Malaysian Insurance Industry News

Risk-based capital is a method developed by the NAIC to measure the minimum amount of capital that an insurance company needs to support its overall business operations. Risk-based capital is used to set capital requirements considering the size and degree of risk taken by the insurer. As the current measurement stands there are four major categories of risk that must be measured to arrive at an overall risk-based capital amount. These categories are:

Asset Risk - a measure of an asset's default of principal or interest or fluctuation in market value as a result of changes in the market.

Credit Risk - a measure of the default risk on amounts that are due from policyholders, reinsurers or creditors.

Underwriting Risk - a measure of the risk that arises from under-estimating the liabilities from business already written or inadequately pricing current or prospective business.

Off-Balance Sheet Risk - a measure of risk due to excessive rates of growth, contingent liabilities or other items not reflected on the balance sheet.

Wednesday November 7, 2007

KUALA LUMPUR: MAA Holdings Bhd said Kurnia Asia Bhd has decided to withdraw from pursuing further discussions relating to the possible acquisition of its general insurance business, Malaysian Assurance Alliance Bhd (MAA), it said in a filing with Bursa Malaysia.

MAAH was granted approval from Bank Negara to commence preliminary negotiations with the shortlisted potential partners to acquire a stake in MAA.

Ten general insurers under pressure to merge

AT least 10 general insurance companies are under pressure to merge with larger capitalised companies with the risk-base capital adequacy (RBC) framework deadline drawing closer.

Industry observers said regular meetings at board levels are being held in these companies and there was mounting pressure from major shareholders to come up with effective solutions to meet the deadline for the implementation of the RBC by 2009.

The framework requires each insurer to maintain a capital adequacy level that commensurate with its risk profile.

Many of them were now looking for suitable suitors that could add value to their business and inject capital, which they were in dire need of to survive, failing which they might risk losing their insurance license, one observer said.

"Foreign insurers, namely European and Japanese, are taking advantage of the RBC and some are in discussion with their local counterparts for possible acquisitions and those who have existing stakes in local insurers are considering increasing their shareholdings.

"European and Japanese insurers who have deep pockets are also coming in to Malaysia because of the country's low insurance penetration rate and the opportunity to expand their markets in the region.

"The insurance market in Europe at the moment is quite saturated,'' a source said.

Besides having insufficient capital to undertake risks, these insurance companies also lack corporate governance, internal practices, regulatory compliance as well as poor claims reserving practices and less effective protection structures, among others, he added.

Europe's biggest insurer Allianz SE and French insurer AXA are some of the European insurers that have expanded their operations in Malaysia over the years and have expressed aninterest to acquire stakes in local insurers if the opportunity arose.

Allianz Malaysia Bhd, a unit of Allianz SE, is now in discussion with Idaman Unggul Bhd for the proposed acquisition of its subsidiary, Tahan Insurance Malaysia Bhd, expected to be completed by year-end.

Pan Global Insurance is also looking for suitable suitors at the moment.

Nippon Life Insurance Company, the largest Japanese life insurer, has also been short listed as one of the potential partners for the acquisition of a stake in Malaysian Assurance Alliance Bhd.

If Nippon Life is successful, it would be the second major entry of a Japanese insurer into Malaysia within months.

Tokio Marine & Nichido Fire Insurance Co Ltd, a unit of Japan's largest insurer Millea Holdings Inc, acquired a stake in Asia General Holdings early this year.

October 29, 2007 15:15 PM

Bank Negara: Insurers Must Implement Risk-based Capital Framework

KUALA LUMPUR,- Insurance companies must implement the risk-based capital (RBC) framework by Jan 1, 2009, Bank Negara Malaysia's deputy governor Datuk Zamani Abdul Ghani said Monday.

He said the RBC framework, aiming to create a strong risk management culture, started its parallel run in 2007 with a two-year timeframe but insurers who are ready will be allowed by the central bank to implement it next year.

"The implementation of the RBC framework will give more flexibility if the (insurance) operator is good," he told reporters at the 23rd Pacific Insurance Conference here.

The new requirement is to facilitate more efficient capital structures and provide greater investment flexibility to insurers without compromising on prudential standards.

Under the risk-based regulatory regime, responsibility for the implementation of risk management, market conduct governance and assessment of risks and management of the financial conditions of an insurer, will increasingly rest with its board of directors and senior management.

Earlier in his speech at the conference, Zamani said the insurance industry, including the takaful sector, recorded a combined premium growth of nearly 10 percent for both life and general segments to reach RM13 billion in the first half of this year.

He said the assets of life and general insurance funds registered a double-digit growth of 14 percent to RM116 billion as at end June this year, up from 11 percent in the same period last year.

"This growth momentum is expected to continue in 2008 in line with the sustained growth of the Malaysian economy," he added.

On the takaful industry, Zamani said the market penetration level remained low, with less than five percent in many Muslim countries and 6.8 percent in Malaysia, thus providing significant market potential that remained untapped.

He said strong and qualified foreign takaful companies, especially those with strong credentials, were invited to make Malaysia as their centre for retakaful activities.

On anti-money laundering and counter financing of terrorism (AML/CFT) activities, Zamani said Malaysia was ranked among the top 10 countries in terms of AML/CFT compliance in the recent Mutual Evaluation Report 2007 assessment excercise.

The AML/CFT compliance standards are set by the Financial Action Task Force on Money Laundering help to deter the Asia Pacific region from being targeted as a regional centre for money laundering and terrorism financing, he said.

General Insurance Association Of Malaysia - Persatuan Insuran Am Malaysia PIAM
http://www.piam.org.my/
3rd Floor, Wisma PIAM,150, Jalan Tun Sambanthan, 50470 Kuala Lumpur
Tel: 03 2274 7399, Fax: 03 2274 5910

Insurance Mediation Bureau
4th Floor, Wisma Harwant, 106, Jalan Tunku Abdul Rahman, 50100 Kuala Lumpur
Tel: 03 2693 9623, 03 2693 9419

Jabatan Pengawalan Insurans (Insurance Regulator), Bank Negara Malaysia
Tingkat 10, Blok C, Jln Dato' Onn, 50480 Kuala Lumpur.
Tel: 03 2698 8044, Fax: 03 2691 2990
http://www.bnm.gov.my/

Life Insurance Association of Malaysia LIAM - Persatuan Insurans Hayat Malaysia
http://www.liam.org.my/
4 Lorong Medan Tuanku Satu, Medan Tuanku, 50300 Kuala Lumpur
Tel: 03 2691 6168, 03 2691 6628, 03 2691 8068, Fax: 03 2691 7978
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

National Insurance Association of Malaysia NIAM
http://www.niam.org.my/
c/o Shamsir Jasani Grant Thornton.
Level 11-1, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur
Tel: 03 2692 4022, Fax: 03 2691 5229

The Malaysian Insurance Institute
http://www.insurance.com.my/
5 Jalan Sri Semantan Satu, Damansara Heights, 50490 Kuala Lumpur
Tel: 03 254 4234 Fax: 03 253 9468

Allianz
http://www.allianz.com.my/
Allianz General Insurance Malaysia Berhad (formerly Malaysia British Assurance Bhd)
Level 40, Menara Citibank, 165, Jalan Ampang, P.O. Box 12485, 50450 Kuala Lumpur
Tel: 03 2168 6868, 03 2715 8282, Fax: 03 2715 8212
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Allianz Life Insurance Malaysia Berhad (formerly MBA Life Assurance Berhad)
http://www.allianz.com.my/
Level 23 & 23A, Wisma UOA II, 21, Jalan Pinang, 50450 Kuala Lumpur
Tel: 03 2162 3388, Fax: 03 2162 6391
Tel: 03 2716 7694 (Customer Care Hotline)
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

American International Assurance Company Limited - AIA
http://www.aia.com.my/
Menara A.I.A., 99 Jalan Ampang, 50450 Kuala Lumpur
Tel: 03 2056 1111
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

American Home Assurance Company AHA - American International Group AIG
http://www.aha.com.my/
Wisma AIG, 99 Jalan Ampang, 50450 Kuala Lumpur
Tel: 03 2058 5000, Fax: 03 2058 5393
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

AMI Insurans Berhad
http://www.ami.com.my/
Suite 3A-15, Level 15, Block 3A, Plaza Sentral, KL Sentral, 50470 Kuala Lumpur
Tel : 03 2730 0400, Fax: 03 2730 0500

Asia Insurance (Malaysia) Berhad
http://www.asiainsurance.com.my/
Asia Insurance Building, 2 Jalan Raja Chulan, 50200 Kuala Lumpur
Tel: 03 2059 6188, Fax: 03 2072 3606

Asia Life (M) Berhad
http://www.asialife.com.my/
3rd Flr, Asia Insurance Building, 2 Jalan Raja Chulan, 50200 Kuala Lumpur
Tel: 03 2059 6188, Fax: 03 2072 3742

Aviva (formerly CGU) - See MSIG below

AXA Insurance
http://www.axa-insurance.com.my/
AXA Affin Assurance Berhad
Level 28, Menara Dayabumi, Jalan Sultan Hishamuddin, 50050 Kuala Lumpur
Tel: 03 2279 8282, Fax: 032711 1225
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Berjaya General Insurance Bhd - BGI
http://www.bgi.com.my/
18th Floor, Menara BGI Plaza Berjaya, 12 Jalan Imbi 55100 Kuala Lumpur
Tel: 03 2141 3323, 03 2144 5477, Fax: 03 2142 4802
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Great Eastern Life Assurance (Malaysia) Berhad
http://www.gelife.com.my/ or http://www.lifeisgreat.com.my/
Menara Great Eastern, 303 Jalan Ampang 50450 Kuala Lumpur
Tel: 03 4259 8888, Fax: 03 4259 8000
Tel: 03 4259 8333 (Customer Service Careline), 03 4259 8111 (Agent Service Careline)
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Hong Leong Assurance Berhad - HLA
http://www.hla.com.my/
Level 26, Menara HLA, 3 Jalan Kia Peng, 50450 Kuala Lumpur
Tel: 03 7650 1818, Fax: 03 2713 1999
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

ING Insurance Berhad (formerly Aetna Universal)
http://www.ing.com.my/
Annex Block, Menara ING, 84 Jalan Raja Chulan, 50927 Kuala Lumpur
Tel: 03 2161 7255, Fax: 03 2161 2402
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Jerneh Insurance Berhad
http://www.jerneh.com.my/
12th Floor Wisma Jerneh, 38 Jalan Sultan Ismail, 50250 Kuala Lumpur
Tel: 03 2116 3300, Fax: 03 2142 6672
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

John Hancock Life Insurance - See Manulife below

Kurnia Insurans (Malaysia) Berhad
http://www.kurnia.com.my/
Bangunan Kurnia, 32, Jalan Yap Ah Shak, 50300 Kuala Lumpur
Tel: 03 2698 9333, Fax: 03 2698 9933
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Lonpac Insurance Bhd
http://www.lonpac.com/
7th, 21st - 23rd Floor, Bangunan Public Bank, 6, Jalan Sultan Sulaiman, 50000 Kuala Lumpur
Tel: 03 2070 0455, Fax: 03 2715 0696

Malaysian Assurance Alliance Berhad (MAA)
http://www.maa.com.my/
23rd Floor, Menara MAA, 12 Jalan Dewan Bahasa, 50460 Kuala Lumpur
Tel: 03 2146 8000 Fax: 03 2142 5863
Where & how? Getting there: Map | Directions | MyCen Location (what's this?)

Malaysia National Insurance Berhad (MNI)
http://www.mni.com.my/
Level 26, Tower 1, MNI Twins, 11 Jalan Pinang, 50450 Kuala Lumpur
Tel: 03 2176 9000, Fax: 03 2176 9090
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Malaysian National Reinsurance Berhad (Malaysian Re)
http://www.malaysian-re.com.my/
12th Floor, Bangunan Malaysian Re, 17 Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur
Tel: 03 2093 5000, Fax: 03 2093 7000
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Manulife Insurance Berhad (formerly known as John Hancock Life Insurance)
http://www.manulife.com.my/
12th Floor, Menara Manulife RB, Jalan Gelenggang, Damansara Heights, 50490 Kuala Lumpur
Tel: 03 2719 9228, Fax: 03 2094 0972
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Mayban General Assurance Berhad
http://www.maybangen.com.my/
Mayban Assurance Tower, Dataran Maybank, 1, Jalan Maarof, 59000 Kuala Lumpur
Tel: 03 2297 2888, Fax: 03 2297 2828

Mayban Life Assurance Berhad
http://www.maybanlife.com.my/
Mayban Life Tower, Dataran Maybank, No. 1, Jalan Maarof, 59000 Kuala Lumpur
Tel: 03 2297 1888, Fax: 03 2297 1800

MCIS-Zurich Insurance Berhad
http://www.mciszurich.com.my/
Wisma MCIS-Zurich, Jln Barat, 46200 Petaling Jaya
Tel: 03 7955 2577, Fax: 03 7957 4780

MSIG - Mitsui Sumitomo Insurance (Malaysia) Bhd - Merger of Mitsui Sumitomo & Aviva
http://www.msig.com.my/
Level 22, Menara Weld, 76, Jalan Raja Chulan, 50200 Kuala Lumpur
Tel: 03 2050 8228, Fax: 03 2026 8086
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

MUI Continental Insurance Bhd
16th Floor, MUI Plaza, Jalan P.Ramlee, 50250 Kuala Lumpur
Tel: 03 243 9226, Fax: 03 243 9227
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Multi-Purpose Insurans Berhad
http://www.mpib.com.my/
9th Floor, Menara Multi-Purpose, Capital Square, 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur
Tel: 03 2691 9888, Fax: 03 2694 5758
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Oriental Capital Assurance Berhad
Bangunan Oriental Capital, 36 Jalan Ampang, 50450 Kuala Lumpur
Tel: 03 2070 2828, Fax: 03 2072 4150
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Overseas Assurance Corporation (Malaysia) Berhad (OAC)
http://www.oac.com.my/
Level 18, Menara Great Eastern, 303 Jalan Ampang, 50450 Kuala Lumpur
Tel: 03 4259 7888, Fax: 03 4813 2737
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Pacific Insurance Berhad
http://www.pacificinsurance.com.my/
Level 6, Menara Prudential, 10 Jalan Sultan Ismail, 50250, Kuala Lumpur
Tel: 03 2176 1188, Fax: 03 2070 1881
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Pacific & Orient Insurance Company Berhad
11th Floor, Wisma Bumi Raya, 10, Jalan Raja Laut, P O Box 10953, 50730 Kuala Lumpur.
http://www.pacific-orient.com/
Tel: 03 2698 5033, Fax: 03 2694 4209
Where & how? Getting there: Map | Directions | MyCen Location (what's this?)

PanGlobal Insurance Bhd
http://www.pgi.com.my/
Level 12B, Menara Pan Global, 8 Lorong P. Ramlee, 50250 Kuala Lumpur
Tel: 1 800 88 1111, 03 2078 2090, Fax: 03 2026 7936
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

People's Insurance Company (M) Bhd
http://www.picm.com.my/
Wisma PICM, 17-21 Jln Medan Tuanku Satu, Medan Tuanku, 50300 Kuala Lumpur
Tel: 03 2698 4411, Fax: 03 2691 0508
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Progressive Insurance Berhad
http://www.progressive-ins.com.my/
9th & 10th Floors, Plaza Berjaya, 12 Jalan Imbi, 55100 Kuala Lumpur
Tel: 03 2141 0044, Fax: 03 2144 4528
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

Prudential Assurance Malaysia Berhad
http://www.prudential.com.my/
Level 17, Menara Prudential, Jalan Sultan Ismail, 50250 Kuala Lumpur
Tel: 03 2031 8228, Fax: 03 2032 3939
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's this?)

RHB Insurance Berhad
http://www.rhbinsurance.com.my/
Level 8, Tower One, RHB Centre, Jalan Tun Razak, 50400 Kuala Lumpur
Tel: 03 9281 2731, Fax: 03 9281 2729
Where & how? Getting there: MyCen Map | Directions | MyCen Location (what's t

KUALA LUMPUR: Kurnia Asia Bhd's net profit for its financial year ended June 30, 2007 (FY07) tumbled 96.2% to RM1.14 million from RM29.81 million weighted by a net loss of RM92.25 million for its fourth quarter (4Q07) mainly due to depressed underwriting results.

In a filing with Bursa Malaysia here yesterday, it said the drop was mainly due to the depressed underwriting results, despite a strong investment performance achieved during the year. Under its overall adverse underwriting experience for the year, Kurnia said gross premium income grew slightly by 0.6% to RM1.11 billion from RM1.1 billion a year earlier.

"The slow growth was mainly impacted by the slower vehicle sales and drop in vehicle market values caused by the implementation of the National Automotive Policy (NAP)," it said.

It added that claims expense increased by 13.6% or RM105.07 million year-on-year to RM877.06 million from RM771.99 million, while claims ratio weakened partly due to lower earned premium base recorded for the current year.

"The higher claims expense was mainly due to the group's adoption of higher provisioning of total outstanding claims reserves compared to the preceding year's in preparation for the implementation of risk-based capital framework for insurers, which will take effect from January 2009," it said.

Its revenue for FY07 rose 1.5% to RM1.18 billion from RM1.16 billion in FY06. Basic earnings per share dropped to 0.08 sen from 1.99 sen last year.

For its 4Q07, its revenue increased by 7.55% to RM318.65 million from RM296.27 million last year while its loss per share stood at 6.15 sen.

Going forward, Kurnia said it would continue its efforts on the implementation of various existing management initiatives as well as new initiatives to re-strategise its business model and control costs.

"In response to the challenging market environment, the group has implemented a new organisation structure to enhance and streamline its operation by functions. The new structure is designed to support the corporate transformation programme the group is undertaking currently," it said in a statement here yesterday.

It said the transformation programme was having an initial focus on two core functions of its business - claims management and agency management.

"The programme projects, which aim at reducing claims leakages, enhancing claims processes and service, improving the production and profitability of agents, is expected to generate substantial savings and boost the group's bottom line over the near-to-medium term," it said.

It added that it also planned to deploy a two-pronged push-and-pull strategy by stepping up the development of products according to customers' demand and expectation, and at the same time, enhancing customer relationship management to create a sought-after brand in insurance.

"The group is also optimistic of better prospects in the coming financial year with improving motor vehicle sales and premium loading on third party and high-risk policies," it said.

October 26 2007

THE Malaysian Association of General Insurance Agents (Perwakim) has asked the government to increase members' commission rate by five per cent as it has remained stagnant for the last 15 years.

Perwakim deputy president Athi Rao said the revision is necessary as the rate had been lowered from 40 per cent to 25 per cent and down to the current 10 per cent 15 years ago.

"Operational costs have risen, such as in rentals, staff wages and Internet charges, but despite this we are only seeking a five per cent increase," he said after Deputy Minister in the Prime Minister's Department Datuk M. Kayveas opened Perwakim's annual general meeting.

Rao said that because of the low commission rate, there is less interest among the younger generation to venture into the general insurance business.

"Imagine that for a RM50,OOO policy, the commission is only RM5,000, from which the agent has to pay 50 per cent for administrative costs and only RM2,500 is the net income," he contended.

According to Rao, Universiti Teknologi Malaysia (UTM) is helping Perwakim conduct a study on the matter which, when completed in mid-December, will be submitted to Prime Minister Datuk Seri Abdullah Ahmad Badawi. - Bernama

KUALA LUMPUR: Insurance companies can start implementing the risk-based capital (RBC) framework, which will give insurers greater flexibility to manage their own risk, early next year, a Bank Negara Malaysia (BNM) official said.

The central bank had earlier given insurance companies, including re-insurers, a deadline until Jan 1, 2009 to comply with the framework.

All insurance companies are simultaneously testing the new framework at the moment.

"It is parallel run for now but for insurance companies that opt to go for it earlier, they can go for Jan 1, 2008," the official, who declined to be named, told reporters after the launch of the 23rd Pacific Insurance Conference here yesterday.

Zamani hitting the gong to open the conference, watched by (from right) conference general chairman Ng Lian Lu, LIAM VP Md Adnan Md Zain, organising chairman Datuk L Meyyappan and conference executive board chairman Mel Gottlieb
Others would have until the end of 2008 to implement the framework, she said. However, the official declined to comment when asked on what would happen to insurers who failed to comply by the deadline.

During a keynote address earlier, BNM deputy governor Datuk Zamani Abdul Ghani revealed some of the measures undertaken by Malaysia in response to the challenges in the insurance industry.

He said the authorities had moved away from prescriptive regulation to one that allows for a more flexible operating environment.

Insurers were now operating in an environment where regulations have become more principle-based, which places greater expectation on senior management of insurers in driving fundamental changes required within the organisation, Zamani said.

