A(H1N1) death rates

For actuaries out there, in case you are pricing a product to cover death risk for A(H1N1) patients, the world death rate currently stands at 0.42%. This is equivalent to the mortality rate of a male aged 50, according to the latest Malaysian insured life table M9903, definitely not to be taken lightly. (In layman's terms, the chance of an A(H1N1) patient dying is the same as the chance of a male aged 50 dies due to all causes before he reaches age 51).

The table below shows the death rate by country:



Source: The Star

Appointed Actuary

We are searching for an actuary to be the appointed actuary of a company based in Kuala Lumpur. If you meet the following requirements, we would be glad to hear from you:

• 30 years or older
• At least 3 years experience post qualification
• FIA, FSA, FIAA, FFA or FCIA

Candidates who meet most of the above criteria are also encouraged to enquire.

Please contact us for a confidential chat.

Perwakim picketed outside BNM

Perwakim, an association of general insurance agents, picketed outside BNM in protest of the introduction of premium rebates. The premium rebates come into force on 1 July 2009.

A memorandum was handed to Prime Minister's office, the Ministry of Finance and the Ministry of Human Resources.

Source: Business Times

China needs 5000 actuaries

It is reported that China will need 5000 actuaries in the next 5 years. The average annual salary of an actuary is between 500,000 to 1 mil yuan. The highest salary is reported to be 3 mil yuan paid to Steven Mile of Ping An.

Source: China Daily

Towers Perrin and Watson Wyatt merge

Towers, Perrin, Forster & Crosby Inc. and Watson Wyatt Worldwide Inc will merge to form Towers Watson & Co. The deal is valued at $3.5 bil.

Source: The Star

Views on Premium Rebates

Various parties have come forward to express their views on premium rebates:

Fomca

• Welcome BNM's move
• Want the rebate to be extended to life policies as well

NUBE

• In the long run detrimental to consumers, agents and insurance industry
• Agents play a role especially in reaching to the remote areas
• Will cause a huge unemployment problem

PIAM

• Trend is towards diversification of distribution channels
• Increasing demand for agents who could offer a comprehensive financial advisory package
• Customers who are comfortable with and appreciate the services provided by agents will continue to deal through agents

Lonpac

• Agents not affected if they provide good service and are familiar with their products
• Agents can assist in handling claims

Source: Business Times, The Star 1 & 2

Pacificmas talk rejected

For an undisclosed reason, BNM has rejected Pacificmas' application to commence talks with a local party (undisclosed identity) for the disposal of The Pacific Insurance Bhd.

Earlier story

Source: The Star

Prudential Korea sings different tune

It is interesting to read that in Korea, Prudential seems to sing a totally different tune than their counterparts in this region. Some of the points mentioned by the CEO in the interview are:

• Concentrating on whole life insurance, shying away from variable life
• Sticking to direct agency force, shying away from bancassurance, TM
• "Insurance is for protection. For savings, one should go to the bank, and for investment one should go to a securities company. I don't think insurance companies can do these better than them"
• Bancassurance is not good for customers
• "When added up for lifetime, insurance premium is more expensive than a Mercedes"
• Doubtful about banks would conduct regular financial analysis for customers

Is the market in Korea so much different from here?

Source: The Korea Times

BNM moves to principle-based regulatory regime

BNM is moving towards principle-based regulatory regime, away from the rule-based regime in the past.

In early 2009, RBC was introduced. In July, "Guidelines on Introduction of New Products" will be implemented to ensure that consumers are clearly and fully informed of the nature and risks associated with the products.

Towards end of 2009, the Bank will consult with the industry on risk management standards.

