Underwriting, Business Development, Actuarial, Risk, and Compliance departments. In his opening speech, Zainudin Ishak, Convenor of PIAM Education/ HRD Sub-committee emphasised the waves of changes over the industry currently, from the Phased Liberalisation of the Motor and Fire Tariffs, to cyber-threats and cyber security. He added that the industry must embrace Big Data and the Internet of Things in order to move forward in the new liberalised and digital operating environment. Meanwhile Yoon, in his keynote address, highlighted the leadership challenges in the current era of technology disruption. The emergence of artificial intelligence and financial technology have been prevalent in the banking industry resulting in staff attrition. It
is now approaching the shores of the insurance industry amidst the talent crunch and skill gaps that are still dominant talent issues. Mark Lim, PIAM CEO provided an update on “Industry Performance and Market Development” and followed by Roshan Perera, Partner of NMG’s Actuarial Consulting Solutions with a Big Data presentation “Innovation, Disruption, Opportunity”. Founder of InsurTech Asia based in Singapore, George Kesselman, presented “Join the InsurTech Revolution - Resistance is Futile!”. A panel discussion titled “Braving the Storm of Data” ensued, moderated by Wan Murezani Wan Mohamad, the Chief Economist of MNRB Holdings Berhad. The panelists included Roshan, Kesselman, Insurance Services Malaysia CEO Mahendran Samiappan, Malaysian Digital Economy Corporation Sdn Bhd data scientist William Yap, and Head of Digital at AXA Affin General Insurance Malaysia Roy Siew. Among the highlights during the discussion were the impact of Big Data on the general insurance industry, challenges or common issues surrounding Big Data and how to overcome them; competitive technology-driven influencers for 2020 and beyond; existing as well as upcoming trends in insurtech. Wrapping up the event, Kelvin Siah of the Young Managers’ Think Tank updated the audience on the upcoming activities with a call for volunteers and participation from the industry.
INDONESIAN GEN Y FINANCE PROFESSIONALS LOYAL TO EMPLOYERS Source: AIF, 8 August 2017
A new study launched by the Asian Institute of Finance (AIF) reveals 76% of Gen Y professionals in the Indonesian financial services industry expect to remain with their current employer for at least 10 years or more.
This bucks the global trend where evidence suggests Gen Y employees are likely to change jobs more frequently than preceding generations. The study, Gen Y in the Workplace: a Perspective from Indonesia, aims to explore the workplace attitudes, expectations and aspirations of Gen Y finance professionals in Indonesia. More than 200 Gen Y professionals and their managers from across banking, insurance and capital market organisations in Indonesia were surveyed. Out of an active labour force of 121 million in Indonesia, it is estimated 48 million will comprise Gen Y. A clear understanding of Gen Y motivations and priorities and how they compare to current management practices, will allow employers to engage more effectively with this generation of workers. The study findings suggest there are generational differences between what Indonesian Gen Y finance professionals and their managers’ value and how they engage in the workplace. Career advancement is the most important workplace objective for Gen Y finance professionals and their managers appear to recognise this. However, managers seem unaware of the significance of remuneration as a driver for Gen Y, believing instead Gen Y professionals prioritise self-actualisation in terms of using their abilities and knowledge in the workplace. Dr Raymond Madden, CEO of AIF said, “We hope this report can provide data-driven insights on Gen Y for Indonesian financial services organisations to benchmark their talent strategies competitively”.
PIAM IN KARNIVAL KEWANGAN SABAH Source: PIAM, 7 August 2017
Bank Negara Malaysia in collaboration with the financial institutions and relevant Government ministries/agencies organised a Karnival Kewangan at Sabah Suria Mall, Kota Kinabalu from August 4 to 6. Themed “Your Financial Needs Matters”, the event aimed to elevate public’s awareness on financial services and literacy, and protection of consumers that will empower them to make informal decisions and providing them the access to financial services through a one-stop platform. PIAM jointly participated with MTA in this event with a booth that focused on Phased Liberalisation on Motor Tariff. They reached out to Sabahan consumers though games and quizzes while Isyarat, the mascot, helped to drive home the message on the importance of adopting good driving behaviour. The event was officiated by the Chief Minister of Sabah, Datuk Seri Panglima Musa Aman and Bank Negara Governor Datuk Muhammad Ibrahim, who took some time to walk around the booths.