"In particular, senior management of insurers must raise the bar for the organisation to achieve best-in-class practices that are aligned with the organisation's strategic orientations, rather than merely complying with a minimum set of prescribed requirements," he added.

Zamani said a prerequisite for this transformation was that senior management acquires a thorough understanding of the relationship between various components of the insurance business and to manage these dynamics in a manner that optimises performance.

"The regulatory shift also places greater prominence on creating a strong risk management culture that is fundamental to sound insurance operations."

"In Malaysia, the transition to a risk-based capital framework and the implementation of the risk-based supervisory regime constitute important capacity-building elements of this change," he added.

Notwithstanding the move to a more principle-based regime, Zamani said it was important to have sufficient regulatory oversight to maintain financial stability and public confidence.

"It is equally important for the regulations to focus on facilitating market-led adjustments that will allow the industry to evolve in response to market developments."

"This includes putting in place mechanisms that harness market forces and discipline, to reinforce prudential regulation whilst also promoting a more efficient and responsive financial system," he said.

Zamani said there would be a regular review and reassessment of the regulatory framework as Malaysia benchmarked its regulations against leading business practices and international standards.

KUALA LUMPUR: DRB-Hicom Bhd has obtained Bank Negara Malaysia's approval to start talks with OSK Holdings Bhd on the sale of its entire stake in Uni.Asia Capital Sdn Bhd.

In an announcement to Bursa Malaysia here yesterday, DRB said the central bank, via a letter dated Oct 9, had informed the company that it "has no objection in principle'' for DRB to negotiate the sale of its 51% stake in the insurance firm to OSK Holdings.

DRB-Hicom MD Datuk Mohd Khamil
However, DRB said both parties would need to seek the Finance Minister's approval before any agreement.

Uni.Asia Capital (formerly known as Tower-Ed Sdn Bhd) is a joint venture (51:49) company between DRB and United Overseas Bank Ltd (UOB) of Singapore.

It owns Uni.Asia Life Assurance Bhd, a life insurance company served by seven branches providing online network facilities in major market centres such as Kuala Lumpur, Malacca, Ipoh, Penang, Johor Bahru, Kota Kinabalu and Kuching.

IDAMAN Unggul Bhd may announce as early as this month the disposal of its general insurance arm Tahan Insurance Malaysia Bhd and the planned sale of its timber assets, executives familiar with the matter said yesterday. A company official told Business Times that the more appropriate time for Idaman to answer the queries would be at the end of the month, declining to give further details. Idaman had previously stated that it was in talks with Allianz General Insurance Malaysia Bhd, a unit of German insurer Allianz General, to hive off Tahan Insurance. Idaman executive chairman and controlling shareholder Datuk Mohd Annuar Mohd Senawi, who is also chairman of Tahan Insurance, had said that he expects the sale to be concluded by year-end

PENANG: The conclusion of the financial services pact at the WTO and its purported benefits has been received with some scepticism here.

The Malaysian offer to allow foreign insurance companies up to 51% equity will apply to all companies, Malaysian leaders said here, in replying to queries about the reported unhappiness of the US that one of its companies, the American International Group (AIG), would have to reduce its present 100% equity in its Malaysian insurance subsidiary.

Meanwhile, an establishment Malaysian newspaper has commented sceptically on the positive claims about the agreement, stating that its results showed the sharply reduced bargaining position of Asian countries as a result of the financial crisis.

Answering questions at an ASEAN private sector conference in Kuala Lumpur on 13 December, Prime Minister, Dr Mahathir Mohamad said that Malaysia had offered foreign companies up to 51% equity in insurance ventures as the country could not afford to open the sector totally.

"We have already decided to allow an increase on foreign participation from 49 to 51% ", he said. "Other countries have agreed but the United States says we need to open up 100%. But we are firm on the matter, we can't open up any more."

Mahathir also said the decision applied to all companies.

"I have explained to many from the US that we are not strong enough to open up our financial markets," he added. "Big foreign companies and banks can afford to lose in Malaysia because they can make money elsewhere but our smaller Malaysian companies cannot afford to do so. If we do, then that is the end of us."

He remarked that the strength of foreign companies would overwhelm local companies and lead to the mergers and acquisitions of local companies. "Then, there will no longer be any more Malaysian banks and companies. Now that the Malaysian stand is accepted, all companies must conform to it."

Mahathir also commented: "We are not willing to allow 100% foreign owned banks to come here and compete with our small banks. It is not just about level playing fields. You cannot let a child of only a few years old to compete against a 250- pound American football player."

Malaysia's 51% equity policy

On 14 December, International Trade Minister, Rafidah Aziz confirmed that foreign companies have to adhere to the Malaysian policy that allows foreign financial companies to hold only up to 51% equity in local ventures.

She said: "Malaysia's offer to the WTO on foreign equity in financial and insurance ventures stands. Foreign insurance companies certainly have to comply with whatever the Finance Ministry and Bank Negara (the Central Bank) put up."

She was answering questions from reporters who asked whether the American Insurance Group, which wholly owns the American Insurance Assurance (AIA) in Malaysia, would have to adhere to the 51% equity policy.

Rafidah said that the US had agreed to the Malaysian offer of 51% foreign ownership of insurance companies and Malaysia also accepted the US counter-proposal that there will be no new (Malaysian) entrants of insurance in the US, and no branching activities of banks in the US.

[The US-Malaysia deal, about the exceptions at the WTO, seems to apply only to the insurance field - of insurers or banks branching into insurance.]

She remarked that the US conditions were "quite all right with us" because no Malaysian insurance company wanted to venture into the US, while Malaysian banks were not asking for branching activities there.

Justifying the 51% offer, Rafidah said: "We have always maintained that the capacity of developing countries' banks and insurance companies are limited and will not cause any impact on the economies of the developed countries if they opened up branches there. On the other hand, one multinational company from a developed country like the US, Europe or Japan opening up a branch in developing countries will have a significant impact."

She said there was already a very high foreign presence in both the banking and insurance sectors in Malaysia. Three quarters of the life insurance business was in the hands of foreign firms whilst the bulk of the less profitable general insurance was held by Malaysian companies.

The foreign banks also held high levels of deposits and loans.

Finance Minister, Anwar Ibrahim was also asked by reporters on 14 December, if the 51% ceiling will be imposed on all companies. He replied: "Yes, our position on 51% is for all existing companies."

When asked if US-owned insurance companies in Malaysia will have to divest, Anwar said: "Our position is that we are only committed to 51%, so we will have to study the implications vis-a-vis domestic policy. The US position is that they have expressed reservation against this specific provision. Nevertheless, domestic policy will be decided by the country's leadership."

"Malaysia has made a substantial contribution to these negotiations as it remains committed to the principle of progressive liberalization as inscribed in the WTO," he said.

He added that Malaysia was satisfied with the WTO financial services agreement, which "sent a positive signal to the financial market at this critical time, that governments remain committed to liberalization as a means to promote a sound financial system."

Meanwhile, the establishment paper, The New Straits Times in an editorial said that the WTO financial services agreement "offers the biggest hint so far of the Asian countries' sharply reduced bargaining position" because of the region's financial problems.

Noting that in 1995, Asia's emerging economies balked from opening their markets up to better-equipped foreign competitors, the editorial said that "this time, equal market access was hard-sold as a confidence-restoring measure for the badly hit Asians".

"Several developing countries barely concealed their dismay at having to buy that line in spite of their justifiable fears. International perceptions about Asia have changed, and its once high-flying economies are being made to pay needlessly, without a voice of their own... The WTO deal and the IMF programmes are claimed to be good for investor confidence. It is hard to see how they can work if these measures only succeed in shrinking the countries' economies and weakening their monetary control."

RHB Capital Bhd said it has decided not to proceed with further negotiations with other shareholders on the proposed acquisition of the remaining 20.5 per cent stake in RHB Insurance Bhd. The other shareholders are Nissay Dowa General Insurance Co Ltd and Kumpulan Syed Kechik Sdn Bhd.

THE 23rd Pacific Insurance Conference (PIC) will be held in Kuala Lumpur from October 29, aimed at developing effective strategies to elevate the insurance industry to greater heights.

MCIS Zurich Insurance Bhd, one of Malaysia's leading insurance providers, is one of the major sponsors of the three-day PIC, with the theme "New Solutions for Traditional Challenges: Winning Ideas from Industry Leaders".

The PIC is ranked as one of the world's three largest insurance conferences and provides an opportunity for local and foreign insurers to exchange information, also gives the international community a platform to have an insight into issues concerning economic growth and social progress.

The conference not only focuses on life insurance, retirement savings and wealth management, but also goes beyond traditional boundaries to cover important issues and current developments in financial services in the Asia-Pacific region through harmonisation of standards and related conformance activities.

"Progress, steady and on-going growth is important for the industry. Thus the coming together of senior executives in the field of insurance from the world-over at this conference, to give in-sights and new winning ideas to spur the industry is very encouraging and welcoming. These ideas will benefit insurance professionals, especially those within our own industry in Malaysia," MCIS Zurich chief executive Adnan Zain said in a statement.

MCIS Zurich is a composite conventional insurance provider with approximately 400,000 policyholders to date, 5,000 agency personnel and 29 branches nationwide, shareholders' fund exceeding RM220 million and total assets amounting to RM2.7 billion.

The company is a product of a merger between MCIS Insurance Bhd and Zurich Insurance (M) Bhd in July 2002.

This year's PIC is attended by approximately 330 delegates from 27 countries.

KUALA LUMPUR: ING Insurance Bhd is looking to make Malaysia its global Islamic insurance hub and has initiated talks with Bank Negara Malaysia (BNM) to produce and manage takaful products for distribution to other countries.

"We are very, very interested in takaful. We are pursuing certain opportunities that are available in the domestic market. We have spoken to BNM about how we can leverage on our global presence by being the hub for takaful," ING Insurance president and chief executive officer Dr Nirmala Menon told The Edge Financial Daily.

She said countries ING Insurance was considering for the distribution of its takaful products included those in the Middle East, China and India which have significant Muslim populations.

"We believe that there is a market, and if we can have the expertise to manufacture those products, we can have them distributed," she said.

She said having spoken to BNM, ING Insurance was now "assessing and digesting" the guidelines and necessary requirements for this initiative, adding the company was still in the early stages of its plans to enter the takaful market.

Although Nirmala could not confirm whether the company would acquire any Islamic financial institutions to strengthen its efforts into the takaful market, she said it "could be an approach".

Meanwhile, going into 2008, she said the company was changing focus towards wealth management from being traditionally life insurance driven.

"We see that Malaysia still has a large proportion of people in the middle-age bracket who are now looking at savings and return on investment type plans. We will be focusing on investment and unit-linked type products where we bundle some protection with return on investment.

"With our equity market doing quite well, we think that this is a good time to leverage on the market trends and move into that," she said.

ING Insurance would also continue driving its employee benefits, bancassurance and tied-agency businesses as engines of growth, Nirmala said.

On its bancassurance tie-ups with banks including Citibank Malaysia and RHB Bank Bhd, she said the company would strengthen and increase its contact points very soon.

"There are some very interesting things in the pipeline, and we will be making an announcement shortly," she said.

She added that the company hoped its bancassurance arm would become a significant contributor to its earnings while its tied agents would remain the biggest part of its distribution strategy.

Additionally, a key focus next year was to recruit more agents for its current 9,000-strong agency force and to provide training to create a more professional agency force which understood the needs of customers, she said.

On the outlook for the local insurance industry in 2008, Nirmala said interest was growing in savings and wealth accumulation plans and insurance agents had a role to play in educating the public on the importance of purchasing insurance plans.

PETALING JAYA: The recent investment market turmoil caused by the US subprime crisis will have limited impact on Asia Pacific insurers.

Standard & Poor's Ratings in a special teleconference last Thursday said it had a "stable" ratings outlook on the insurance sector for most of the countries in the region.

Director and team leader, Insurance Ratings, Asia, Connie Wong said thanks largely to the constraints of regulations in the region, Asia Pacific-based insurers had limited exposure to US subprime-related instruments compared with their Western counterparts.

On the sector outlook in Asia, Wong said: "We expect the sector to self-navigate through the crisis (rather than require government intervention).

"There is sufficient liquidity in the sector with a high level of industry capital."

As for Malaysia, S&P has a "stable" ratings outlook on its insurance sector.

However, Wong said the ratings agency covered only the higher capitalised insurers and the outlook did not extend to smaller players.

"We view Malaysia as one of the most sophisticated insurance markets in the Asia Pacific," she said, adding that its financial outlook was relatively stable, and insurers were well capitalised with positive operating performance.

Associate director, senior insurance analyst, Asia, Paul Clarkson said while S&P maintained its "stable" outlook for most insurance markets in the region, the exception was China which had a "positive" outlook.

However, director and team leader, Insurance Ratings, Pacific, Michael Vine added that industry risks varied from "high" to "moderately low" among different Asian markets, reflecting different levels of development in terms of insurance risk, market infrastructure and regulatory regimes.

"Furthermore, based on our enterprise resource management assessments of insurers in the region, leading companies in Australia, Hong Kong and Singapore are more likely to achieve strong assessments, while insurers from Japan, Taiwan and other Asian countries are more likely to achieve adequate assessments," he said.

Wong said while Chinese insurers were still underwriting at a lower sophistication level than regional peers, the growth potential was high.

She added that S&P also saw a growing performance gap between the top performers and weak players in the industry in region.

Consequently, consolidation in the Asia Pacific industry would eventually accelerate, she said.

PETALING JAYA: While some players in the insurance industry are scouting around for talents and others are trying to retain their existing scarce pool.

Peter Robertson
According to industry players, this scenario is due to the entry of new players, coupled with the growing economy and ongoing mergers and acquisitions in the sector.

Manulife Insurance (M) Bhd president and chief executive officer Peter Robertson told StarBiz: "There is definitely a shortage of professionals in specialist areas, such as actuarial, underwriting and product development.

"The insurance industry is growing every year and, with the emergence of takaful companies, we are all looking for high-calibre people."

Allianz General Insurance Co (M) Bhd head of human resources Mohd Parrish Abdul Hameed, in agreeing with Robertson, said there was also a shortage of marketing talent.

According to Parrish, human capital is important to the insurance industry as employees are the most valuable asset because they are the link to customers, agents, intermediaries, suppliers and the community in general.

To address the talent shortage, Robertson said the industry should first develop the skills of its internal staff to allow them to undertake different job functions as part of their career development in the company.

Second, the industry must encourage fresh graduates or school leavers to look at insurance companies as potential career options. And third, it should also look at people in other industries with related skills, albeit no insurance expertise, such as product development or account management, Parrish added.

Md Parrish Abdul Hameed
Manulife has an ongoing process to seek talent. "It may be a fresh graduate who shows potential or an experienced person who can add value to the organisation,'' he noted.

Parrish said the grooming and growing of internal talents via exchange and exposure within the group's network and resources worldwide was one of the ways to increase the talent pool.

Recruitment of young and bright graduates and giving them intensive technical training as part of a succession planning strategy is one of the other ways of overcoming the talent shortage, besides encouraging merger and acquisition exercises in Malaysia.

Asked if Allianz was looking to employ new staff at different levels, Parrish said: "We are not on a recruitment drive at the moment, but we are looking at ways to retain and sustain good talent as we do not want to lose them to competitors. In short, we want to manage and retain the right talent."

Jahanath Muthusamy
AXA Affin General Insurance Bhd president and chief executive officer Jahanath Muthusamy said the company had outlined some programmes that it hoped would attract talents and enhance its human capital. They included AXA Mobility, management trainee and executive development programmes.

Some of the talents that AXA is aiming to attract are accountants and actuaries, marine underwriters and front-end sales personnel, including quality and performing agents.

KUALA LUMPUR: Affin Holdings Bhd has obtained Bank Negara Malaysia's (BNM) approval to start discussions with CIMB Group on the sale of its unit Affin Insurance Brokers Sdn Bhd (AIB).

Affin said yesterday BNM had via a letter dated Oct 5, informed the banking group that it "has no objection" for Affin to enter into discussions with CIMB for the proposed disposal of its equity interest in AIB.

However, Affin said BNM's approval was only for it to initiate discussions and negotiations with CIMB group and should not be deemed as the final approval.

Under Section 67 of the Insurance Act 1996, BNM's approval was required before entering into any agreement to acquire or dispose of equity interest in any licensees under the Act.

"The board expects negotiations to commence soon and further announcement will be made to Bursa Malaysia Securities Bhd on any development at the appropriate time," it said.

HONG KONG: AXA-Affin Life Insurance Bhd, which plans to be among the top five insurers in Malaysia within five years, would look at acquiring other insurance firms if its bid for Malaysian Assurance Alliance Bhd (MAA) fails.

AXA Asia Pacific Holdings Ltd regional chief executive (life) Mark Pearson said the company would be looking at "all opportunities" on merger and acquisition.

"One of the things that AXA is very keen to do is to accelerate growth in Asia. Yes, we will look at opportunities as they come up."

"At the same time, it is very important for us to understand that the best way to have more opportunities is to grow our business organically as well," he told reporters at a media briefing on the AXA Life Outlook Index focusing on Asia here on Oct 4.

AXA-Affin Life will be unveiling the Malaysian perspective of the AXA Life Outlook Index in Kuala Lumpur today (Tues).

Pearson said a key part of his job was not to rely on acquisitions to deliver the company's strategy but it would still consider such opportunities as they arise. AXA-Affin Life is a 51:49 joint venture between Affin Holdings Bhd and AXA Asia Pacific.

On Sept 21, Bank Negara Malaysia had given its approval for AXA Asia Pacific and Affin Holdings Bhd to commence preliminary talks with MAA Holdings Bhd for the proposed acquisition of MAA.

In a statement to Bursa Malaysia, Affin said BNM had no objection in principle for AXA Asia Pacific and Affin to commence preliminary negotiations with MAA for the proposed acquisition of equity interest in MAA.

Meanwhile, MAA announced that it had received BNM's permission to start preliminary talks with three other parties beside AXA Asia Pacific and Affin as joint bidders.

The three other parties are Allianz Insurance Management Asia Pacific Pte Ltd, Kurnia Asia Bhd and Nippon Life Insurance Company.

Pearson said AXA Asia Pacific acquired MLC Hong Kong and MLC Indonesia from National Australia Bank Ltd for A$450 million (RM1.38 billion) and Winterthur Life Hong Kong Ltd for A$310 million last year.

"We are opportunistic when the right opportunity comes along with the right price," he said.

When asked on the price that AXA Asia Pacific and Affin were willing to pay for the stake in MAA, Pearson revealed that they were still doing due diligence on the matter.

He also said AXA, which is the second largest insurer in Europe, saw a huge potential in Asia, which contributed about 15% to its global revenue, and was willing to put more investments into the region.

On how AXA-Affin Life could face up to competition from more established insurers in Malaysia, he said: "We faced these challenges before. If you look at our business in Indonesia, we have a joint venture there with Bank Mandiri. Again, we came into the market relatively late but it has been a phenomenal success."

He highlighted that in just three to four years AXA had emerged as the top three companies in Indonesia through its partnership with Bank Mandiri, the application of its business blueprint and products.

"I guess we just have to go in and run our business the best way we know with our products, financial plans and trying to understand the customers and bancassurance models we have," he said.

KUALA LUMPUR: Syarikat Takaful Malaysia Bhd has obtained Bank Negara approval to start talks that could lead to a group of Middle Eastern and Malaysian investors emerging as strategic investors in the takaful operator.

A partnership of investors from Abu Dhabi and Malaysia intended to pump new capital into Takaful Malaysia and kickstart its business not only here but also in the Middle East, a source said.

"It will look at a strategic investment either through equity or other instruments in Takaful Malaysia," the source said.

It is reported that Takaful Malaysia might partner Middle Eastern investors as the Malaysian company pursues its growth plans, especially in the region.

Takaful Malaysia would need a stronger balance sheet if it were to be turned into a bigger Asian and Middle Eastern takaful player.

"Takaful Malaysia is the first re-takaful company in the world and that is a big attraction for the new investor," the source said.

Another attraction is the structure of its business in Malaysia, which is said to be more organised than similar takaful operations in the Middle East.

"By injecting capital into Takaful Malaysia, the firm would be brought to the next level," the source said.

Should the new investors, which are said to be led by four Abu Dhabi institutional investors, take up a strategic stake in Takaful Malaysia, it could count on being awarded a takaful licence in the United Arab Emirates, the source said.

Takaful Malaysia also has operations in Labuan through Asean Retakaful International (L) Ltd and in Indonesia via P.T Syarikat Takaful Indonesia.

The company has more than 120 branches in Malaysia.

For the year ended June 30, Takaful Malaysia posted a net profit of RM21.2mil, or 13.83 sen a share, which was substantially lower than the RM33.4mil, or 21.86 sen a share, reported in the previous financial year.