Source: The Star, Business Times

Progress in Transformation of Agents

The following is a summary of the various initiatives taken by insurers and their progress in transforming their agents to financial planners:

Prudential

• 1,800 out of 9,000 agents have been converted to wealth planners
• Target another 1,800 to 2,000 this year
• 40 - 50% agents to be wealth planners in next 5 years
• Average productivity of agency force: RM69,000 in 2008
• Wealth planners need to bring in RM200,000 NB annually

Great Eastern

• Target to have 3,000 Life Planning Advisors (LPAs) by 2010
• 600 LPAs at end of 2008

Manulife

• Expect 300 wealth planners by end of 2009
• Target 50% of agents (total agents: 1,500) to be wealth planners by end of 2010

Source: The Star

STMB wants to overtake Etiqa Takaful

STMB has set itself a target to overtake Etiqa Takaful as the largest takaful player in Malaysia by asset size within 2 years. STMB in the launch of one-stop Takaful myDesk with Lembaga Tabung Haji (LTH) also sets the following goals:

• Sign up 10% more contributors within 1 year
• Achieve RM1 mil contributions within 1 year

Takaful myDesk is along the concept of bancatakaful but instead of using a bank, in this case LTH is used as the distribution and service channel.

Source: Business Times, The Star

Lonpac sets targets

Some of the plans/targets set by Lonpac:

• 15% gross premium growth in 2009
• Opening of new branches, at least 5 by 2010, currently 15 branches
• New branches: Klang & Tawau (2009); Johor, Sabah & Sarawak (2010)
• Strengthening agency force, grow by 20% to 1,600 in 2009
• Improve delivery system
• Maintain market share in Fire and Miscellaneous, contributions of these 2 classes to its business stand at 43.2% and 36.7% of gross premium

Lonpac has a CAR of 176%.

Source: Business Times

Good potential for financial advisors in Malaysia

A Swiss Re's survey, covering 8 Asia-Pacific markets, concluded that there is a good potential for financial advisors in Malaysia.

Some of the findings:

• Lowest CAFRI (Consumer Appetite for Risk Index ) - India, followed by Malaysia
• Singapore ranks 4th in CAFRI out of 8
• Strong interest among Malaysians to use financial advisers

Source: Business Times

BNM firm on premium rebates

BNM is pushing through premium rebates on general insurance policies bought directly from insurance companies, despite a strong protest from insurance agents.

Apparently, the rebates do not apply only to motor insurance policies as previously announced but to other general insurance policies as well. The rebates for non-motor policies vary by type of insurance and are between 5% and 25%.

Insurance agents are encouraged to transform themselves to financial advisors. BNM also said that there were no plans to introduce premium rebates for life policies.

Some statistics:

• 40,000 general insurance agents in Malaysia
• RM4.4 bil premium in general insurance (2008)
• Motor insurance is the largest class with 50% share
• 15% of motor insurance business was direct business

Source: Business Times 1 & 2, The Star, BNM

AEON to sell insurance policies

AEON plans to sell insurance policies through the internet and its service centres. The insurance policies will be sourced from:

• General insurance: AIG and ACE
• Life: AIA

AEON has 29 service centres in Malaysia.

Source: Business Times

AIA rebrands

AIA is distancing itself from AIG by embarking on a corporate rebranding exercise. The rebranding will cover the following countries:

• Malaysia
• Singapore
• Indonesia
• Thailand
• Brunei
• Vietnam
• China
• Hong Kong
• South Korea
• Australia

Source: The Star

CIMB Aviva sets targets

CIMB Aviva sets the following targets:

• Top bancassurance player by 2011
• Top takaful player by 2011

The company claimed to be the 3rd largest bancassurance player currently.

Some info on CIMB Aviva:

• 90% of products distributed through banks, mainly CIMB bank
• Also uses tele-marketing and direct marketing
• Will consider other distribution channels after bancassurance business pick up
• Launch of EasyLife Solutions increased sales of regular premium investment-linked

Source: The Star

HLA Secure Income Builder

HLA launched a new product called Secure Income Builder. Product features:

• 6-year investment-linked plan
• Dividends: 4.25% of total annual premium paid, guaranteed for 1st 2 years
• 100% capital-back guarantee upon maturity

Source: Business Times

PA for DiGi's customers

We first reported this story on 12/9/2008 when the PA was offered free.

