In­dus­try Up­dates

Insurance - - INDUSTRY UPDATES - Di­rect Gen­eral In­surance Com­pany Of The Year In­ter­me­di­ated In­surance Com­pany Of The Year Life In­surance Com­pany Of The Year In­no­va­tion Of The Year Ser­vice Provider To The In­surance In­dus­try Of The Year Pro­fes­sional Ser­vices Firm Of The Year Young In­sur­anc


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.


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.


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 BICal­cu­la­, 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 Con­ti­nu­ 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.


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.


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.


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”.


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.

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