Takaful Malaysia is controlled by BIMB Holdings Bhd, which underwent a recapitalisation exercise last year that saw Dubai Financial LCC, a unit owned by Dubai Investment Group (DIG), emerging with a 40% stake in Bank Islam Malaysia Bhd, which is controlled by BIMB.

The potential deal between Takaful Malaysia and the new investors could follow the steps taken by DIG in recapitalising Bank Islam.

KUALA LUMPUR: AmAssurance Bhd has emerged as the latest suitor to acquire a stake in Malaysian Assurance Alliance Bhd (MAA). MAA's parent company MAA Holdings Bhd announced in a Bursa filing yesterday that Bank Negara Malaysia had 'no objection in principle' for MAA Holdings to commence preliminary discussions with AmAssurance as the potential buyer. Prior to this development, MAA Holdings had announced last month that Bank Negara had given it the green light to begin preliminary negotiations with four short-listed potential partners, which were keen to acquire the stake in MAA

PETALING JAYA: Salcon Bhd sees insurance as a new earnings driver in year ending Dec 31, 2008 besides its core business of water-related activities.

Independent non-executive director Ho Tet Shin said Oriental Assurance Bhd, which Salcon was buying, was likely to contribute about 30% of earnings next year with the water business providing the rest.

He told reporters yesterday after Salcon secured shareholders' approval in an EGM to buy 74% stake of Oriental Assurance and a subsequent mandatory general offer for the remaining shares in the general insurance company.

The acquisition, which should be completed by February, will be Salcon's first foray into the insurance sector.

Salcon is presently involved in turnkey design and construction, operation and maintenance of water and wastewater treatment plant and related facilities.

From left: Salcon Bhd CEO How See Hock, executive director Jaggit Singh a/l Tara Singh, chairman Datuk Seri Goh Eng Toon and independent non-executive Ho Tet Shin after the company EGM on Wednesday.
Chairman Datuk Seri Goh Eng Toon said Oriental Assurance would provide a consistent recurring income to the group, as construction was a cyclical business.

"The insurance industry is regulated and has limited players. Hence, marketing and capital management are very important. That's what we believe we have," he said, adding that the group had already identified a suitable candidate to head the insurance unit.

The insurer was a profitable entity up until last year when it had to make provisions for a special reconciliation exercise as well as adopting an accounting policy to recognise provisional reinstatement premium.

Meanwhile, chief operating officer How See Hock said Salcon had some RM650mil worth of unbilled sales for its construction order book.

It was also in advanced stage of securing three water projects in Indonesia, he said.

"We hope to seal something by year-end," How said. Additionally, Salcon has also tendered for projects worth about RM7.5bil both locally and overseas.

In August, Salcon made four announcements on the completion of feasibility studies for various water and wastewater projects in China, Indonesia and Vietnam.

So far, it has invested about RM50mil in China. How said India was the next attractive market that the company was eyeing.

KUALA LUMPUR: Affin Holdings Bhd has obtained Bank Negara Malaysia's (BNM) approval to start discussions with CIMB Group on the sale of its unit Affin Insurance Brokers Sdn Bhd (AIB).

Affin said yesterday BNM had via a letter dated Oct 5, informed the banking group that it "has no objection" for Affin to enter into discussions with CIMB for the proposed disposal of its equity interest in AIB.

However, Affin said BNM's approval was only for it to initiate discussions and negotiations with CIMB group and should not be deemed as the final approval.

Under Section 67 of the Insurance Act 1996, BNM's approval was required before entering into any agreement to acquire or dispose of equity interest in any licensees under the Act.

"The board expects negotiations to commence soon and further announcement will be made to Bursa Malaysia Securities Bhd on any development at the appropriate time," it said.

KUALA LUMPUR: MAA Holdings Bhd is planning to boost its insurance business under its subsidiary Malaysian Assurance Alliance Bhd (MAA) with the introduction of an equity strategic partner and via organic growth.

MAA Holdings chief executive officer and managing director Muhamad Umar Swift said the proposed disposal of a 49% stake in MAA would enable it to capitalise on the partner's global network, expertise, product base, efficiency and risk management.

"The completion of the proposed plan to dispose of 49% stake in MAA Assurance to a strategic partner would place the business on a strong footing as we look for synergistic benefits while unlocking the carrying value of the asset," Muhamad Umar said.

MAA is the centre of attraction as five suitors are vying to acquire a substantial stake in the company. The suitors are AXA Asia Pacific Holdings Ltd (AXA APH) and Affin Holdings Bhd, AMMB Holdings Bhd, Kurnia Asia Bhd, Allianz Insurance Management Asia Pacific Pte Ltd and Nippon Life Insurance Company.

In an email interview with The Edge Financial Daily, Muhamad Umar said the group was also looking to continue growing MAA Assurance's premium in both life and general insurance as well as improve its operational profits.

He said the targets included improving underwriting results, controlling claims, reducing management expenses and a clean-up in non-performing loans (NPLs) in the next two to three years through outsourcing or using conventional debt collection methods.

The Edge weekly has reported that MAA had incurred high NPLs from the commercial loans made out by MAA Assurance. The NPLs, to the tune of 71.7%, were from commercial loans of RM779 million made by MAA Assurance at end-2006. All the loans are fully secured.

"MAA Assurance has put in place various measures to get our market share to increase the top line, expand in our growth segments to generate underwriting margins, contain claims costs to make profits, and contain bad debts and costs, to assist our underwriting margins and provide better and more efficient services to retain and expand our sales," Muhamad Umar said.

He said the insurance company intended to focus on coverage in motor vehicles, fire, marine cargo, construction, bonds and engineering as well as teaming up with selected motorcycle dealers.

Muhamad Umar said other growth areas included workmen compensation and niche liability classes where MAA had specialised schemes for lawyers, doctors and dentists.

MAA's growth in premiums would be better balanced between motor and non-motor and would be focused more on the bottom line, as the main intention was to make good underwriting profits. He added that MAA also needed to contain the rising claim cost in the motor vehicle market.

Muhamad Umar said MAA had introduced anti-theft gadgets such as tracking devices and immobilisers in the high-end, theft-prone segment.

He also wanted customers to go to its authorised windscreen replacement centres in order to reduce claims.

He said for FY08, the group's earnings were expected to improve with new contribution from its takaful insurance business, via MAA Takaful Bhd, and expected higher contribution from its unit trust business, via MAAKL Mutual Bhd. MAA Takaful commenced operations in July 2007.

November 07, 2007

AMSTERDAM Dow Jones Newswires)--ING Group NV (ING) said Wednesday that it has reached a 10-year alliance agreement with Public Bank Berhad (Public Bank), Malaysia's second largest banking group.

This alliance will see Public Bank exclusively distributing ING 's insurance products via the bank's multiple distribution channels, including its nearly 300 national and regional branches, insurance advisors, telemarketers and to its small & medium-sized industry and corporate clients. The agreement enables both parties to cooperate throughout the entire Asia/Pacific region and initially in the markets where both parties are active.

This alliance enables ING and Public Bank to be one of the top-3 players in Malaysia's bancassurance sector over three years. ING is currently the fourth largest insurer in Malaysia.

Hans van der Noordaa, executive board member ING Group and Chairman of Insurance Asia/Pacific, said: "The formalisation of a long-term alliance with Public Bank in Malaysia marks a significant milestone for ING. Partnering with a premier banking group such as Public Bank offers ING a strong and dynamic platform for growth opportunities initially in Malaysia and Hong Kong, and later elsewhere in the region as Public Bank expands.

In addition, this alliance will also play an integral role in enhancing our multi-channel distribution capability where we are able to distribute our products via more platforms to different market segments."

ING products that will be exclusively offered to all Public Bank customers via this alliance include investment linked plans, employee benefits and credit life and traditional life products.

Company Web site:http://www.ing.com

KUALA LUMPUR, Nov 7 -- Malaysia will continue to take measures to become the world's premier Islamic financial centre and halal hub, said Prime Minister Datuk Seri Abdullah Ahmad Badawi.

He said in line with the Malaysian International Islamic Finance Centre (MIFC) initiative, Malaysia had liberalised the Islamic finance sector to encourage the participation of foreign institutions in banking, capital markets and takaful (Islamic insurance).

"The country's success in developing the Islamic financial system, which has gained international recognition, and efforts to establish a halal industry are no less important in fulfilling our `fardu kifayah' (communal obligation)," said Abdullah in his policy speech at the Umno General Assembly at the Putra World Trade Centre here Wednesday.

He said in the Islamic capital markets, Malaysia accounted for two-thirds of the world's Islamic bonds, amounting to US$47 billion.

"In addition, we have taken a leadership role in establishing institutions such as the Islamic Financial Services Board (IFSB) and the International Centre for Education in Islamic Finance (INCEIF)."

The IFSB, which has a membership of 125 countries, works to coordinate regulations and standards internationally, while INCEIF is a university-level institution that develops human capital to meet the needs of the Islamic finance sector.

Abdullah said Malaysia was also committed to becoming a world-class halal hub by actively promoting the products and services of Halal Malaysia, strengthening its Halal certification and establishing the Halal Industry Development Corporation to spearhead and coordinate the various initiatives.

"With the size of the global halal market at RM2 trillion and more than 1.8 billion Muslims in the world, Malaysians, especially the Muslims, should not miss the opportunity of venturing into this sector, he added.

KUALA LUMPUR, Nov 7 -- Public Bank Bhd expects the regional alliance with ING Asia Pacific Ltd to increase its insurance segment's contribution to the group's revenue by tenfold in Malaysia and Hong Kong over the next five years.

Its senior general manager Wong Jee Seng said currently the bank's insurance-related segment contributed 0.3 percent to its previous group's revenue of RM5 billion.

"We hope to increase it to 3 percent by end-2012. Of course, we expect the revenue to grow for the next five years so the tenfold (growth) is based on the revenue in year five," he told reporters after the signing ceremony between Public Bank and ING here today.

Wong said the 3 percent level could be quite conservative.

"I believe we can do much better ... but we set at three percent to start off as a base," he said.

He said group would always look at bringing value to shareholders either through organic growth or mergers and acquisitions.

"If they appear right, (and) good value, why not," he said.

Meanwhile, the regional alliance will see Public Bank and its affiliates distributing ING's life, health and personal accident products on an exclusive and preferred basis throughout the Asia Pacific region effective Jan 1, 2008.

KUALA LUMPUR: Allianz Malaysia Bhd sees Malaysia as a strategic market it is committed to developing and will continue to consider mergers and acquisitions (M&As) as a driver of growth, its chief executive officer Alexander Ankel said.

"We have outlined plans to continue expansion in Malaysia, and see M&A opportunities in this market as a means of accelerating our growth here," he told The Edge Financial Daily.

"M&As must be managed carefully so that they create value and not destroy it. A critical factor is of course the right selection for a compatible partner. If the right opportunity arises for us, we will pursue exploratory talks with suitable potential partners," he added.

The German insurer, Malaysia's second largest general insurance provider, completed the acquisition of Commerce Assurance Bhd (CAB) in July this year, seeing its premium income double to RM1 billion.

On its integration with CAB, Ankel said: "We are confident that the complete front and back-end integration of both companies into one organisation will be finalised within the next six to nine months, which would be a record time showing that we clearly have identified speed as a critical success factor to this process."

He said under a nationwide relocation exercise, Allianz and CAB would move its head offices under one roof and the two would integrate 17 of its branches, expected to be completed at end-2007.

Allianz has also been linked to the acquisition of general insurer, Tahan Insurance, the progression of which Ankel declined to comment on.

Meanwhile, Allianz's regional office, Allianz Insurance Management Asia Pacific Pte Ltd, was one of several companies approved by Bank Negara Malaysia to start preliminary negotiations with MAA Holdings Bhd for the acquisition of a stake in the latter's subsidiary, Malaysian Assurance Alliance Bhd.

Ankel also could not provide further comment on the issue as the process was "on its way."

The company would also remain focused on organic growth and was targeting RM1.7 billion in gross written premiums in its financial year ending Dec 31, 2008, he said.

He said Allianz planned to expand its agency force of about 8,000 agents, investing in their training and development while continuing to grow its broking and bancassurance portfolio, which included a bancassurance agreement with CIMB Bank Bhd it inherited from its integration with CAB.

Its agency channel would remain the main driver of growth for its life insurance business and the company would further develop its alternative distribution channels and increase its range of products and services, he added.

On the company's stock, which was re-listed in September after a six-year suspension for non-compliance with Bursa Malaysia's public shareholding spread requirements, Ankel said the company was "satisfied and confident" with its current share price.

"If we look at it internally (our business development) and externally (the analysts' views), it indicates a strong upward potential in this stock," he said. He added the local insurance industry would become more competitive in the year ahead.

"This will keep us and other insurance companies on our toes. The shakeout of weaker players will be more evident with the introduction of the risk based capital framework in Malaysia. Only the most efficient operators will survive and I strongly believe Allianz will be one," he said.

KUALA LUMPUR, Nov 14, 2007 (Thomson Financial via COMTEX) -- MLYNF | charts | news | PowerRating -- Shares of Malayan Banking Bhd (Maybank) were lower Wednesday after Malaysia's largest bank said its plan to buy a substantial stake in an Indonesian insurance company was rejected by the government there.

Maybank shares closed the morning session down 10 sen or 0.9 percent at 11.30 ringgit. The Kuala Lumpur Composite Index was up 1.90 points or 0.1 percent at 1,385.33.

In March, Maybank said it planned to take a 60 percent stake in PT Anugerah Life Insurance, a wholly-owned unit of Indonesian financial group PT Panin Life, hoping to tap the fast-growing consumer financial services industry there by riding on Panin's strong network.

Panin Life controls Panin Bank, one of the largest banks in Indonesia.

But Maybank said Tuesday the acquisition was rejected due to certain limitations imposed on foreign investments by the Indonesian government.

"We believe Maybank's plan to acquire 60 percent stake in PT Anugerah Life will only be delayed but not derailed as the Ministry of Finance (of Indonesia) has stated that it will review the legislation on foreign equity," said CIMB Investment Bank.

The bank has been looking for acquisition opportunities in Southeast Asia to sustain growth amid stiffer competition in the home market.

Maybank earlier said it may return excess cash to shareholders if it fails to find suitable acquisition targets.

9 November 2007

KUALA LUMPUR: Berjaya Sompo Insurance Bhd (BSompo) expects RM500mil in new premiums by year-end following the signing of a memorandum of understanding (MoU) with Persatuan Pengusaha-Pengusaha Teksi Bumiputera Malaysia (Perbumi).

Chief executive officer Patrick Loh said the MoU, which would be for a year, would see BSompo providing group insurance scheme to 25,000 Klang Valley-based taxi drivers from 50 Perbumi operators.

Patrick Loh (left) exchanging documents with Perbumi chairman Datuk Mohd Alias Abdul. With them is Entrepreneur and Cooperative Development Minister Datuk Seri Mohamed Khaled Nordin
"We already have 10 Perbumi operators covered under the scheme, and hope to cover the remaining 40 by year-end," he said after the signing ceremony yesterday.

He said the scheme, which would cost the taxi drivers just RM20 a year, included coverage for death from accidents, permanent disability, medical expenses and bereavement.

On another note, Loh said he expected a good year ahead for BSompo, a subsidiary of Berjaya Capital Bhd.

"We closed RM170mil in premiums in the first six months (May-October) of our current year ending April 30, 2008 (FY08).

"We are targeting RM310mil in total premiums for FY08 and hope to achieve 15% growth over premium income in the previous fiscal year of RM270mil,'' he added.

Loh attributed BSompo's improved earnings to strategic agency alliances, expansion of its agency forces and the introduction of new products.

This, he said, would help the company grow its current market share to more than 3% from 2.8% previously.

On Sompo Japan Insurance Inc, which purchased a 30% stake in BSompo in December 2006, Loh said the partnership allowed BSompo to leverage on Sompo's global brand and international expertise to bring business into the local unit.

28 August 2007

WE CONGRATULATE the Attorney-General Tan Sri Abdul Gani Patail for proposing that a no-fault liability scheme be implemented.

Such a scheme is long overdue. We had as far back as the late 1970s and in the early 1990s, called for the introduction of some kind of no-fault motor insurance to benefit consumers.

The idea behind no-fault insurance is to have accident victims compensated as quickly as possible.

Under no-fault it becomes irrelevant who is responsible for the accident. It assumes that accidents are by and large accidents, not intentional assaults.

Therefore, society's efforts should be aimed not at finding fault but at helping the victims. Under no-fault liability, injured accident victims will automatically be entitled to some form of compensation at the time they need it most.

At the Tun Hussein Onn Memorial Lectures in 1995, the late Tan Sri Harun Hashim, a former Supreme Court judge, spoke of the need for a no-fault liability scheme.

He suggested that the scheme be funded by a compulsory contribution which will be included as part of the driving licence fee. The contribution collected by the Road Transport Department will then be forwarded to the Social Security Organisation (Socso).

Socso will then administer the no-fault liability scheme, as it is familiar with dealing with personal injury claims, dependency claims and death claims.

As the two schemes currently provided by Socso are themselves no-fault insurance schemes, we hope that the Attorney-General will look into the suggestion that the scheme be run by Socso.

29 August 2007

PUTRAJAYA: All private sector doctors will have to be covered by insurance once amendments are made to the Medical Act 1971.

Health Minister Datuk Seri Dr Chua Soi Lek said yesterday that doctors in private practice or those working in private hospitals did not need to have indemnity insurance now, adding that only about half of them were insured.

"With the Medical Act amended and hopefully enforced by next year, it will be compulsory for private doctors to be insured," he told reporters after meeting with Association of Private Hospitals Malaysia (APHM) members.

"This is for the good of the patients. If they (doctors) are sued and the patient wins, they can be paid through insurance companies. We want them to have indemnity insurance when they practise."

Doctors in public service are covered by the ministry.

Dr Chua said there might be an issue if the patient won a case but could not be paid because the doctor had no insurance.

Asked if there were many cases where the doctors failed to pay up, he said doctors were not required to report to the ministry.

"I am sure there are. If the amount is too big, the doctor just has to declare himself a bankrupt," he said.

Dr Chua said the private hospitals had also agreed to have surgeries for the poor either at a minimum rate or for free as part of their social responsibility.

This, he said, would begin with heart procedures for babies at hospitals which have the facilities and specialisation.

He also said hotels and shopping centres were allowed to rent their premises out to individuals who wanted to conduct health screenings as long as they had approval from the ministry.

Asked about a study by the Institute for Medical Research and Universiti Kebangsaan Malaysia which found that two-thirds of 93 samples of six popular vegetables from the Selayang wholesale market were found to be contaminated with at least one kind of pesticide, he said the sampling was too small and the findings were in a preliminary stage.

He added the pesticide levels of fruits and vegetables were monitored by the ministry with large sampling.

8 September 2007

Combined premium income for the insurance industry increased 9.8% to RM13bil in the first half of the year (Jan-June 2006: 2.4%; RM11.8bil).

Combined assets grew 14.2% to RM116.3bil in the first half in line with the growth of new business.

Asset allocation remained concentrated on corporate and debt securities as well as Government securities, accounting for 64.6% of total assets.

The life insurance sector recorded strong growth, with the turnaround of new business premiums at 19.1% to RM3.8bil (Jan-June 2006: -11.4%; RM3.2bil), driven mainly by the increase in sales of investment and savings plans.

In terms of distribution channels, bancassurance tie-ups generated a higher share of 50.1% of new premiums in the first half (Jan-June 2006: 44.5%), while the market share of agency business declined to 43.7% (Jan-June 2006: 49.4%).

Market penetration of life insurance, as measured in terms of the total number of policies in force to total population, grew to 39.3% as at end-June (end-June 2006: 38.7%).

In the general insurance sector, continued moderation in the sales of motor vehicles dampened growth in motor premium income.

Gross motor premiums contracted 1.9% to RM2.1bil in the first half (Jan-June 2006: 0.8%; RM2.2bil).

However, robust growth in the offshore oil-related sector boosted the expansion in marine, aviation and transit insurance premiums, enabling the industry to cushion the decline in motor business.

The takaful industry grew strongly, with combined takaful contribution income increasing 36.2% to RM1.2bil, accounting for 8.1% of the total premiums of the insurance industry as at end-June.

In the family takaful sector, new business contributions expanded 198.8% to RM1.07bil (Jan-June 2006: -8.6%; RM358 million).

Market penetration increased to 6.8% as at end-June (end-2006: 6.6%). In the general takaful sector, motor business remained dominant, with a growth of 44.2% to RM191.8mil (Jan-June 2006: 44.2%; RM133mil).

Takaful assets increased 17.1% to RM7.6bil as at end-June and accounted for 6.2% of the total assets of the insurance industry.