Now DiGi's customer base has grown from 5 mil to 7.2 mil. The PA is also purchasable for either RM50,000 or RM100,000 sum assured. The premium is RM2 and RM6 respectively for a 30-day coverage.

It is interesting to note that you have to pay 3 times as high a premium for only twice the SA. Wonder whether a lot of people will go for the higher plan except perhaps with the reason to anti-select against the insurer?

Source: Business Times

Local entity may buy Pacific Insurance

Pacificmas has a good chance to dispose of its general insurance unit, Pacific Insurance, to a local unnamed entity. The entity is said to be willing to accept PacificMas' asking price and the deal is pending approval from BNM.

Other information on Pacific Insurance:

• Book value as at 31/3/2009: RM123 mil

Under BNM's regulations, a company can only operate 1 insurance licence in Malaysia. OCBC owns Overseas Assurance Corporation (OAC) and Pacific Insurance in Malaysia. The deadline is October 2009 to dispose of Pacific Insurance or merge the 2 insurance entities.

Related stories: PacificMas' negotiations with other parties.

Source: Business Times

HSBC enters China

HSBC has received regulatory approval to launch an insurance joint venture in China.

The joint venture structure:

• HSBC: 50%
• Beijing-based National Trust Ltd: 50%

The joint venture is named HSBC Life Insurance Co Ltd and will commence business in Q3 2009.

Source: Reuters

AmLife targets to recruit 1,500 female agents

AmLife targets to recruit 1,500 female agents via roadshows from July to November.

Information on AmLife:

• 3,500 agents currently
• 30% growth in total premiums for FY 3/2009
• RM546 mil NB premiums FY 3/2009
• Target 10% growth in FY 3/2010
• Distribution: Agency (40%), Bancassurance (50%)

Source: The Star, Business Times 1 & 2

"A-" for both Malaysian Re and Labuan Re

Fitch has affirmed "A-" rating of both Malaysian Re and Labuan Re.

Information on Malaysian Re:

• Largest reinsurance player in Malaysia
• 80% of business comes from Malaysia
• Holding company MNRB injected RM20 mil capital in April 2009
• Paid-up capital: RM500 mil
• Net income: RM40 mil (FY 3/2009), RM85.1 mil (FY 3/2008)

Information on Labuan Re:

• Owned by 11 Malaysian companies
• 22.5% of business from Malaysia
• Operating loss: US$5 mil (2008), profit: US$22.5 mil (2007)

Source: Business Times 1 & 2

ValuePac

Axa Affin has launched a new product called ValuePac. Product features:

• Apparently a term assurance
• Term: 5, 10, 15, 20 (?)
• With renewability and convertibility options

Source: Bernama

Asia Jade

TM Asia launched a new product called Asia Jade. Product features:

• Term: 3.75 years
• 100% capital protected
• Investment-linked
• 3 underlying stocks: China Mobile, China Railway and China National Offshore Oil Corp
• Sales period: 9/6/2009 to 30/6/2009
• Target sales: RM40 mil
• Minimum premium: RM10,000
• SA: 125% of premium (death and TPD)
• Age of policyowner: Min: 19; Max: 75
• Age of assured: Min: 1 month; Max: 75

Source: Business Times

Aon the new MU shirt sponsor

Aon will replace AIG as the new shirt sponsor for Manchester United. The deal costs £20 million per year. AIG previously paid £14 million per year for the shirt sponsorship.

Source: Insurance Daily

Nan Shan is now cheaper

Nan Shan Life, the insurer in Taiwan 95% owned by AIG is now cheaper by US$200 to 500 mil valued at US$1.8 to 2 bil. 3 parties have expressed interest:

• Fubon
• China Life
• A global private equity firm

Source: Business Times