Total loans outstanding of DFIs grew 8.1% to RM59.9bil as at end-June (end-2006: RM55.4bil). The increase in lending was mainly on account of higher financing for consumption credit, purchase of residential properties and the maritime and infrastructure sectors.

Consumption credit extended by Bank Rakyat and Bank Simpanan Nasional rose 11.8% to RM19.5bil as at end-June due to strong consumer demand.

Loans to the maritime and infrastructure sectors extended by Bank Pembangunan Malaysia increased to RM1.5bil and RM15.6bil respectively, mainly to finance the shipbuilding industry and utilities sector.

Lending to the agriculture sector increased 3.1% to RM3.7bil as at end-June, reflecting higher financing by Bank Pertanian Malaysia for agricultural activity such as livestock, agro-based processing, fisheries and production of fertilisers and biodiesel.

Financing for small and medium-scale enterprises (SMEs) increased further to RM14.7bil, accounting for 24.5% of total loans outstanding of the DFIs.

9 September 2007

LONDON: The Malaysian Insurance Institute (MII), a small non-profit organisation, has scooped the prestigious Professional Service Provider of the Year award, the first ever winner from Asia since the award inception 14 years ago.

Chief executive officer Khadijah Abdullah said it was a great achievement for Malaysia since it was the most contested among the 10 categories.

"For an ikan bilis (small fry) organisation from Malaysia to beat high-profile world players is all the more significant," she said after receiving the award from Informa Insurance commercial director Andrea Ward.

About 400 senior insurance and reinsurance executives attended The Review Worldwide Reinsurance Awards ceremony on Wednesday.

Khadijah Abdullah (right) receiving the award from Informa Insurance commercial director Andrea Ward in London.
Award recipients are chosen from entries worldwide and shortlisted by an executive board comprising CEOs and senior executives, before being selected by an independent panel of industry leaders.

MII bagged the award for providing the most constructive contribution to efficiency and effectiveness in the financing of insurable risk.

Khadijah said the institute was proud to be the first Asian winner in its category, which had always been won by European and American companies. "This is the most contested category as it covers a whole spectrum of professional service providers.

"We were up against more prominent international contenders such as IT consultants, investment advisers, accountants, actuaries, lawyers and risk management specialists."

Khadijah said MII had been very successful in positioning Malaysia as the centre for excellence in insurance and insurance-related training in the international scenario.

She said the award reflected the institute's credibility and capability to be the benchmark in Asean and the emerging markets.

"We plan to further strengthen our capability so that we can contribute more effectively towards enhancing the industry's professional standards," she said.

The Review editor Greg Dobie said MII's list of achievements in providing training and development to emerging markets certainly caught the attention of the judging panel.

13 November 2007

KUALA LUMPUR: All insurance companies providing healthcare facilities must register with the Health Ministry by March 31 next year.

Minister Datuk Seri Dr Chua Soi Lek said the companies should not think that they were not regulated by anyone except Bank Negara.

"Bank Negara deals with the financial regulations.

"But all health and health related matters come under the Health Ministry, including insurance companies which provide healthcare facilities," he told the press after launching Vamed's 20th anniversary celebrations here last night.

Launch: (From left) Dr Chua, Austrian Health, Family and Youth Minister Dr Andrea Kdolsky and Vamed chairman Dr Ernst Wastler at the launch of Vamed's 20th anniversary celebrations in Kuala Lumpur last night.
He said all healthcare providers were regulated under the Private Healthcare Facilities and Services Act 1998 and doctors by the Medical Act 1971.

"This is a warning. If they do not comply, they can be fined up to RM500,000.

"Hospitals that provide healthcare to patients through such insurance schemes must also register with us, or they can be fined up to RM300,000," he said.

He added that he was "not happy" with recent cases of insurance companies that "arm- twisted doctors to not only cap their fee but reduce their charges."

It was recently reported that an insurance company had proposed a new Healthcare Service Provider Agreement, which doctors had claimed was unethical and would limit patients' access to healthcare.

The new terms included doctors not being properly reimbursed for emergency and critical care outside of office hours and a limit to the number of chargeable visits allowed for specialists in certain disciplines.

"When people are sick and go to a doctor, and they (insurance companies) put all sorts of caps on the charges ... that is not fair," he said.

11 September 2007

PETALING JAYA: Syarikat Takaful Malaysia Bhd (Takaful Malaysia) is confident its recent tie-up with Multimedia Super Corridor-status company 3i Infotech Sdn Bhd will facilitate the implementation of its risk-based capital (RBC) framework and boost revenue going forward.

Under the agreement, 3i Infotech as vendor of the award-winning Integrated Insurance Management System, PREMIA, would implement the system in three phases, with targeted full implementation by June.

Group managing director Hassan Kamil told StarBiz: "The new system will enable us to manage our capital structure more efficiently since we will be able to match the assets and liabilities to minimise mismatch of duration and cash flow risks.

"This will enable us to be more prepared when RBC is introduced. With the new system, we will be able to service customers better and offer products that meet customer requirements. We are also targeting a 25% growth in turnover for fiscal 2008."

The RBC framework for the industry is due in 2009 and focuses on insurers' capital adequacy at levels commensurate with their risk profiles.

Hassan Kamil (second from left) exchanging documents with 3i Infotech president Debneel Mukherjee after the signing ceremony. Looking on are the two companies' officials
For the financial year (FY) ended June 30, 2007, Takaful Malaysia's net profit stood at RM21.2mil on the back of RM1.1bil in revenue as against RM969.1mil in revenue and net profit of RM33.4mil in FY2006.

Hassan said with about RM40mil invested in PREMIA, Takaful Malaysia planned to have the most efficient system in the takaful industry with full integration with the back-end system for management reporting and customer management.

The implementation of the new system was one of many steps taken by the company this year to enhance the efficacy of its business operations and better serve customers, he noted.

Hassan said PREMIA had twice won the Asia Insurance Industry awards and was chosen partly due to its well known proven capabilities to support demanding takaful operations and rapid business growth.

The system's flexible design coupled with use of built-in sophisticated software tools would enable the company to develop and launch new insurance products faster, considerably reducing time to market, he said.

Takaful Malaysia is one of the oldest and largest takaful operators in the world, with over 120 branches in Malaysia alone.

The company offers over 100 different insurance products across family takaful, general takaful and health insurance.

9 September

KUALA LUMPUR: Berjaya Sompo Insurance Bhd (Berjaya) expects RM500mil in premium sales by year-end following the signing of a Memorandum of Understanding (MoU) with Persatuan Pengusaha-Pengusaha Teksi Bumiputera Malaysia (Perbumi).

Berjaya chief executive officer Patrick Loh said that the MoU, which would run for a year, would see Berjaya providing a group insurance scheme to 25,000 Klang Valley-based taxi drivers from 50 operators within Perbumi.

"We already have 10 Perbumi operators covered under the scheme, and hope to cover the remaining 40 by year-end," he said after the MoU signing ceremony on Friday.

Loh said that the scheme, which would cost the taxi drivers just RM20 a year, included coverage for death from accidents, permanent disability, medical expenses and bereavement.

Loh also said that he expected a good year ahead for Berjaya.

"We have already closed RM170mil in premiums in the first six months (May-Oct) of our current financial year (ending April 30 2008)."

"We are targeting RM310mil in premiums by year-end and hope to achieve 15% growth compared to our previous financial year where we registered RM270mil in premium income," he added.

Loh attributed the group's improved earnings to strategic agency alliances, expansion of its agency forces and the introduction of new products.

He also said that this would help the group to grow its current market share of 2.8% to more than 3%.

9 November 2007
KUALA LUMPUR: Bumiputra-Commerce Holdings Bhd said Bank Negara has no objection for CIMB Group Sdn Bhd to enter into discussions with Rubber Industry Smallholders' Development Authority (Risda) for the proposed acquisition of the entire equity interest in Protac Insurance Brokers Sdn Bhd.

The approval is only for CIMB Group to initiate discussions and negotiations with Risda and should not be deemed as the final approval.

The CIMB group is required to obtain Bank Negara's prior approval before entering into any agreement.

03 August 2007

JOHOR BARU: The Malaysian Association of Tour and Travel Agents (Matta) has proposed that travel insurance be based on the Hong Kong and Australia model.

Its president Ngiam Foon said that the association is studying both models with the Tourism Ministry so that it could be included in the revised Tourism Act.

The travel insurance will pay out compensation to tourists should a tour agent default on providing the holiday.

"Right now we have the Matta Medi Evac Insurance, which covers medical expenses as well as reimburses air tickets or tour arrangements.

"But it does not cover domestic tours and those sold by agents out of Malaysia," he said.

Ngiam said the Tourism Ministry and Matta wanted to come out with a more comprehensive plan to protect tourists.

"Hong Kong and Australia have a similar experience with what we are facing. Of course their (problems) were on a much bigger scale, but why not take their models and modify them according to our needs?" he said at the Johor Matta Fair on Friday.

29 October 2007

KUALA LUMPUR: Bank Negara's deputy governor Datuk Zamani Abdul Ghani said the insurance industry, including the takaful sector, recorded a combined premium growth of nearly 10% for both life and general segments to reach RM13 billion in the first half of this year.

Speaking at the 23rd Pacific Insurance Conference here on Monday he said the assets of life and general insurance funds registered double digit growth of 14% percent to RM116 billion as at end June this year, up from 11 percent in the same period last year.

This growth was expected to continue in 2008, he added

03 August 2007

PETALING JAYA: MAA Holdings Bhd chief executive officer and group managing director Muhamad Umar Swift is acting CEO of the company's insurance arm, Malaysian Assurance Alliance Bhd (MAA Assurance), pending an official announcement.

According to sources, a formal announcement of his appointment had yet to be made public although the board had recently agreed to his appointment as head of the insurance operations of MAA Assurance.

It is still not known whether Umar would permanently helm MAA Assurance and keep his existing positions at MAA Holdings at the same time.

Sources said Umar would be visiting MAA Assurance branches and agents nationwide to look at ways to motivate and beef up the company's insurance operations.

He is expected to fill the vacuum left by Datuk Ramlan Abdul Rashid, who recently resigned as CEO after serving the company for 22 years.

A source said his appointment as acting CEO would strengthen the group's insurance operations, as Umar was an experienced ex-banker and a person who had vision for the group.

He was appointed CEO and group managing director of MAA Holdings on Sept 7 last year.

He was previously head of enterprise financial services at Malayan Banking group as well as CEO of Gas Malaysia Sdn Bhd.

Umar joined MAA Holdings on May 13, 2006, as deputy chief executive officer.

He has a bachelor of economics degree from Monash University, Australia, and more than 15 years' experience in banking and financial services.

Kuala Lumpur, next year, the Employees Provident Fund will allow contributors to withdraw money to buy critical illness insurance.

It will ensure that they will receive some financial assistance should they suffer from a life-threatening disease in later life.

This is a far-sighted move even though it will be another drain on their retirement fund. However, the possibility of getting a serious sickness is greater, and it is good that the EPF is providing this financial cushion should this happen.

But those interested in such a scheme should also be informed that it is not another insurance policy, such as life or education. In an endowment policy, which can mature in 10 to 20 years or longer, the assured would be able to get the sum insured plus interest.

Life insurance therefore is a form of savings and financial protection for the family should its main breadwinner die of natural causes or in an accident. Since we do not know how long we will live, it is prudent that everyone should have one life policy for the worker.

But critical illness insurance is different from a life policy. Those interested would have to pay premiums like other insurance buyers. However, the insured will not get any refund at the end of the day.

The scheme is therefore similar to that of personal accident or general insurance, whereby the insured will not be paid any money when the policy expires. They will be paid only if there is a claim.

At present, many insurance companies are offering this product because more people are suffering from chronic illnesses; about 30 are on the list identified by the medical profession.

The amount to be insured can range from RM10,000 to millions. Should an insured be medically certified as suffering from the disease, the insurance would pay him the insured amount in one lump sum. The individual will then have to meet all the medical expenses for his illness.

If the money is sufficient to meet his treatment, then he is fortunate, or else he will have to pay for all future bills on his own. This is a one-off deal where the insurance company is concerned.

But those interested in such a policy need not keep on paying to keep it going. Usually, they have to pay premiums until 55 and will be covered until 70.

The premium will depend on the age of the insured and the payment period. Of course, it will be cheaper if purchasers should be in their 30s than in their 40s.

Therefore, those interested in this scheme should start as early as possible since they will be paying less in premiums than those in the older group.

Under the EPF scheme, members can only purchase critical illness insurance from insurers endorsed by it. Four schemes will be on offer: RM10,000, RM20,000, RM50,000 and RM100,000.

The first may be low for a critical illness but this will be dependent on the financial status of the contributor.

Naturally, the higher coverage the better, but it will mean a financial strain on them.

However, the best insurance is still one where people will take proper care of their health by adopting good eating habits, a good lifestyle and regular exercise. Prevention is always better than cure.

21 August 2007

KUALA LUMPUR: Come Sept 3, Malaysian Assurance Alliance Bhd (MAA Assurance) will provide windscreen repair services nationwide, making it the first in the industry to provide such services.

It would have 32 windscreen repair and replacement centres in the country, executive vice-president for general claims management Goh Ching On said in an interview.

He said it was providing these services to support the recently introduced Amended Endorsement 89 by the General Insurance Association of Malaysia (Piam).

Amended Endorsement 89 allows a policyholder to make windscreen repair claims and to continue to be covered without reinstatement or paying additional premium. However, there is a deduction in the sum insured equal to the repair amount claimed.

Goh added that a pilot centre was set up in Petaling Jaya in May, and prompted by growing demand for windscreen repair service, the company decided to launch it nationwide.

Goh (left) observing a worker fixing a windscreen at the repair centre at Menara MAA
"The 32 centres comprise our platinum and gold quality workshops, and this is our first phase of expansion. If we feel there is a need to further expand the number of centres to cater to strong demand, MAA Assurance will do so," he said. The company expects to attract close to RM8mil in premiums for windscreen insurance this year compared with RM6mil last year.

Goh said repairing a windscreen, as opposed to replacing it, would save time and money.

Repairing a normal spot on the windscreen takes less than an hour and costs about RM100 on average, according to Goh.

He said cracks that were less than a foot long would cost RM120 or more to repair, whereas windscreen replacement would cost between RM500 and RM10,000.

Having the windscreen repaired also allowed one to retain the original windscreen and avoid the risk of water leakage and air entry from defective workmanship, he said.

Goh said all the repair centres would provide a one-stop service to the company's motor policyholders and the repairs had a lifetime warranty.

"The insured only needs to drive the vehicle to the nearest centre for repairs and no cash is needed," he said.

"The insured is only required to fill in a simple notification form, which can be downloaded from the MAA Internet-based claims system, and to provide copies of his identification card and driving licence. This is for the repair workshop to submit to MAA Assurance to effect payment."

Goh added that the whole process would take less than an hour.

20 August 2007

IT'S all systems go for one of the country's largest and the oldest Islamic insurers, Syarikat Takaful Malaysia Bhd (STMB), with its new line-up in the senior management team.

After pumping new blood into the team, the company is now more focused and on track to maximising its shareholder value and providing value-added services to customers.

Group managing director Hassan Kamil said that when he took over as the new chief of STMB, he realised there were several weaknesses that needed to be rectified to put the company on a stronger footing in the Islamic insurance sector.

"When I was appointed to the board of BIMB Holdings Bhd (the parent company of STMB) in September 2006, I realised there were a few areas that needed to be put in order.

Hassan Kamil
"After identifying the grey areas, the board decided to make some changes. Due to my extensive experience in the industry, coupled with my actuarial background, I was asked to helm the company,'' he added.

Hassan was appointed to the present position on April 1, taking over from Md Azmi Abu Bakar.

Prior to that, he was executive director of BIMB Holdings and a non-independent and non-executive director of the company.

Hassan worked in the United States as an actuary from 1987 to 1994 before returning to Malaysia to be deputy general manager at Malaysia National Insurance.

In 1996, he joined ING Insurance Bhd (previously Aetna Universal Insurance) as senior vice-president and chief actuary. In 2004, he became deputy general manager for P.T. AIA Indonesia and later moved to BIMB Holdings.

After heading STMB, he brought a new and dynamic team to head the operations, human resource, investment, audit and information technology divisions.

According to Hassan, many former key personnel left the company because they could not adapt to the rapid changes taking shape in STMB.

"Now that we have the 'key generals' in place, we are ready to face the competition, maximise shareholder value and offer customers the best. The new team will help drive and enhance the group's business moving forward,'' he noted.

The next thing the company would do is to beef up the middle management team in all divisions. This covers, among others, operations, information technology, finance and actuarial, and he hopes to complete this exercise by year-end.

Hassan said STMB wanted to maintain its position as one of the largest takaful operators in the country.

He felt that STMB had an added advantage because of its mudharabah model as opposed to the wakalah model adopted by other players.

Under the former model, the management expenses are fully borne by the shareholders, unlike the latter where these expenses are paid by the participants. Under the wakalah model, participants tended to take a "haircut" in their contributions, he said.

The company was the first takaful operator to introduce the mudharabah model, and it is still the only one currently adopting it.

25 August 2007

KUALA LUMPUR: The implementation of mandatory insurance for foreign maids will be discussed at the next Cabinet meeting with a view to enable the premium to be paid with the levy for the maid.

Home Affairs Minister Datuk Seri Radzi Sheikh Ahmad said this would mean any maid who entered the country legally would automatically be insured.

"We want to be able to 'catch' all the maids as soon as they arrive so that they have extra protection," he said.

Two weeks ago, the Malaysian Association of Foreign Housemaids said insurance would be mandatory for maids hired through their members.

Radzi showing the book Lilin Membakar Diriduring the book's launching ceremony in Kuala Lumpur Friday. With him are (from left) Perak Mentri Besar Datuk Seri Tajol Rosli Ghazali and Datuk Yunus Rahmat, who was the adviser for the book. - Bernama
However, Radzi said it would be difficult for the association to implement it to cover every maid as not all agencies were members of the association.

He urged the association to get all the maid agencies under its umbrella, adding that his ministry would be moving towards only recognising agencies that were members.

On another matter, Radzi denied talk that several top Umno leaders did not want former prime minister Tun Dr Mahathir Mohamad to be invited to the 50th Merdeka celebrations on Aug 31.

He said it was not Umno's culture to forget anyone who had made outstanding contributions to the party and nation.

"As far as we are concerned, we will never forget our past leaders," he said, after launching a book titled Lilin Membakar Diri about Prime Minister Datuk Seri Abdullah Ahmad Badawi's father, Ahmad Badawi Abdullah Fahim, written by Dharmala N.S.

24 August 2007

KUALA LUMPUR: The implementation of mandatory insurance for foreign maids will be discussed at the next Cabinet meeting with a view of enabling the insurance premium to be paid together with the levy for the maids.

Home Affairs Minister Datuk Seri Radzi Sheikh Ahmad said this would mean any maid who entered the country legally would automatically be insured.

"We want to be able to 'catch' all the maids as soon as they arrive so that they have extra protection," he said.

He was speaking on Friday after launching a book entitled Lilin Membakar Diri about Prime Minister Datuk Seri Abdullah Ahmad Badawi's father, Ahmad Badawi Abdullah Fahim, written by Dharmala N.S.

About two weeks ago, The Malaysian Association of Foreign Housemaids said insurance would be mandatory for maids hired through their members.

However, Radzi said it would be difficult for the association to implement it so that every maid is covered due to the fact that not all agencies were members of the association.

He urged the association to get all the maid agencies under its umbrella and added that his ministry would be moving towards recognizing only agencies who are part of the association.

On the delay of court cases related to maids of abusive employers and illegals, Radzi said it was not under his ministry's jurisdiction.

He was commenting on the Indonesian embassy's call on Thursday to do more for maids after the death of a 24-year-old Indonesian maid working in Kuala Lumpur last week.

The Indonesian deputy chief of mission, AM Fachir, had said there were too many cases where Indonesians had been mistreated.

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Tuesday October 30, 2007

KUALA LUMPUR: AXA, the second largest European insurer, has put in motion key initiatives aimed at boosting human capital for its Malaysian operations in view of the current shortage of talent in the insurance industry.

Some of these initiatives include AXA Mobility, management trainee programmes and Executive Development Programme (EDP).

AXA Affin General Insurance Bhd president and CEO Jahanath Muthusamy said many insurers were now looking for talents in various areas due to the consolidation taking place in the industry, coupled with the risk-based capital adequacy framework deadline drawing closer.

"Due to these reasons, many insurance companies now need the right talent to boost their operations moving forward.

Jahanath Muthusamy
"At AXA, we have outlined some programmes that the company hope will attract talents and enhance our human capital,'' he said in an interview.

AXA Affin is a joint venture between AXA Group and Affin Holdings Bhd. French insurance giant AXA Group has a 50.5% stake, Affin Holdings has 40% and the balance is held by individual shareholders and companies.

Some of the talents which the company was aiming to attract were accountants and actuaries, marine underwriters and front-end sales personnel, including quality and performing agents.

Under the EDP, scheduled to take off next month, executives would have to undergo a pilot two-year programme to help boost their soft and technical skills as well as communication skills.

The company had identified 20 suitable candidates for the programme this year, he said.

For the management trainee programme, Jahanath said AXA would hire "the best of the breed" graduates in various fields and to hire at least three trainees a year.

To fill the vacuum for various positions in the company and regional level, the AXA Mobility programme allows staff to move throughout the region where the group has operations.

He said this was to ensure the group had constant sufficient work force and expertise regionally.

On its agency force, AXA Affin currently has 1,400 agents compared with the industry's 40,000 agents, and the agency at the moment accounts for about 55% of the company's business.

According to Jahanath, the agency side had also embarked on various initiatives to boost the productivity of agents. These include AXA's Business Partnership Programme, training, forums (agent forums with industry experts and regional speakers) and 24-hour web-based technology for motor, marine and claims.

The company's top 25 new agents' average premium income last year grew by 487% from 2005.

29 August 2007

THE General Insurance Association of Singapore (GIA) has rolled out new requirements for employment agencies selling maid insurance to employers.

Such insurance, which is compulsory for anyone who wants to employ a maid, is meant to protect the maid's welfare.

The new scheme - to boost transparency and professionalism in the insurance sales process - requires employment agencies distributing this insurance to be registered with the GIA, and have at least one staff member trained and qualified in selling the Foreign Domestic Worker (FDW) insurance.

GIA hopes that with these new rules in place, potential employers will know what type of coverage they are getting for their maids, based on the premium paid for the insurance policy.

From Nov 1, all GIA member companies will only accept FDW insurance from employment agencies that are registered as a "Trade Specific Agent" (TSA).

To be licensed as a TSA, an employment agency will need to meet certain criteria and service standards.

The TSA will need to sign an Agency Agreement with each of the insurers the agency is representing. It will also have to submit a Letter of Undertaking that the agency is only selling FDW insurance, and not other products.

The employment agency will also ensure that there is at least one staff member trained and certified to sell the insurance at its place of business.

The FDW insurance covers maids for personal accidents and injuries as well as hospitalisation expenses. - The Straits Times / Asia News Network

25 October 2007

KUALA LUMPUR: Hong Leong Assurance Bhd is targeting to sell 20,000 policies of its newly launched C+ Secure insurance product within the next two months.

Group managing director and chief executive officer Charlie E. Oropeza said the product was the first in the market that provided coverage for three stages of cancer.

"Currently, there is no policy offering continuous total protection against cancer from early up to advanced stages and we intend to be the first to introduce these added protection features with our new product," he said at the launch yesterday.

According to Oropeza, statistics revealed that one in four Malaysians could be expected to get cancer in his/her lifetime.

"Today's insurance products do not provide adequate coverage for cancer patients. There is usually only a one-time payment upon diagnosis.

From left: Charlie E. Oropeza, chief operating officer (Life division) Loh Guat Lan and general manager, agency development (Life division) Tony Goh Guan Hin at the launch of the new product yesterday
"However, the financial stress for cancer patients and their families can go beyond diagnosis. Subsequent medical expenses can increase exponentially," he added.

The C+ Secure plan provides lump sum benefits, which will be paid at all three stages of cancer - very early, early and advanced.

It would also include provision for nursing care allowance, payable in two equal payments once diagnosis is confirmed to have progressed to the advanced stage.

The policy's added advantage is whereby once cancer diagnosis is confirmed, all future premiums would be waived.

The company also signed a memorandum of understanding with the National Cancer Society of Malaysia (NCSM) yesterday to promote programmes to raise cancer awareness.

Oropeza said the company had pledged 6% of total premiums secured from C+ Secure to NCSM.

"We will be working with NCSM to organise roadshows outside the Klang Valley. We are planning three campaigns within the next two months," he added

Thursday October 25, 2007

PETALING JAYA: Salcon Bhd sees insurance as a new earnings driver in year ending Dec 31, 2008 besides its core business of water-related activities.

Independent non-executive director Ho Tet Shin said Oriental Assurance Bhd, which Salcon was buying, was likely to contribute about 30% of earnings next year with the water business providing the rest.

He told reporters yesterday after Salcon secured shareholders' approval in an EGM to buy 74% stake of Oriental Assurance and a subsequent mandatory general offer for the remaining shares in the general insurance company.

The acquisition, which should be completed by February, will be Salcon's first foray into the insurance sector.

Salcon is presently involved in turnkey design and construction, operation and maintenance of water and wastewater treatment plant and related facilities.

From left: Salcon Bhd CEO How See Hock, executive director Jaggit Singh a/l Tara Singh, chairman Datuk Seri Goh Eng Toon and independent non-executive Ho Tet Shin after the company EGM on Wednesday.
Chairman Datuk Seri Goh Eng Toon said Oriental Assurance would provide a consistent recurring income to the group, as construction was a cyclical business.

"The insurance industry is regulated and has limited players. Hence, marketing and capital management are very important. That's what we believe we have," he said, adding that the group had already identified a suitable candidate to head the insurance unit.

The insurer was a profitable entity up until last year when it had to make provisions for a special reconciliation exercise as well as adopting an accounting policy to recognise provisional reinstatement premium.

Meanwhile, chief operating officer How See Hock said Salcon had some RM650mil worth of unbilled sales for its construction order book.

It was also in advanced stage of securing three water projects in Indonesia, he said.

"We hope to seal something by year-end," How said. Additionally, Salcon has also tendered for projects worth about RM7.5bil both locally and overseas.

In August, Salcon made four announcements on the completion of feasibility studies for various water and wastewater projects in China, Indonesia and Vietnam.

So far, it has invested about RM50mil in China. How said India was the next attractive market that the company was eyeing.

22 October 2007

Royal & Sun Alliance Insurance Malaysia may be the next company the AXA group is acquiring a stake in because it is perceived as a good fit by industry observers.

With the ongoing merger and acquisitions (M&As) taking place in the insurance industry, it may not come as a surprise if the second largest European insurer decides to proceed with its plans.

Observers said the move, would to a certain extent, depend on the outcome of the group's bid for the Malaysian Assurance Alliance Bhd (MAA Assurance).

Two years ago the group had received the green light from Bank Negara to commence negotiations for a stake in the British-based insurer (Royal & Sun Alliance Insurance) but due to some reasons it had decided to defer that.

They told StarBiz now that Boustead Holdings has increased its stake to 80% in Royal & Sun Alliance, there is rekindled interest for the AXA group to gradually take a stake in the general insurer.

Boustead recently increased its stake in Royal & Sun Alliance from 35% to 80%, with Felda Marketing Sdn Bhd owning the rest. Boustead owns about 23.4% of Affin Holdings Bhd, which owns Affin Bank Bhd. It also has interests in AXA Affin General Insurance through Affin Holdings.

"Over the next three to five years, AXA's acquisitions plans are in Asia and Malaysia is one of the key markets for the group to expand its operations. The main criteria for any of the group's acquisitions strategies is that the targeted company must be "well managed".

"Royal & Sun Alliance is a well-run company and have the same business culture as AXA and is a good fit for the group's general insurance. It also will help the group garner a larger market share in the general sector and enhance its distribution channels,'' a source added.

AXA's general insurance operations are mainly in motor, property, health and marine insurance businesses and if the acquisition of Royal & Sun Alliance materialised, it would add synergy to the group and fortify its general insurance operations in Malaysia, the source added. AXA is among the leading players in terms of profitability in the general insurance business in Malaysia,.

24 october 2007

Tune Money Sdn Bhd CEO Tengku Zafrul Aziz
KUALA LUMPUR: Tune Money Sdn Bhd, which launched Malaysia's first online insurance service Tune Money Insurance last month, hopes to expand its insurance and other financial services to Indonesia, Vietnam and Thailand by June.

Chief executive officer Tengku Zafrul Aziz said the company was currently doing feasibility studies and had met the relevant regulatory authorities there but would only venture abroad after rolling out its core online financial products in the domestic market.

These products include insurance, prepaid cards and unit trusts.

"We want to be sure of the relevancy of these types of products in those countries and what the regulatory requirements needed are as well as the right partners to collaborate with.

"The company has not identified any potential partners at the moment but we see great potential for our business in these countries, partly because of their huge population as our business is very much volume-driven,'' Zafrul said in an interview.

He added that Indonesia and Vietnam, with their population of about 250 million and 90 million respectively, were huge markets to explore and tap.

On the insurance business, he said Tune Money expected to sell 100,000 policies in the next 12 months as its online products were 30% to 40% cheaper than similar products available under conventional methods in the market.

The no-frills online financial services company's Tune Money Insurance is based on takaful principles and comprises three products - personal accident, motorcyclist personal accident and home insurance, underwritten by CIMB Aviva.

Zafrul said Tune Money would be adding on other general insurance products like hospital and surgical by year-end and probably launching life insurance products by the second quarter of next year.

The company was also looking to roll out insurance products like mobile and maternity insurance in the near future.

Zafrul said it would be launching its prepaid cards next month and planned to introduce unit trusts with zero upfront sales charges types of funds upon receiving approval from the Securities Commission.

Wednesday October 10, 2007

PETALING JAYA: While mergers and acquisitions (M&As) were commonplace in major global markets, it was only in the past decade that such activities intensified in Malaysia, beginning with Government-initiated consolidation in the financial services industry.

The M&As in the banking sector have led to the creation of nine anchor banks at present and the consolidation in the insurance sector locally and globally resulted in fewer but larger players in the country.

The last union in the banking sector was sealed when Bumiputra-Commerce Holdings Bhd completed the takeover of Southern Bank Bhd for RM6.7bil in the first half of 2006.

The past 12 months have seen a number of very large M&A deals completed or nearing realisation, and in Synergy Drive Bhd's case, involving a deal size not previously seen on the Malaysian market.

Worth an estimated RM30bil, the Synergy Drive plantation mega-merger between Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd was announced last November and is expected to be completed next month.

An earlier biggie was the privatisation of Maxis Communications Bhd by parent company Binariang GSM Sdn Bhd in June.

In April, Malakoff Bhd, the country's biggest independent power producer, was taken private by tycoon Tan Sri Syed Mokhtar Al-Bukhary via MMC Corp Bhd in a RM9.3bil deal.

The Malakoff power plant in Prai
Malakoff was delisted on July 18 after completing a capital repayment exercise.

In general, privatisation is done to correct the under-pricing of a listed company, often attributed to a lack of liquidity, although this was not the case for the actively traded and widely held Maxis.

Also generating excitement in the market are de-mergers.

On Sept 28, Telekom Malaysia Bhd (TM) announced a de-merger exercise to spin off local mobile operations Celcom (M) Bhd and overseas business into a separately listed TM International Bhd (TMI).

Upon completion of the exercise in mid-2008, TMI and TM would have expected market capitalisation of RM28bil and RM12bil respectively, versus TM's current market capitalisation of RM33bil.

Just yesterday, the de-merger bandwagon saw the entry of a new member in the Tradewinds group.

Telekom Malaysia announced a demerger exercise to spin off local mobile operations Celcom (M) Bhd and overseas business into a separately listed TM International Bhd in September
In view of such developments, the question that arises is: why did these groups aggregate their businesses in the first place?

An answer is that at different times of a group's development, putting the businesses together could make sense and at a later stage splitting them up is better.

As the businesses grow, breaking them up could result in greater focus in the different businesses and in TM's case the objective is also "to improve the transparency of earnings," that is showing which division generates what earnings.

De-merger also means that management or major shareholders feel that the businesses would be valued higher by the stock market if they were apart.

The corporate exercise in the Tradewinds group is the latest but certainly not the last as there are potentially more on the horizon.

Insurer MAA Holdings Bhd said last month it had identified a large local insurer to buy a substantial stake in subsidiary Malaysian Assurance Alliance Bhd.

Meanwhile, market talk persists that DiGi.Com Bhd could merge with Time dotCom Bhd although some analysts feel this could be value destructive.

In the banking sector, interest in EON Capital Bhd (EONCap) has revived on the possibility of a sale of a controlling block in the banking group.

US private investment firm Newbridge Capital LLC had in March received Bank Negara approval to begin official talks with DRB-HICOM Bhd for its 20.2% stake in EONCap.

05 October 2007

KUALA LUMPUR: AmAssurance Bhd, in collaboration with the Transport Ministry, has launched a nationwide road safety campaign as part of its corporate social responsibility (CSR) programme.

Called "Drive Safely. We care", the two-month campaign will run till November to educate Malaysian road users on adhering to traffic rules and regulations, especially during the upcoming Hari Raya and Deepavali holidays.

"Road casualties and fatalities are on the rise, especially during the festive seasons. We (AmAssurance) are confident that with the support of the Transport Ministry, our campaign will achieve its objective," AmBank Group chairman Tan Sri Azman Hashim said at the launch yesterday.

The campaign will see AmAssurance conduct safety activities at three major PLUS Rest & Relax (R&R) venues, mainly Tapah, Gurun and Pagoh on the North-South Expressway.

Tan Sri Azman Hashim (left) and Deputy Minister of Transport 1 Datuk Douglas Uggah Embas kicking off the campaign
Among the activities is a "Road Safety Signature Pledge Campaign" whereby road users would be invited to sign on a mobile wall as a pledge to road safety.

AmAssurance is confident it would be able to get enough signatures to submit to the Malaysian book of records to verify the success of its CSR.

With the support of the Transport Ministry, AmAssurance will also be spending RM1mil to subsidise the printing of 10 million road tax discs, which will display emergency phone numbers.

Azman said while the growth of motor insurance would depend on the transport industry, there had been an increase in motor vehicle sales recently. He said he expected the volume to grow further next year.

29 September 2007

PETALING JAYA: Former chief executive officer of Marsh Insurance Brokers, Razak Shakor, is tipped to be the new chief executive officer of Mayban Fortis Holdings Bhd, the insurance arm of the country's largest lender, Malayan Banking Bhd (Maybank).

It is learnt that Razak, whose appointment is awaiting Bank Negara approval, will replace current CEO Datuk Aminuddin Md Desa, who will be promoted to a senior level at the Maybank group.

It is still unclear when Razak's appointment would be made official but it is believed to be soon. His latest position was as the managing director of Esperanza Management Advisors Sdn Bhd.

Razak graduated from ITM and has worked for multinational corporations for over 25 years, specifically in the insurance and financial services sector.

He had been with Marsh group for more than 20 years, including working assignments in London and Europe for several years.

25 September 2007

PETALING JAYA: Now that MAA Holdings Bhd (MAAH) has identified potential partners to buy a stake in its wholly-owned unit Malaysian Assurance Alliance Bhd (MAA Assurance), the question is which candidate would the company eventually tie up with and what value this partner would bring to MAA Assurance.

Industry observers said the four partners shortlisted were big insurers in their own right. Kurnia Asia Bhd, through its insurance arm Kurnia Insurans, is the country's largest motor player, with about 30% market share.

A tie-up with Kurnia would strengthen MAA Assurance's motor business but an observer said the risk of rising car theft, for example, would not make Kurnia a good fit compared with the other three.

MAAH last week announced that it had shortlisted Allianz Insurance Management Asia Pacific Pte Ltd, AXA Asia Pacific Holdings Ltd and AFFIN Holdings Bhd, Kurnia Asia Bhd and Nippon Life Insurance Company as potential buyers of its planned sale of up to 49% in MAA Assurance.

Most observers agreed that a foreign partner that could add value and put MAA Assurance on a stronger platform in terms of branding, global expertise and access to international markets would be the ideal candidate.

A fund manager said MAAH currently had overseas insurance operations in Indonesia and the Philippines but this was not enough for it to become a significant regional player.

In Indonesia, the company has a life insurance subsidiary, PT MAA Life Assurance, and a general insurance subsidiary, PT MAA General Assurance. In the Philippines, it has a general insurance associate company, MAA General Assurance Philippines Inc, and a mutual fund subsidiary, MAA Mutualife Philippines Inc.

Allianz and Nippon Life Insurance Company are among the leading insurance giants in Europe and Japan respectively and have extensive global distribution networks, the fund manager said. Nippon Life is currently Japanese biggest insurer.

MAAH CEO and group managing director Muhamad Umar Swift had in earlier reports said the acquisition by a strategic partner would benefit both parties in terms of financial and capital strength, overall branding, market synergy and shared expertise.

MAA Assurance is a leading player in the general and life insurance business. As of Dec 31, 2006, both these divisions recorded total gross premium income of close to RM1.9bil.

An observer added that MAA Assurance's tie-up with a strong foreign partner could potentially boost the company's revenue in the life and general businesses going forward.

The proposed divestment of MAAH's stake in MAA Assurance could also trigger mergers and acquisitions in the insurance industry as players needed to compete and ensure their margins are not affected in a regulated insurance market, an analyst said.

Meanwhile, Bernama quoted an Australian Associated Press (AAP) report from Melbourne which said AXA Asia Pacific Holdings Ltd and a joint venture partner Affin Holdings were at the "early stages" of the due diligence process on MAA Assurance.

"We are at the early stages of an investigatory and due diligence process," an AXA spokesman told AAP. He said the group had entered into similar discussions with around three other companies in Malaysia since late 2005 without progressing to a transaction.

MAA : [Stock Watch] [News]

21 September 2007

JOHOR BARU: The Southern Johor Small and Medium Industries Association signed a memorandum of understanding (MoU) with Ace Synergy Insurance Berhad, where the latter will offer general insurance to members of the association.

Under the agreement, ACE Insurance will assess the insurance needs of the association's 400 members and cover their risk management needs.

ACE Insurance will also provide complimentary personal accident (PA) cover to all members for the period of 12 months; this includes protection against accidental disability for up to RM50,000.

ACE Insurance chief executive officer and managing director Raj Nanra said he was happy to see the association help raise awareness on risk management among businessmen.

"SMI (Small and Medium Industries) is a fast growing industry and risk management is an important aspect to ensure the sustainability and longevity of the business," he said.

State International Trade and Industry, Energy, Water and Telecommunications committee chairman Tan Kok Hong, who witnessed the ceremony, said insurance played a vital part in business nowadays as the risks faced by businessmen are rising.

"To compete, you have to face up to the global challenge, and that means facing more risks. So it is important that you have insurance to protect yourself," he said.

15-11-2007

KUALA LUMPUR: MAA Holdings Bhd will not see Nippon Life Insurance Company emerge as an equity partner in its subsidiary Malaysian Assurance Alliance Bhd (MAA)

In a statement yesterday, MAA Holdings said Nippon had withdrawn from pursuing further discussions regarding the potential equity participation in MAA.

15-11-2007

KUALA LUMPUR: Kurnia Asia Bhd posted a 39.6% fall in net profit to RM14.35 million for its first quarter (1Q) ended Sept 30, 2007 from RM23.76 million a year ago on the back of lower underwriting surplus, despite a slightly higher revenue of RM291.43 million.

It said gross premium income grew marginally to RM266.43 million despite the challenging market environment resulting from slower vehicle sales and drop in vehicle prices caused by the National Automotive Policy (NAP).

"The sustained level of premiums were mainly attributable to a significant increase in total number of policies written, which rose by 18.9% year-on-year to 1.08 million policies," it said.

The group's total assets expanded from RM2.22 billion a year ago to RM2.24 billion Sept 30, 2007.

On its prospects this year, it expected the group's performance to remain satisfactory in the current financial year.

"Recognising the changing market and operating environment, the group will continue its efforts to implement various management initiatives to re-strategise its business model for further growth and control costs," it said.

15-11-2007

KUALA LUMPUR: HeiTech Padu Bhd's associate company, PAC Total Solutions Sdn Bhd (PTS) is in talks with four insurers to provide customised IT solutions.

PTS chief executive officer Eric Loo said two of the companies were incorporated locally while another two were based in the region. "The discussions with the regional based insurers look promising and we could land a contract in the next eight months," said Loo after a signing ceremony yesterday.

Under the agreement signed, PTS will customise the IT solutions of Tia Technology A/S to insurance companies in Malaysia and the region. Denmark-based TIA Technology's flagship product is TIA Solution which provides a complete solution for insurers from planning and marketing activities to claims handling, thus helping lower operational costs.

Loo said the new business line was set to contribute 3%-4% of HeiTech's group revenue in 2008 and RM20 million in revenue (10% of group revenue) by 2010. HeiTech reported total revenue of RM335 million for its FYE December 2006 and RM158 million in revenue as of June 30, 2007.

Asked on the target market share of TIA core solution, Loo said that judging from the current status of insurance companies in Malaysia, more than 50% were looking to change their systems, adding that some had approached PTS and indicated interest in a total solutions provider.

According to TIA chief executive officer Morten B Steiner, TIA Solutions helps insurers lower total operational costs by 20%-30% increase in efficiency as compared to companies using old systems. So far, TIA Solutions has been implemented in 45 insurance companies over 20 countries.

"Basically, TIA provides the core engine while PTS builds the platform 'company layer', customising it to the company," said Loo.

PTS at present provides a wide range of applications and solutions for insurance companies. Loo said that they wanted to create a new business direction for the company.

"But having looked at various models, we decided not to divert from our core focus which is the insurance industry so the next best thing was core solutions," said Loo.

He said that the quickest way into the market was to get into a partnership with TIA, and that PTS was fortunate to have coincided with TIA's expansion plan into Europe and Asia.

14-11-2007

KUALA LUMPUR: Malayan Banking Bhd's (Maybank) plan to acquire a 60% stake in PT Anugerah Life Insurance from PT Panin Life Tbk has hit a snag after Indonesia's Ministry of Finance (MOF) was unable to approve the application at this moment.

In an announcement to Bursa Malaysia yesterday, Maybank said the MOF attributed its decision to the limitation of its regulation requiring a foreign holding company to maintain a majority of its portfolio in insurance business should it wish to become a shareholder in a local insurance company.

However, Maybank said the MOF had also advised that a comprehensive review of the legislation relating to the insurance industry including on requirements in respect of foreign equity was being undertaken.

14-11-2007

KUALA LUMPUR: ISM Insurance Services Malaysia Bhd, a shared services company set up by the Malaysian insurance and takaful industry in 2005, has launched the country's first database system that provides market valuation for more vehicles.

ISM chairman Cliff Lee Koon Yew said: "The system will fill the void for a credible source of information on vehicle specifications and used prices in Malaysia."

The new system known as the ISM Automotive Business Intelligence System (ISM-ABI) will provide the financial services industry and automotive community in Malaysia with a credible source of vehicle market valuation data.

"Many parties stand to gain from the system with the ultimate beneficiary being the consumer by way of better price transparency in automotive related transactions," he said in a statement in conjunction with the launch here yesterday.

"Once we have successfully rolled out the service to the Malaysian market, we will leverage on our MSC status to provide similar services to our neighbours in Asia.

"We are also in discussions with automotive websites and portals in Malaysia to provide our data as the foundation for automotive related transactions," said Lee.

Bank Negara assistant governor, Muhammad bin Ibrahim, who graced the launch, said: "The implementation of this system is appropriate as financial institutions prepare to adopt the Basel II and Risk Based Capital requirements in view that the system will serve as an important tool in the assessment of automotive related risks for banks, insurers and takaful operators".

Also present at the launch was Santo Amoddio, the managing director of Australia's EurotaxGLASS'S, the world's leading and largest provider of automotive business intelligence.

EurotaxGLASS'S signed an agreement in April this year to partner with ISM on the development of the system for Malaysia, marking its entry point into Asia.

"In the UK, Australia and other countries which we operate, there is hardly a financial institution, car company or consumer that will not refer to our database before making a decision on buying, insuring, financing or selling their automobile.

"Over time it will be the same scenario in Malaysia. Our credibility comes from the quality of our research and disciplined approach in deriving our market values," Amoddio said.

09-11-2007

KUALA LUMPUR: Berjaya Sompo Insurance Bhd targets a record RM310 million in premiums or a 15% premium growth in financial year 2008, its chief executive officer Patrick Loh said.

He said: "In the last financial year, we achieved RM270 million in premiums. For the six months ended October this year, we have already obtained RM170 million in premiums. We are confident of exceeding the RM310 million target."

He added that Berjaya Sompo's favourable performance was partly due to its strategic alliance with Sompo Japan Insurance Inc earlier this year. Sompo has a 30% stake in Berjaya Sompo, while Berjaya Capital Bhd holds the remaining 70% stake.

The alliance had enabled Berjaya Sompo to leverage on Sompo's global brand, as the latter is the second largest insurance company in Japan with offices in Europe, the United States and the Middle East countries, he said.

However, Loh said Berjaya Sompo, which currently has 22 branches in the country, would not be expand its operations overseas at the moment, as it wanted to focus on the domestic market first.

He said: "Sompo has identified Malaysia as a potential market. Therefore, we will be focusing in the domestic market for the first three years."

"However, we are open to opportunities overseas if they arise." he told reporters after the signing of a memorandum of understanding (MoU) of a group insurance scheme between Berjaya Sompo and the Selangor and Wilayah Persekutuan Taxi Owners and Operators Association.

The scheme would benefit 50 taxi operating companies, with a total of 25,000 taxi drivers, in the Klang Valley by offering them personal accident and death insurance coverage of up to RM51,700.

Loh said 10 taxi operator companies have taken up the scheme, while the remaining 40 were expected to participate in the initiative within the next year.

Additionally, the general insurer is also targeting to increase is market share from 2.8% to 3% next year by expanding its agency and branch network in the country.

Loh said: "We opened an additional six branches last year, and we want to open at least two new branches in the main towns of East and West Malaysia annually."

He added that Berjaya Sompo was planning to grow its agency network by up to 10% each year.

02-11-2007:

KUALA LUMPUR: RHB Capital Bhd has terminated its negotiations with Nissay Dowa General Insurance Co Ltd and Kumpulan Syed Kechik Sdn Bhd to acquire the remaining 20.5% stake that it does not already own in RHB Insurance Bhd.

In a statement to Bursa Malaysia yesterday, RHB Capital said it had decided not to proceed with further negotiations with Nissay Dowa and Kumpulan Syed Kechik at this juncture.

While RHB Capital holds 79.5% stake in RHB Insurance, Nissay Dowa and Kumpulan Syed Kechik hold 15.2% and 5.3% respectively.

RHB Capital started negotiations with the two other shareholders after receiving an approval from Bank Negara Malaysia on April 18, 2007.

In another statement, RHB Capital also said it was not pursuing negotiations with Kuwait Finance House (Malaysia) Bhd for the disposal of RHB Bank Bhd's branches, assets and liabilities at the present time.

On Aug 16, the company announced that it had obtained the approval in principle from Bank Negara to commence negotiations with Kuwait Finance House.

KUALA LUMPUR: Star Publications (M) Bhd reported a 12.24% drop in net profit to RM42.8 million for the third quarter (3Q) ended Sept 30, 2007 from RM48.77 million a year earlier.

02-11-2007:

KUALA LUMPUR: CIMB Bank Bhd launched its Dynamic Asia Capital Protected (DACP) fund yesterday which offers investors exposure to the economic growth within the Asian region via three underlying indices within its portfolio, namely the Hang Seng Index, MSCI Sing Cash IX Index and Nikkei 225.

The DACP fund is a three-year product combining insurance and investment features.

Its retail banking head Peter England said: "Applying DACP's Investment strategy to historical data, investors could see potential average annual returns of 11.6%."

He said DACP was suitable for investors who were uncertain about the market yet wanted to ride on the growth of Asian equities while locking in their returns during market gains.

He added that the portfolio would come with a dynamic rebalancing strategy that facilitates prudent adjustments according to market conditions and insurance coverage, besides having a capital protection feature, if the investment was held to maturity.

In a press statement yesterday, it said in the event an investor passed away before the investment matured, his surviving nominees would receive at least 125% of his investment within 14 days.

01-11-2007

KUALA LUMPUR: Deposit insurers risk issuing misguided policies without understanding the psychology of depositors, who may behave irrationally despite having all the relevant information, Malaysian Deposit Insurance Corporation (PIDM) chief executive officer Jean Pierre Sabourin said.

Prudent regulation, sound economic policies and an efficient market place may not be enough to gain public confidence, he said.

"Regulators and supervisors view the general public as rational, undisrupted by emotion and irrationalities. But in reality, emotions and group influences also matter," Sabourin said in his opening address at the 6th International Association of Deposit Insurers (IADI) annual conference here yesterday.

PIDM is an independent statutory body that provides protection for depositors in the event that a financial institution is unable to repay its depositors holding insured deposits.

Sabourin highlighted that research in behavioural economics provided evidence that people did not act rationally in ways that standard economic theories assumed. "This is especially true for the less educated and the disadvantaged," Sabourin said.

There was also evidence that consumers were unable to absorb complex information required to make rational decisions, and would instead apply rules of thumb and demonstrated a high tendency to avoid losses, he added.

"I am not a psychologist but a seasoned deposit insurer who has spent many years trying to understand consumer and market psychology, and I think we definitely need better behavioural insights," Sabourin said.

Through behavioural economics, he said deposit insurers could understand better the varying ability of consumers to handle information, influence their behaviour and use "framing" to influence them.

"Current approaches by policy makers to raise transparency focus too much on the provision and availability of information and too little on the quality and relevance of information and the capacity of the market and the individuals within the market to manage these information," Sabourin said.

He added that deposit insurers could undertake studies with behavioural economists on this matter and develop policies to guide consumers in determining which information is relevant.

On influencing consumers' behaviour, Sauborin said the traditional belief that more choices was better is now challenged by studies that suggested "too many choices" discouraged consumers from choosing as they could not compare.

In such a situation, behavioural economists had suggested for a policy to gently guide consumers to make the best choice that could improve their welfare, he added.

Elaborating on the use of framing to influence consumers, Sauborin said a research by Sendhil Mullainathan of Harvard University showed that a bank in South Africa saw an increase on its loan demand among men as much as if its interest rate were dropped by five points when it used a woman's photo for advertisement.

"While I am not suggesting that we post a woman's photo on our brochures, I wonder whether we could use framing in the way we communicate with consumers to influence their choices with the aim to help them make less mistakes," he added.

25-10-2007

KUALA LUMPUR: AmAssurance Bhd has emerged as the latest suitor to acquire a stake in Malaysian Assurance Alliance Bhd (MAA).

MAA's parent company MAA Holdings Bhd announced in a Bursa filing yesterday that Bank Negara Malaysia had 'no objection in principle' for MAA Holdings to commence preliminary discussions with AmAssurance as the potential buyer.

Prior to this development, MAA Holdings had announced last month that Bank Negara had given it the green light to begin preliminary negotiations with four short-listed potential partners, which were keen to acquire the stake in MAA.

The four parties were Allianz Insurance Management Asia Pacific Pte Ltd, joint bidders AXA Asia Pacific Holdings Ltd and Affin Holdings Bhd, Kurnia Asia Bhd and Nippon Life Insurance Company.

On Sept 21, Bank Negara gave the go-ahead to AXA Asia Pacific and Affin to commence preliminary talks with MAA Holdings for the MAA stake.

In June, MAA Holdings said it planned to sell a 49% stake in MAA, which offers life and general insurance products. The composite insurer has subsidiaries in Indonesia and the Philippines through PT MAA Life Assurance and PT MAA General Assurance, and MAA General Assurance Philippines Inc respectively.

In the Philippines, it also has a mutual fund subsidiary - MAA Mutualife Philippines Inc. MAA ended the day's trade at RM2.08 on Bursa yesterday, on a volume of 9.71 million shares.

26-10-2007

KUALA LUMPUR: The implementation of the National Health Insurance Scheme, which is to be undertaken in the current Ninth Malaysia Plan (9MP), should be done in a careful manner.

Health Minister Datuk Dr Chua Soi Lek said this is to enable the scheme to be implemented in a detailed, efficient and smooth manner to benefit Malaysians from all walks of life.

In a written reply to Datuk Suhaili Abdul Rahman (BN-Labuan) at Parliament yesterday, he said the financial details of the mechanism including its implementation date have yet to be decided.

Chua added that the main reason for the introduction of the National Health Insurance Scheme is to reduce the burden of medical costs on the people and the government.

The government has studied various models including seeking expertise from abroad, and the planning of the scheme has also taken into account studies commissioned by the government as well as obtaining input from the public and private sectors and non-governmental agencies.

Chua added that among the positive impact of the scheme is that it would increase access and accord equal treatment to all apart from reducing medical cost.

The scheme would also promote flexibility and freedom of seeking medical treatment from both the private and government medical establishments.

Chua said it has been proposed that the National Health Scheme be made compulsory to all Malaysians including permanent residents.

He added that Malaysians can still subscribe to other private health or accident insurance on top of the new insurance scheme.

16 November 2007
Japan's Nippon Life Insurance Co. has withdrawn from talks to buy a stake in Malaysian Assurance Alliance Bhd, the Malaysian insurer said. It did not give a reason.

Tuesday November 20, 2007

Anuar Mohd Hassan
KUALA LUMPUR: MNRB Holdings Bhd is ahead of forecast in expanding its conventional reinsurance business overseas to 20% from 13% of its total reinsurance business, according to non-independent director Anuar Mohd Hassan.

The target was to expand this business to 20% in the next three to five years, but the company was already ahead of target, he said.

"Our foreign business accounts for 17% of total portfolio. We should meet our target in less than three years," he told a press briefing yesterday.

Anuar said the group already had reinsurance business in the Asia-Pacific region as well as the Middle East and the North African (MENA) region. MNRB's reinsurance business is handled by wholly-owned subsidiary, Malaysian Reinsurance Bhd (Malaysian Re).

Malaysian Re was assigned Insurer Financial Strength Rating of "A-" by Fitch Ratings in November 2006, making it better placed to expand its portfolio domestically and internationally.

According to Anuar, for the first six months of the current year ending March 31, 2008, the group saw a 46% increase in its foreign business since Malaysian Re's "A-" rating.

He said the group was servicing its clients in the Asia-Pacific region through its Kuala Lumpur based office while its operations in the MENA region was handled through its Dubai office.

The group, he said, intended to change the status of the Dubai office (which was currently just a marketing office) into a full underwriting outfit some time next year to enhance the business in the area.

"It (the reinsurance business) is a personalised business. The insurance companies there (in Dubai) would like to see the faces of the people who are on the other side of the business."

Anuar said the group would also be making inroads into Japan.

"Because of the sheer size of the companies (in Japan), the business would be profitable. We are definitely trying to target that market, and will be scheduling a visit some time early next year," he said.

MNRB was also making studies to venture into Eastern European countries, as reinsurance was already a mature market in Western European countries, Anuar said.

"Some of the top reinsurers in the world are already in the Western European market. There would be no reason for them to offer the reinsurance business all the way to Malaysia when they can place it just around the corner."

For the first six months ended Sept 30, MNRB recorded a 128% improvement in pre-tax profit to RM133.6mil from RM58.7mil in the previous corresponding period. Revenue was also higher by 13% to RM471.9mil from RM418.6mil before.

The company has declared a higher interim dividend of 20% for the first six months compared with 15% in the previous corresponding period.

According to Anuar, the higher revenue was a result of the increase in gross premium underwritten by Malaysian Re and the increase in wakalah fees earned by Takaful Ikhlas Sdn Bhd, another MNRB subsidiary.

20-11-2007

KUALA LUMPUR: Tune Money Sdn Bhd is confident of attracting 500,000 members to sign up for its newly launched prepaid card, the Tune Card, by end-2008 as it is available to the underserved markets that do not qualify for credit cards, said its chief executive officer Tengku Zafrul Aziz.

"There is a big number (of potential applicants) in the market out there. This is a conservative figure. Compared to the other cards available, this is the cheapest prepaid card," he told reporters after the launch of Tune Card here yesterday.

Tune Money has teamed up with Visa International to come up with Tune Card. Zafrul said the card was available to anyone who applied for it as there was no minimum salary requirement or employment checks.

"At the moment, a significant proportion of the Malaysian working population do not carry a credit card, either because they earn less than RM1,500 a month and do not qualify for one or because they are afraid of the credit card debt spiral," he said.

He said Tune Card users did not run the risk of accumulating debts as it would have to be loaded upfront. "Tune Card users will be able to check their balances and transaction histories online which would allow for budgeting and better cash management," he said.

Those interested in Tune Card can apply for it online via www.tunemoney.com or offline and need to pay the initial minimum load amount of RM50, and collect their cards at selected Pos Malaysia branches after seven days in West Malaysia and 10 days in East Malaysia.

Cardholders are charged an annual fee of RM9.99 and are required to maintain a minimum balance of RM10 on the card at all times. They will subsequently be able to reload their cards through online payment via Maybank2u for Maybank, Clicks for CIMB Bank as well as at any Pos Malaysia, CIMB and Bank Simpanan Nasional branches.

Zafrul said additional features like international money transfer, transportation payment, fund transfer between cardholders, bill payments, mobile reloads and loyalty programme would be added to Tune Card within the next three months.

On its future plans, Zafrul said Tune Money was looking at launching a hospitalisation insurance soon, and that it hoped to launch its unit trust products after the regulatory approval was received.

"Our focus for 2008 would be on (unit trust) fund management, and expanding into neighbouring countries like Indonesia, Thailand and Vietnam.

However, that also depends on the regulatory authorities there and how soon approval is granted," he said.

Asked about the company's reported share sales, he said there was a need to raise funds for its expansion but that the size was yet to be determined. "We are still studying the commercial viability of going into regional countries," he said.

Its been a week since AG announced plans to introduce No-fault Insurance scheme. See link

http://www.malaysianbar.org.my/content/view/10709/2/

At present, lawyers will represent an accident victim and once the insurance of the vehicle which injured the victim, is identified, letters will be exchanged, and if no settlement can be achieved, the case goes to Court. More proposals will exchange and usually some kind of settlement will be achieved just before Trial. Some cases of course, just cant be settled and a Trial is required to solve this.

Why need lawyers in Personal Injury claims?

1. The matter is a Tort claim. The victim alleges that the negliglence of another caused injury to the victim. Since it is a Tortiuos claim, obviously lawyers will be called in to try solve this. Legal issues are involved and the victim would need representation to help his/her cause.

2. The lawyer also act as a shield to the victim from the often giant Insurance companies who have the strength and depth to stretch a victim, particularly victims without deep pockets.

It is therefore worrying to hear that the AG wants to abolish the current system to the no-fault system. Many lawyers who are specialised in these kind of cases will be affected. In fact many firms in rural areas are basically "Personal Injury Claim" firms. How to "cari makan"?

Why change?

In the said newspaper report, there were a few reasons put forward for this proposal, but allow me to focus some issues related to the lawyers only.

There are allegations that the Court and Lawyers causes the delay towards a claim for the victim. I must concede that there is some truth to this allegation, though it is NOT absolutely accurate either.

The system for Personal Injury claims can be slow. Either the Sessions Courts have too many cases to hear that day, or Lawyers not ready and adjourns the case or even where parties are adjourning cases pending settlement.

But the system has created 'specialists' in the Sessions Court as the Judges there more often than not, become very well verse with Personal Injury Claims. The Judges do try to speed the cases up.

Lawyers specialising in this area also become better and better as they handle more and more such cases. So, there are some 'good' in the current 'slow' system.

Perhaps one issue which can be visited is "contingency fee" of lawyers. Contingency Fee is not allowed for one primary reason, in that it's exercise converts the lawyers involved, into an interested party - as the more the victim is compensated, the higher the fee the lawyer earns.

Of course, we have read many contentions that contingency fee 'assists' victims who cannot afford legal fees and the imposition of a fixed fee system would deprive the victim of much needed legal services.

I however, take a position that contingency fee should continued to be disallowed.

The Bigger Problems

But, I am concerned that the AG has failed to address 2 BIGGER problems:-

1. The Insurance Company.

These companies in the disguise of trying to evade fraudulent claims more often than not delays the claims as long as they can.

It is my view that even with the No-Fault Liability Claim, the compensation will still NOT be paid any quicker, so long as the Insurance Company are not coerced to do so. In addition, It is also my contention that the erasure of lawyers in Personal Injury Claims would mean the victims would be at the mercy of the Insurance Company, and this time, the victim has no representation and no one to shield, protect and defend him/her.

In Singapore, despite the radical change of the Personal Injury Claims there, Lawyers there are STILL very much involved in the claims process. The victims still have lawyers representing him/her.

2. Medical Reports from Government Hospitals - there are cases where medical reports take almost a year to be extracted. Whilst these are extreme examples, but there are many complaints from Personal Injury Lawyers of unexplained delay in the said extraction.

Conclusion

I hope the AG will NOT abolish the current system. Once abolished, it may not be possible to return. What in fact the AG ought to look at are, inter alia:-

1. Specialised Courts - perhaps a MOTOR VEHICLE CLAIMS TRIBUNAL

2. Improve the extraction of Medical Reports.

3. Allow the said TRIBUNAL have 'watchdog' powers to ensure fairplay from the Insurance Companies, so as to avoid delayed claims

This is not an exhaustive list of proposed involvement. If you have anything to add, please do so. Of course if you do not agree with me, please write in too. Perhaps if the AG is reading this, he will have more views to consider before making any decision on this area of law.

New Zealand first came out with this idea way back in the 1970s. It was implemented without Kiwis having to pay for comprehensive insurance coverage. In fact, if truth be told, I was running two cars in New Zealand without any coverage until a lawyer friend told me that I was running a risk since my exposure to risk can mean that my pockets will be burnt.

Taking a lawyers' view, what worries me is that the "no-fault" insurance claim will mean that a lot of my learned friends doing motor claims will have to re-design their practice.

At the time when the motor claims were taken away from lawyers in New Zealand, the New Zealand Government opened an ALTERNATIVE STREAM of work for them - the Treaty of Waitangi land claims.

Here in Malaysia, no one except the Bar Council seems to care about such adverse implications for the legal fraternity.

The legal fraternity has lost many of its role in the nation. For instance, right now, lawyers are being left out of work involving the Malaysia My Second Home (MM2H) programme. Under the auspices of the Ministry of Tourism, a circle of agents are now appointed to do such work.

Malaysian lawyers are even competing against the Public Trustee for work on applications for probate and letters of administration.

Then, there is the ongoing loss of jobs in will-writing to other organisations.

The list is not exhaustive, but the declining scope of work for lawyers does not augur well for the continued independence of the Bar. And this problem assumes potency as the number of lawyers increases year by year.

I am writing on motor insurance although I do not do insurance work, but I did MM2H work and applications for probate and letters of administration.

Sunday, 04 November 2007, 08:23am
©The Sunday Star

KUALA LUMPUR: The Bar Council has expressed its concern over the no-fault liability scheme proposed by the Attorney-General to replace the current mode of compensation and claims over road accidents. (Please click here to download the Bar's memo on no-fault liability scheme)

Its chairman Ambiga Sreenevasan said that while she welcomed Tan Sri Abdul Gani Patail's initiative that had the best interest of road accident victims and their families in mind, the Bar noted that there had not been any in-depth study on the scheme's viability and relevance in Malaysia.

In a statement yesterday, she said victims of road accidents would now include "the reckless, selfish and dangerous drivers, the speed demons, the drunkards and the Mat Rempit" as there was no concept of "fault" in the scheme.

"The deterrent element currently in-built in the present system will be demolished," she said, adding that statistics gleaned from other jurisdictions with such a scheme showed the rate of accidents increased on its introduction.

Ambiga said the scheme would also lead to a limit of the current categories of compensation that could be claimed by accident victims, resulting in the innocent or "blameless victims" being worse off compared to the current system.

She said motor insurance premiums were likely to increase with the introduction of the scheme, which would further burden the majority of Malaysians.

To address these issues, Ambiga said the Bar had presented a detailed memorandum to Abdul Gani that provides for an alternative mechanism.

Spearheaded by the Kuala Lumpur Bar Committee with the judiciary, she said this initiative to revamp the current system should be given a chance to prove its worth.

Kurnia Asia Bhd
Downgrade to SELL
Fair Value: RM1.00
RM1.17
Price Chart (RM1.17)
Price Performance
52-week High/Low: RM1.36 / RM1.08
1-mth 3-mth 6-mth 1-yr YTD
-3.3 -4.1 -6.4 0.0 -4.9
1.00
1.10
1.20
1.30
1.40
Jan-05
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Jan-06
Jul-06
Daily Volume (m)
%u2022 Higher claims and additional provisions made in 4QFYJun06 for IBNR
reserves resulted in dismal FYJun06 results
%u2022 Falling car prices and weaker new car sales resulted in lower gross
premium but various measures are to be implemented to counter this
trend
%u2022 To roll out new non-motor products in FYJun06 to boost non-motor
segment
%u2022 Downgrade to SELL with a revised fair value of RM1.00, pegging at 13x PE
on EPS07 7.7sen
FYJun06 results: Below expectations. Kurnia Asia Bhd (KAB)'s full year FY06
earnings were below our expectations as well as street's consensus. Net loss
of RM48.7m for the final quater dragged KAB's full year FY06 earnings to only
35.0% of our expectations of RM142.3m and 35.5% of street's consensus of
RM140.6m mainly because KAB reported a loss of RM48.7m in 4QFYJun06.
Figures available for the previous year's corresponding period not comparable
as the Group was formed in November 2004. There was no dividend declared
for the quarter.
Gross premium contracted. Gross premium contracted by 4.8% to RM279.6m
from RM293.7m in 4QFYJun06. KAB attributed the contraction in gross premium
to: 1) its strategy to streamline business portfolio to enhance long-term profitability
and 2) falling car prices and lower car sales as the result of NAP impact
have adversely affected KAB's topline as this inevitably reduced the market value
of motor vehicles, which in turn, lowered the sum insured and premium written.
KAB is particularly vulnerable to the NAP impact due mainly to its concentration
to the auto vehicle market with 92.3% of its insurance portfolio comprised of
motor insurance as at end-FYJun06 (FY05: 92.5%)
Various measures are to be implemented to cushion the impact of declining
car sales. KAB will be implementing various measures, including a strategy to
increase its motor renewal ratio to counter the impact of the expected contraction
in new car sales this year. Among the measures, management plans to expand
its agent base and strengthen relationships with bank partners and offer innovative
products, including hybrid packages for its customers. We understand that
the current renewal ratio is around 67% among existing customers.
Claim ratio spiked to 71.7% from 59.0%. The spike in claims ratio was mainly
due to adverse claims and provision made for IBNR (claims incurred but not yet
reported) reserves. KAB's overall claims performance in FY06 had weakened
mainly due to higher number of theft claims, total losses and third party property
damages cases. We believe the sudden higher claims in 4QFYJun06 was partly
the result of the yearly physical review of files to determine the level of adequacy
of provisions made for the claims.

Last Updated Wednesday, 18 April 2007
Bank Negara Malaysia wishes to announce the issuance of revised capital framework for the banking institutions and
insurers. This revised capital framework will be implemented on a trial run basis beginning April 2007.
The revised framework is part of the effort to ensure that prevailing regulatory framework effectively takes into account
the rapidly changing environment faced by the financial industry and the more complex risk profiles of the financial
institutions arising from the offering of more sophisticated products and services. There has been an extensive
consultative process with the banking and insurance industries to ensure that the revised capital framework takes into
consideration domestic market conditions and practices and are consistent with best global standards and principles.
Under the new framework for the respective industries, the board of directors of the banking institutions and insurers are
expected to play a greater role in enhancing the robustness of risk management infrastructure and market conduct
governance. The respective framework would promote greater protection of the interests of the various stakeholders of
the banking institutions and insurers, particularly the depositors and policy holders.
The two revised frameworks would be complemented by a supervisory review process by Bank Negara Malaysia and an
enhanced disclosure requirement on the capital strengths of the banking institutions and insurers.
Revised Framework for Banking Institutions
The revised capital framework for banking institutions is based on the standardized approaches under Basel II and will be
effective from 1 January 2008. The standardized framework sets capital requirements by assigning predetermined risk
weights to the various types of exposures. Banking institutions that have made significant progress in developing robust
internal rating standards would be given the flexibility to adopt Internal Ratings-Based (IRB) approach in 2010 without
having to comply with the standardized framework.
Revised Capital Framework for Insurers
The revised capital framework for insurers will be effective from 1 January 2009. Insurers which possess the capacity to
adopt the framework earlier will be given the flexibility to migrate to the framework in 2008. The framework will further
enhance the existing solvency framework by establishing more transparent and risk-adjusted capital and valuation
requirements that reflect all major financial risks of insurers. This is to ensure that the capital position of individual
insurers are at levels that commensurate with their risk profiles. The enhanced framework would also accord greater
flexibility and relaxations for insurers in managing their investments.
Bank Negara Malaysia
18 April 2007
MII e-Library
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November 23, 2007: 07:44 AM EST

AMSTERDAM -(Dow Jones)- ING Groep NV (ING) wants to see a growing share of its profit come from its Asia-Pacific insurance division in the future, supported by demographics and soaring economic development in the region, a top official told Dow Jones Newswires.

Hans van der Noordaa, the regional chairman for insurance, said that Insurance Asia-Pacific - one of six divisions of ING - brought in about 7% of underlying profit before tax, an indicator that ING uses to measure its operational performance, in the third quarter for the Dutch financial services company.

"We want that percentage to go up - it has to," he said. "Both organically and through acquisitions, we are focused on new markets in Asia and the Pacific area."

The ING chairman declined to elaborate where exactly he sees opportunities but underlined that ING has "an open mind" to acquisitions for both its retail banking as well as for its wealth-management activities.

"We will expand through participations, joint ventures and by gaining access to distribution platforms, not just by clear-cut takeovers. Growing in Asia requires a broader mindset than that," Van der Noordaa said.

ING, the largest financial services company in the Benelux area by market capitalization, has this month alone received approval to set up branches in the Chinese provinces of Anhui and Jiangsu. It also signed a distribution deal with Malaysia's second-largest banking group Public Bank Berhad.

Before that, it had purchased South Korea's Investment Manager Landmark from Morgan Stanley Private Equity Asia and integrated that with its own local asset- management company. It recently took a 30% stake in Thai TMB Bank PLC (TMB.TH) as part of a plan to strengthen TMB's capital adequacy.

Van der Noordaa, also a member of the executive board of ING, said other moves in the region are in the cards.

"We have a few important bancassurance deals with big players and several smaller deals in the pipeline in the region," Van der Noordaa said, adding that the talks are taking place in economies where ING is already active as well as new countries.

ING is the world's fourth-largest life insurance group by market capitalization after American International Group (AIG), Allianz SE (AZ) of Germany and France's Axa SA (AXA).

It has activities in mature Asian countries such as Japan, Taiwan, South Korea and Australia, which represent some 80% of its profit within its Asian-Pacific insurance business. In Australia, ING formed a fund-management and life insurance joint venture with ANZ (ANZBY), one of Australia's major banks.

But the Dutch lender is also active in developing Asian economies, such as China, Thailand, Malaysia and India.

Growth Engines Sluggish

Asia-Pacific insurance is seen as one of ING's growth engines, together with online and savings bank ING Direct and the ING retirement business in the U.S.

Recently, however, those growth drivers have been sputtering. Since early 2006, underlying profit before tax at the Asia-Pacific Insurance division has hovered around EUR150 million each quarter, hurt by growing competition in the region and investments that are yet to bear fruit.

"The growth engines are not performing as well as was presumed, and overall earnings are still dominated by Benelux bancassurance," Chris Hitchings at Keefe, Bruyette & Woods said. He added that in Asian life insurance, ING is losing out to the U.K.'s Prudential PLC (PUK) in "its reliance on markets that are slow and competitive, rather than the tigers of the future. KBW rates ING at market-perform.

Jaap Meijer, an analyst at Dresdner Kleinwort, said: "Much of ING's value of new business from its Asian insurance business is coming from the more-developed markets of Japan, South Korea and Taiwan, which aren't growth markets." He said he didn't see "many positive catalysts as the earnings momentum at both its insurance and banking divisions is slowing down." Dresdner Kleinwort rates ING at reduce.

Van der Noordaa, however, said he wasn't "too worried over profit growth in Asia" and cited higher operating costs as ING invests in future earnings.

"Profits are not a good indicator for a growth engine. If we would make more profits in this growing region, it would mean we are not investing enough," he said. "We will continue to monitor costs, but we will also continue to invest in new lines of business where we want to grow faster."

One area where ING, was until recently underinvesting was in its "brand awareness with the mass affluent customer," Van der Noordaa said.

To catch up, ING now sponsors the AFC Asian Soccer Cup and about a year ago set up a sponsorship deal with the Formula 1 racing team Renault. "We wanted to make some more noise," Van der Noordaa said.

An investment that made a big bang for ING was its 19.9% participation in the Bank of Beijing Co. (601169.SH), which on the day of its listing in September saw its shares rise some 80%.

Two years ago, ING paid some EUR200 million for its stake in the Chinese lender and although the listing did dilute ING's stake in the bank to 16.7%, the value of it has now risen to more than EUR2 billion.

One hurdle that the ING executive said needs to be overcome there is protectionism in the Chinese market.

"A dilemma in China is that foreign companies can only do business via joint ventures and that there's no level playing field," he said. "We have a disadvantage to local financial Chinese players, which can work nationwide, whereas we need to concur the country step-by-step. And before a joint-venture company is set up, it can be quite a struggle," he said.

Van der Noordaa said there are about 25 foreign insurance companies active in China, holding a 5% to 6% share of the total Chinese life insurance market.

Overall, ING, which has a market capitalization of about EUR55 billion, posted a net profit of about EUR7.7 billion for 2006.

Company Web site: http://www.ing.com

23-11-2007

KUALA LUMPUR: Rexit Bhd's 51%-owned joint venture with Marubeni Corporation of Japan has been appointed to implement e-Cover services for Sompo Japan Insurance Inc.

Rexit said the JV company Rexit International Sdn Bhd had received a letter of intent to provide the e-Cover service to initially cover Sompo Japan's foreign marine business.

It said details would be announced upon the execution of an agreement between Rexit and Sompo Japan, which is one of the largest non-life insurance companies in Japan.

Kuala Lumpur , February 7, 2006:
KUALA LUMPUR, Feb 7 (Bernama) -- Malaysia National Insurance Bhd (MNI) expects to be ranked among the top three in marine cargo insurance business over the next two years with the launch of its new Marine Web Portal.

Its acting chief executive officer Mohamad Salihuddin Ahmad, in stating this, said the insurance company was currently ranked fifth.

The Marine Web Portal is a web-based solution developed by Merimen (M) Sdn Bhd to expedite the issuing of the Marine Certificate of Issuance (CI) by corporate clients, agents, shipping agents and brokers.

Mohamad was speaking to reporters after a signing ceremony between MNI and Merimen to seal their collaboration here Tuesday.

He said with the launch of the web portal, MNI hoped that its existing 200 corporate clients would utilise the facility by year-end.

"At the moment, about 30 out of the 200 existing corporate clients have signed up to use our portal," Mohamad said.

"With our current inclusion under the Mayban Fortis insurance group, we believe we will be able to tap into the group's corporate clients. They have about 200 clients we can tap to use the portal," he added.

The web portal is accessible by logging into MNI's website at www.mni.com.my.

Mohamad said the Marine Certificate of Issuance (CI) was previously issued using pre-printed forms which were subjected to human error, time and administrative cost.

"With the web portal, it does not only reduce the processing cost of issuance but also enhances accuracy and simplifies downstream processes," he said.

MNI also hoped to attract about 50 to 100 new corporate clients to use the web portal, he added.

On the company's financial performance, Mohamad said MNI has targeted to increase total gross premiums by 12 percent to RM550 million for the current financial year ending June 30, 2006, from RM490 million last year.

He said the marine insurance business comprising the marine cargo industry and marine hull businesses was expected to contribute 14 percent this year.

MNI also expects the marine cargo industry business to contribute about 10 to 15 percent to the gross premiums for the current financial year, he added.

- BERNAMA

November 26, 2007 20:51 PM

PETALING JAYA, Nov 26 (Bernama) %uFFFD More effective preventive and security measures adopted by Malaysia and the other littoral states had resulted in Lloyd's of London delisting the Straits of Melaka as a war-risk zone for more than a year now, Deputy Prime Minister Datuk Seri Najib Tun Razak said.

As such, vessels using the straits were no longer required to pay a higher insurance premium, he said at the taking delivery of three Dauphin AS365 N3 helicopters from Eurocopter Malaysia for the Malaysian Maritime Enforcement Agency (MMEA) in Subang near here, Monday.

Najib, who is also the Defence Minister, said the government was committed to developing the capability of the MMEA in view of the need to safeguard the maritime areas.

He told reporters afterwards that the government planned to buy three more medium-light helicopters for the MMEA. The three Dauphin AS365 N3 helicopters cost RM145 million.

Meanwhile, Najib in is speech said Malaysia being a maritime nation, must ensure every inch of its sovereign territory and the nation%uFFFDs interest must be protected at all time.

This is because Malaysia%uFFFDs waters cover an area of 614,000 sqaure kilometers and coastline of 4,492 kilometers under the maritime zone, he said.

Apart from maintaining the national maritime interest, Malaysia bordered by vast seas must also contribute to the international community by ensuring freedom of movement and safety in the Straits of Melaka, South China Sea and the waters off Sabah.

%uFFFDIf they (international community) lose confidence, it will cause negative impact to our economy,%uFFFD he said.

OLDWICK, N.J.--(BUSINESS WIRE)--November 1, 2007--A.M. Best Co. has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of "a-" to Lonpac Insurance Bhd (Malaysia). The outlook for both ratings is stable.

The ratings reflect Lonpac' s track record of profitable operation, diversified business composition and adequate capitalization. The ratings also consider the company' s distribution capabilities and the growth opportunity in the Malaysian non-life sector.

In addition to conventional financial intermediaries, Lonpac is capable of disseminating its risk products through its nationwide branch offices and bancassurance partners. Premiums written through the agency force, brokers and bancassurance channel accounted for approximately 35%, 12% and 29% of the company' s gross premium in 2006, respectively. A.M. Best anticipates that the well spread premium production sources will enable Lonpac to sustain its ongoing business growth in the near term.

Lonpac has a strong track record of profitable operation over the last five years. Due to the favorable claims experience and stable expenses ratio, Lonpac' s combined ratio fell from 82.3% in 2002 to 75.1% in 2006. Improving underwriting results, coupled with stable investment income, greatly increased the company' s return on equity, which averaged 23.7% over the last five years.

Lonpac strengthened its capitalization to RM 198 million (USD 55.99 million) through retention of operating earnings over the past five years to support its premium expansion. The company' s Best Capital Adequacy Ratio (BCAR) demonstrates that Lonpac is adequately capitalized on a risk-adjusted basis.

COLOMBO, Nov 27 (Bernama) -- Syarikat Takaful Malaysia Bhd, the biggest takaful operator in the world, today sold its 10 percent stake in Amana Takaful Plc, a Sri Lankan Takaful insurance company.

Ehsan Zaheed, director and chief executive officer of the Sri Lankan firm, said the Malaysian company sold its stake in line with a decision to shed its interests in overseas companies.

Amana Takaful was set up in 1999 in collaboration with Takaful Malaysia, catering for both family and general takaful insurance. It is the first insurer in Sri Lanka to introduce the practice of refunding surplus premiums at the end of the term of policies.

The Malaysian stake was sold to Amana Investments, a Sri Lankan merchant banking operation which is the largest investor in Amana Takaful

November 16, 2007 21:33 PM

KUALA LUMPUR, Nov 16 (Bernama) -- Malaysia wants all the players in the Association of Southeast Asian Nations (Asean) insurance industry to increase their competitiveness as a region in order to retain a greater share in the insurance business.

Bank Negara Malaysia Deputy Governor, Datuk Mohd Razif Abdul Kadir said there was a great potential for the Asean players to retain a greater share of the insurance business particularly in reinsurance and underwriting of large, specialised risk which traditionally flows out of the region, he said.

In order to increase the region's capacity and expertise to underwrite such risks, greater collaboration in the form of technical assistance and information sharing is important, he pointed out.

Mohd Razif said this in his speech at the opening of the 10th ASEAN Insurance Regulators Meeting and 33rd ASEAN Insurance Council Meeting Thursday.

He said through such collaboration, the ability for the insurance industries in Asean to underwrite and reinsure risks to serve the needs of the Asean businesses and individuals can be significantly enhanced.

The industry should work together with the regulators to explore ideas to build capabilities and capacities while initiatives to harmonise standards across countries should continue, he said.

A more systematic and structured information sharing mechanism through a regional centre can also serve as a catalyst for the development of the industry.

Asean's population of 568 million, and the younger generation's changing priorities and lifestyles - growing wealth and increasing proportion of middle income population - will also support continued and further growth in demand for investment-linked and wealth management products, he said.

As a result, the insurance industry has, and will continue to, expand its role beyond merely providing protection products, Mohd Razif said.

Last year, the insurance premiums averaged 2.95 percent of gross domestic product (GDP) in South East Asia compared with 8.8 percent in the United States (U.S) or 16.5 percent in the United Kingdom (U.K).

A significant development has been the evolution of alternative distribution mechanisms for insurance products and services in the region, notably through bancassurance, Mohd Razif said.

"Perhaps, in those markets where the insurance distribution channels through agency force have yet to be firmly established, bancassurance could provide a quantum leap to allow insurers to rapidly widen their outreach by tapping into an established banking network and client base.

"Worldwide, insurers have been successfully leveraging on bancassurance to gain a foothold in markets with low insurance penetration and a limited variety of distribution channels," he said.

30-11-2007

KUALA LUMPUR: Insurance player MAA Holdings Bhd (MAAH) slipped into the red with a net loss of RM6.95 million for its third quarter ended Sept 30, 2007 versus a net profit of RM2 million a year earlier due to higher provisions made for non-performing loans by its non-insurance credit business.

Revenue rose 9.29% to RM502 million from RM459.3 million. No dividend was declared. For the nine-month period, its net profit fell to RM452,000 from RM1.62 million, while revenue rose 7.8% to RM1.61 billion from RM1.49 million.

In a statement yesterday, MAAH said it recorded lower pre-tax profit of RM1.1 million, versus RM3.2 million a year earlier, due to increase in loss recorded by shareholders' funds, resulting from higher provisions for non-performing loans by its non-insurance subsidiary.

Increased management expenses and higher finance costs from its RM200 million medium term notes issuance also contributed to the decline in profit.

The company said no profits were transferred from the life insurance fund to the shareholders' fund as the transfer would only be carried out at the financial year-end.

27-11-2007

KUALA LUMPUR: ING Insurance Bhd expects RM1.5 million in new premiums within one year of the launch of its I.ExpatCARE medical package for expatriate workers and families, with the amount expected to double in the next three years.

ING Insurance Bhd chief executive officer and president Dr Nirmala Menon said the expatriate market of about 100,000 people currently was expected to grow significantly as more Malaysian companies set up operations overseas.

She added that 70% of the 100,000 expatriates were Malaysians working overseas, while the remaining 30% were foreigners working here.

With Malaysia's bullish economic outlook expected to signal a heightened movement of workers into the country, ING Malaysia looked forward to making its mark on the niche target market of expatriate human capital force, she added.

She was speaking to reporters here yesterday after signing an MoU with Vanbreda International, a Belgian insurance brokerage, to provide I.ExpatCARE to inbound and outbound expatriates.

Vanbreda International director of international benefits, Wouter Reggers, said the company saw the partnership as a platform for its growth in Malaysia and the Asia Pacific region.

"I believe our business in Malaysia will continue to grow aggressively and this partnership is yet another part of our long-term expansion plans in Malaysia," he said.

The company's Malaysian arm, Vanbreda International Sdn Bhd, had seen extensive growth since its establishment in 2005, Reggers said.

"Operating a shared service centre (SSC) in Malaysia, the team has doubled in size, serving more than 10,000 expatriate families around Southeast Asia. In October, we were granted MSC status by the Malaysian government. MSC Malaysia status will enable us to support our current activities and develop our business in South East Asia, China and India," he said.

He said Vanbreda International had just opened its office in Beijing, where its tie-up with a Chinese insurance company would see its claims handling done out of Malaysia.

He said to drive growth in the region, the company would continue to develop and deliver a suite of customised products and solutions to multinational corporations and government agencies which had employees globally.

I.ExpatCARE offers inpatient and outpatient care to individuals and corporations under five plans, covering three geographical zones with insurance coverage ranging from RM950,000 to RM14.25 million per annum.

KUALA LUMPUR, Dec 7, 2007 (Asia In Focus via COMTEX) -- FRDPF | charts | news | PowerRating -- AMMB HOLDINGS BERHAD (KLSE:1015) said it has received BANK NEGARA MALAYSIA (BNM) approval to begin preliminary negotiations to sell a minority stake in the life insurance business of AMASSURANCE BERHAD to UK insurer FRIENDS PROVIDENT PLC. In a statement to BURSA MALAYSIA on Dec 6, AMMB also said it has submitted a separate application to the central bank to obtain approvals to split the existing composite insurance licence of AmAssurance to enable AMMB to undertake the life and general insurance business through two separate companies.

* AMMB holds a 70 per cent stake in AmAssurance while the balance of 30 per cent is owned by IAG INTERNATIONAL PTY LIMITED (IAG).

* AMMB said it will release further details on the proposed sale if the discussions are successful.

Friday, December 14, 2007; Posted: 03:12 AM

KUALA LUMPUR, Dec 14, 2007 (Asia In Focus via COMTEX) -- KUASF | charts | news | PowerRating -- KURNIA ASIA BHD (KLSE:5097) aims to achieve between five and eight per cent growth in gross premium for the financial year ending June 30, 2008, managing director and chief executive officer, Adrian Loh said. "We want to grow organically. We are also looking at 63-65 per cent growth in claims and 18-21 per cent in management expansion," he told reporters after the company's annual general meeting here Thursday.

* Loh said the company also hoped to increase its current share of 14.5 per cent of the overall local general insurance market.

* "Our near term target is 18 per cent which we believe we can achieve in the next three to five years while our distant target is 30 per cent," he said

By Kittisak Siripornpitak

PAC Total Solutions Sdn Bhd, a member of HeiTech Padu Bhd, expects to attract a bigger slice of the Malaysian insurance market with its partnership with Danish insurance provider, TIA Technology A/S as announced on November 14, 2007.
PAC chief executive officer, Eric Loo, said the company has selected to partner TIA Technology because of its proven record in innovating solutions that were effective and could help lower costs of ownership for insurers.
"With the partnership we will be able to strengthen our business presence, initially, in Malaysia and other Asian markets such as Singapore, Indonesia and Thailand," he said.
Under the agreement, PTS will market and implement TIA Technology's flagship product called, TIA Solution, not only in Malaysia but throughout Asia.
TIA Solution is a modular integrated core insurance solution that manages the entire insurance processes that has since been successfully adopted in 45 insurance companies in over 20 countries.

Tuesday, November 18, 2008 6:32 AM
Kuala Lumpur : Kurnia Asia Berhad today announces a Loss after tax of RM301,789,000.00 based on the Quarterly Report on Consolidated Results For The 4th Quarter Ended 30 June 2008. The Report has not been audited and filed to Bursa Malaysia on 6th October 2008, about three months after the financial closing in 2008

Wednesday, November 12, 2008 6:25 AM
KUALA LUMPUR: Malaysian Assurance Alliance Bhd (MAA Assurance), which has to divest assets to boost its balance sheet, has hived off its general insurance business and sold another slice of its takaful business. In separate announcements yesterday, AmBank Group and MAA Assurance stated that they had entered into a non-binding memorandum of understanding whereby AmBank Group's 70%-owned subsidiary, AmG Insurance Bhd, proposed to acquire a 100% stake in MAA Assurance's general insurance business as well as a 4.9% stake in MAA Takaful Bhd

Tuesday, November 18, 2008 6:23 AM
An industry source said that about 200 of the group's conventional insurance and takaful unit employees had accepted the voluntary separation scheme (VSS), offered last month. It is learnt that CIMB Aviva has about 550 employees. News of the VSS scheme is a worrying sign amid the global financial crisis. Already, there are rumours that a similar scheme may be offered at another local insurer as the slowing economy hurts business. CIMB Aviva told Business Times that the VSS was part of a restructuring exercise. This will lead to its focusing on the life and family takaful business, distributed through a bancassurance partnership with CIMB Bank

Wednesday, December 24, 2008 11:22 PM
KUALA LUMPUR, Dec 22 (Bernama) -- Prudential BSN Takaful Bhd (PruBSN) will spend about RM7 million to establish seven new branches in 2009. PruBSN chief executive officer Mohamad Salihuddin Ahmad said the first two branches to be located in Shah Alam and Johor Bahru, are due to commence operations in the first quarter of next year. "The other five branches will also be located in state capitals.It will cost us about a million ringgit to establish each new branch," he told Bernama in an interview recently. Established in 2006, he said the company aimed to further strengthen its position in the country

Monday, November 10, 2008 4:43 PM
KUALA LUMPUR: Friends Provident plc is set to buy a 49% stake in AmAssurance Bhd. The deal would see AmAssurance gain a partner that would help it grow the life insurance side of AMMB Holdings Bhd's business. Insurance Australia Group Ltd has a 30% stake in AmAssurance but wants to sell that and take a 49% stake in AMMB's general insurance business, AmG Insurance Bhd. The deal with Friends Provident should be sealed in a few weeks and comes on the heels of AmG Insurance's proposal to buy the general insurance business of Malaysian Assurance Alliance Bhd (MAA) for RM274.8mil or at price-to-book value of 2.6 times

Monday, November 10, 2008 4:53 PM
WASHINGTON: In a record bailout of a private company, the government on Monday provided a new $150 billion financial-rescue package to troubled insurance giant American International Group, including $40 billion for partial ownership. The action, announced by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would be insufficient to stabilize the teetering company

Tuesday, December 30, 2008 7:12 AM
TOKYO: Japan's Mitsui Sumitomo Insurance Group Holdings Inc, Aioi Insurance Co and Nissay Dowa General Insurance Co are in talks to merge, a company source said, in a move that would create the country's largest non-life insurer. Traders snatched up shares in the three and in Tokio Marine Holdings Inc, currently Japan's top non-life insurer. "Investors liked the merger news as it sparked hopes of greater profitability and less competition in the sector," said Yoshinori Nagano, a chief strategist at Daiwa Asset Management

Tuesday, November 18, 2008 6:30 AM
PETALING JAYA: Prudential Assurance Malaysia Bhd (Prudential Malaysia) has attributed its double-digit growth in new business premiums in the third quarter to the success of its "transformation" strategies. The insurer registered a 33% growth in new business premiums to RM181mil for the third quarter ended September 2008 compared with the previous corresponding period. Total new business premiums for the first nine months were RM451mil, up 20% from a year earlier. Prudential Malaysia was the top insurer in terms of new business sales for the first half of 2008, with 13% growth and 21% market share, according to chief executive officer Bill Li

Friday, January 02, 2009 10:51 PM
The insurance company starts the report by talking about changing its culture and philosophy, and how it reaches out to customers. It says: "Seeing things afresh, and acting upon them is akin to a blank sheet of paper, ready to be folded, shaped and transformed into a variety of fascinating forms." It adds that transformation is the only way to go. Few people will dispute that. The financial year ended June 2008 (FY08) is a year to forget for Kurnia Asia. Less than four years after its listing on the main board, it reported a net loss of about RM300mil, due mainly to an underwriting deficit of some RM400mil

Saturday, November 22, 2008 6:24 AM
Its managing director and chief executive director Captain KH Chia said the country's largest motor insurer aspires to have a balanced portfolio in "one to two years". The beefing up of non-motor business is part of Kurnia's re-organisation that will see motor contribution falling from about 80 per cent of the group's revenue currently. For the financial year ending June 30 2008, 84 per cent of Kurnia's RM288 million gross premiums came from motor policies. Kurnia, has an overall market share of over 20 per cent in the motor insurance industry. It recorded a net loss of RM301.78 million for the financial year ended June 30 2008, mainly due to an increase in its technical reserves and a reduction in total investment income.--

Tuesday, February 10, 2009 4:33 AM
KUALA LUMPUR, Feb 10 (Bernama) -- Allianz Malaysia Bhd will synergise operations at three of its branches by offering life and non-life insurance under one roof. In a statement today, Allianz said the Batu Pahat, Miri and Sungai Petani branches are latest on the list to further emphasise the company's growth and customer focus. "By synergising our operations under one roof, it simply creates the convenience for a one-stop solution," said chief executive officer Alexander Ankel

Saturday, November 22, 2008 6:28 AM
KUALA LUMPUR: ING Insurance Bhd is expecting a solid growth in first-year premiums for this year despite operating in a weakening economy. President and chief executive officer Datuk Dr Nirmala Menon said the company was not letting up on its three-year strategy for profitable growth, proving its commitment to improve the productivity and professionalism of its agency force. "We achieved a 37% growth in first-year premiums in the first nine months this year to RM770mil," she told reporters at the ING Group Asia-Pacific business strategy briefing yesterday

Wednesday, January 14, 2009 7:19 AM
HONG Leong Financial Group Bhd (HLFG) is exploring strategic partnerships and alliances that could help its insurance arm, Hong Leong Assurance Bhd, to expand. The company was replying to query from Bursa Malaysia Bhd on a Business Times report that said HLFG may sell a stake in Hong Leong Assurance. HLFG said it is constantly exploring opportunities -

Wednesday, January 21, 2009 2:28 AM
HONG Leong Financial Group Bhd (1082) is in talks with several parties on a possible strategic tie-up with its insurance arm, Hong Leong Assurance Bhd (HLA), said a company director. "We have had several companies approach us, much like a lot of other companies in the industry have been approached. "We do not really have anything concrete or firm. Right now, we have a lot of people asking and talking but nothing really definitive," said Hong Leong Group director Charlie Orapeza, who is also HLA group managing director.

Thursday, November 27, 2008 10:12 PM
PETALING JAYA: Kurnia Asia Bhd posted a net loss of RM12.11mil in the first quarter ended Sept 30 mainly due to losses in investment activities, which were hampered by the weak equities market where mark-to-market provision accounted for RM26.76mil. This was in contrast to net profit of RM14.35mil a year ago. The company said yesterday the losses were also due to finance expenses of RM4.15mil in relation to stamp duties and facility fees on the RM400mil term loan taken by the company. It said the term loan was used to subscribe for the irredeemable convertible subordinated debt issued by its insurance arm Kurnia Insurans (M) Bhd. It reported revenue of RM304.49mil in the first quarter compared with RM290.75mil a year ago

Sunday, December 21, 2008 2:47 AM
KUALA LUMPUR, Dec 10 (Bernama) -- Syarikat Takaful Malaysia Bhd is looking for a strategic partnership, possibly with Indonesian banks, its group managing director Datuk Hassan Kamil said Wednesday. "Yes, it's possible but there is no candidate at the moment," he said when asked on the possibility of its parent company, Bank Islam Malaysia Holdings Bhd, having talks with Indonesian banks to take a stake in Takaful Malaysia. "The partner must have some value-added potential for Takaful Malaysia. What we will be looking at are distribution capability and cross-selling opportunities," he told reporters after the company's annual general meeting here.

Wednesday, December 24, 2008 11:15 PM
KUALA LUMPUR: Uni.Asia General Insurance Bhd has appointed Mohd Fauzi Yaakub as its chief executive officer with effect from Dec 11, 2008, eight months after he was made chief operating officer in April. In a statement yesterday, Uni.Asia General chairman Tan Sri Syed Anwar Jamalullail said: "Under his leadership as COO, he has demonstrated his grasp of the business challenges and his management abilities to get things done. "We are delighted that as CEO, he is now devoting more of his unbounded energies and business acumen to further our cause and guide the team through a softening market."

Wednesday, December 24, 2008 11:19 PM
KUALA LUMPUR: Commerce Assurance Bhd's (CAB) general insurance business will be transferred to Allianz General Insurance Company (Malaysia) Bhd (AGIC) on Jan 1, 2009. "For the customers, the transfer of business will not affect any terms and conditions of their policies as all CAB policy holders shall from Jan 1, 2009 be regarded as AGIC policy holders. All agents of CAB will become agents of AGIC," said Ng Hang Ming, chief executive officer of AGIC and CAB. Allianz Malaysia Bhd has been operating through the two general insurance subsidiaries since the acquisition of CAB in 2007. It has another subsidiary operating in the life segment, Allianz Life Insurance Malaysia Bhd (ALIM).

Tuesday, February 24, 2009 6:50 PM
KUALA LUMPUR: The National Insurance Association of Malaysia (NIAM) is targeting up to RM20mil in premiums by year-end for its newly-launched life insurance policy Teras Malaysia Extra. The policy is an upgrade of an earlier product, Teras Malaysia, that was launched in 1998. Since then, it had generated RM222mil in premiums from 236,000 policyholders. NIAM chairman Koh Heng Kong said the former policy raked in over RM20mil in premiums per year and that he expected similar response for the upgraded policy.

Saturday, January 17, 2009 2:43 AM
KUALA LUMPUR, Jan 13 (Bernama) -- Malaysian Assurance Alliance Takaful Berhad announced today its inaugural declaration of dividends for investment-linked funds for the fiscal year 2008. According to a statement by the company, investors with Shariah Growth Funds are being given a bonus of eight units per 100 units held, while Shariah Balanced Fund holders receive a bonus of 10 per 100 units. Dividends distributed for the Shariah Income Fund would be at 1.3 cents per unit held. "Despite the poor equity performance in 2008, the Shariah Growth and Shariah Balanced Funds were ranked number one and two respectively compared to other Takaful funds in Malaysia," said MAA Takaful chief executive officer Salim Majid Zain.

Wednesday, January 21, 2009 2:23 AM
KUALA LUMPUR: Hong Leong Assurance Bhd (HLA) is optimistic of maintaining last fiscal year's 3% growth in gross premium for the financial period ending June 30 (FY09). Group managing director and chief executive officer Charlie Oropeza attributed his confidence to HLA's commendable performance for the first six months of FY09 despite the gloomy economic outlook. "Although it may be challenging given the current economic outlook, it is possible to maintain the gross premium growth achieved in FY08 as growth trends in terms of gross premium, renewal premium, recruitment and productivity of new agents have been good for the first half of FY09," he told a press briefing yesterday.

Friday, January 30, 2009 1:49 AM
KUALA LUMPUR, Jan 29 (Bernama) -- Takaful Ikhlas Sdn Bhd has announced the winners for its Baiti Jannati lucky draw campaign for government staff. The winning prizes are vouchers for household furnishings worth RM15,000 to five winners while another 10 winners are to get a deposit account each worth RM500 with Tabung Haji. In a statement here Thursday, the company's deputy executive president and chief operations officer, Wan Mohd Fadzlullah Wan Abdullah said the campaign launched on April 19, 2008 was aimed at attracting the interest of government staff to choose the company as their provider of takaful or Islamic insurance services through its housing and mortgage products. "Each government staff who takes on a housing loan is encouraged to choose Takaful Ikhlas as their takaful agent. "As an incentive, we launched this campaign," Wan Mohd Fadzlullah said.

Tuesday, February 24, 2009 6:52 PM
KUALA LUMPUR: The National Insurance Association of Malaysia (NIAM) is targeting up to RM20mil in premiums by year-end for its newly-launched life insurance policy Teras Malaysia Extra. The policy is an upgrade of an earlier product, Teras Malaysia, that was launched in 1998. Since then, it had generated RM222mil in premiums from 236,000 policyholders. NIAM chairman Koh Heng Kong said the former policy raked in over RM20mil in premiums per year and that he expected similar response for the upgraded policy.

Saturday, February 14, 2009 1:22 AM
KUALA LUMPUR: Syarikat Takaful Malaysia Bhd has invested RM12 million in a three-year IT infrastructure outsourcing deal with HP Malaysia. Takaful Malaysia group managing director Datuk Hassan Kamil called it a strategic move to "get things in order and to position for growth once the market stabilises". He expected the economy to at least hit bottom by year-end and when that happened, Takaful Malaysia's processes and systems would be poised to support its plans in growing its market share. He acknowledged that the "pressure is on me, as the board will be looking to me to deliver both top line and bottom line growth."

Wednesday, March 04, 2009 5:30 AM
KUALA LUMPUR: Zainudin Ishak has been appointed executive director and chief executive officer of HSBC Amanah Takaful (M) Sdn Bhd. HSBC Bank Malaysia Bhd said in a statement that Zainudin had 19 years of hands-on experience in managing a conventional and Islamic insurance company. "Before he joined HSBC Amanah Takaful, he was chief executive officer of another local joint-venture takaful provider.

Monday, February 16, 2009 7:29 PM
PETALING JAYA: Policyholders will be able to buy or renew their motor insurance policies directly with insurance companies at a discount if the proposal by insurance companies to raise motor premiums is approved, according to industry sources. It is learnt that Bank Negara is in discussion with motor insurance players and has requested them to provide discounts if it decides to approve a hike in motor insurance premiums as requested by the industry due to rising motor insurance claims. A 30-year veteran of the insurance industry told StarBiz the move would allow policyholders an option to either walk in and buy directly over the counter at a discount from insurers or they could buy through their agents, whereby they would have to pay a 10% commission.

Monday, February 16, 2009 7:31 PM
KUALA LUMPUR: AXA-Affin General Insurance Bhd expects slower growth this year amid the economic slowdown but still sees a 14% growth in its gross premiums, said chief executive officer Jahanath Muthusamy. He said the insurer's growth this year would be driven by commercial business, which was expected to make up 47% of the company's total portfolio from the 45% last year. The group's gross premiums had increased by 18% to RM324mil, against the industry's growth of 10% for the first nine months of 2008, according to Jahanath.

Thursday, February 19, 2009 7:47 PM
I WISH to refer to the letter "Insurance policies are never forced on clients" (The Star, Feb 18) and would like to relate my own experience on this matter. Just last month, I went to renew my third party car insurance policy at a notable insurance company. I was told that I had to buy extra PA policy, otherwise the company could not sell me the motor insurance. I told the lady at the counter that I did not need any extra PA as I already had one. But she insisted that it was her company's policy that all customers who refused to buy PA would not be sold the car insurance. She even asked me to speak to her boss if I was not happy about it. I walked out without speaking to her boss. I went to another insurance company which sold me the car insurance without much fuss. May I ask the writer if that was "recommendation" or "force-selling"?