ACR ReTakaful's Rating

ACR ReTakaful SEA Berhad has been assigned a financial strength rating of 'A-' (Excellent) and an issuer credit rating (ICR) of "a-" by A.M. Best.

Source: Insurance Journal

Spouses with Same Sex are Allowed

This may not come to this region soon.

In US, Blue Cross & Blue Shield announced that legally married same-sex couples will be entitled to enjoy spousal benefits in the health insurance plans.

While we do have health plans designed with spousal benefits in Malaysia (in particular employer-sponsored plans), same-sex marriage is not yet legal here.

The decision by Blue Cross & Blue Shield would put some challenge to the actuaries. Typically claims statistics are collected by sex. The spouse of a male policyholder is always assumed to be a female and vice versa. With same-sex spouses allowed, theoretically the pricing would be out. It would be interesting to see how US actuaries allow for this. Anyone with knowledge in this is welcome to comment on this.

Source: WKBW

News in Brief

MAA Takaful recently visited Solidarity Group in Bahrain. The delegation was led by CEO and comprised leading agency managers and sales agents.

Source: Gulf Daily News

INGeasi for Women

ING has launched a comprehensive all-in-one financial solution called INGeasi. Several products will be launched under the INGeasi series within a year. The 1st product under such series is INGeasi for Women.

Product Features:

• 4 plans are available: Dream, Success, Harmony and Cherish
• Protection for accidental death, disability, critical illness and female-related diseases
• Dream: for women just entering the workforce
• Success: for professional women with higher earning power
• Harmony: for working mother with children
• Cherish: for homemakers

For men, I guess we have to wait for INGeasi for Men to be rolled out?

Source: Business Times

ASM Celebrates 30th Anniversary

Actuarial Society of Malaysia (ASM) celebrated its 30th anniversary yesterday evening at Prince Hotel in Kuala Lumpur.

7 past presidents of ASM were invited to the function. The dinner function was preceded by actuarial talks by 2 ASM's members. A short EGM was then called to approve the change in the Constitutions of the Society.

10 newly qualified actuaries (Yes! You read it right - TEN!) in 2007 and 2008 were also given recognition by ASM yesterday evening.

Notably, some appointed actuaries did not show up yesterday. Were they too busy with the Q2 RBC submission?

Source: TAS

Partnership with Standard Chartered Extended

Prudential has extended its bancassurance partnership in Asia with Standard Chartered to 2016.

Other details:

• The markets covered has been broadened to include Japan and Thailand in addition to the original Hong Kong, Singapore and Malaysia.
• New products now included in the partnership: A&H aand Takaful products.
• A separate partnership agreement between the two companies covers 3 other countries: China, Taiwan & Korea.

Source: Investment Week

MAA Takaful CancerCare

MAA recently launched a standalone comprehensive cancer plan that covers all forms of cancer.

Product Features:

• For 10 gender-specific cancers, benefits are paid at the 1st stage of cancer
• Entry ages: birth to age 65
• Expiry age: 75
• Coverage: RM25,000 to RM500,000
• Contribution starts from RM67 p.a.
• Extra 25% benefits on male cancers: lung, prostate, colon, small intestine, nasopharyngeal and female cancers: cervical, uterine, ovarian, breast, vagina
• Advanced payment of 25% benefits at the stage of Carcinoma in Situ
• Funeral expenses: RM10,000
• Surplus sharing: 50%

Other information:

• Target contribution for this product in 1st year: RM10 mil
• Secured 138 certificates since launch in early July
• Products in the pipeline: capital-protected endowment, medical plans, specialised PA

Source: The Star

Takaful Al-Waqi

Mayban Takaful (Etiqa Takaful) launched a new product: Takaful Al-Waqi last week.

Product Features:

• Single contribution investment-linked
• 2-year term
• Target fund size: RM200 mil
• 90% invested in fixed income investments
• Balance in commodity related portfolio
• Minimum contribution: RM20,000
• Entry ages: 18 to 70 years

Other business news on Maybank:

• 6 new products are planned for the next 12 months

Source: Maybank, Bernama

Pacific to negotiate with OSK

PacificMas has obtained BNM's approval to negotiate with OSK Holdings Bhd to dispose of all the issued and paid-up share capital of The Pacific Insurance Berhad.

Earlier posts on this story: please click on Pacific Insurance label below.

Source: Bursa Malaysia

HLA Promise

HLA has collected RM10 mil in premiums since the soft launch on 14 July of its new product HLA Promise.

Product Features:

• Participating endowment providing S.T.A.R. benefits:
• S: Savings - guaranteed lump sum at maturity
• T: Total Protection - TPD & death benefits
• A: Assured Income - guaranteed increasing regular cash payments
• R: Reinforced Benefits - Option to continue receiving cash benefits until maturity in event of TPD, Critical Illness (CI) or Death (double payment in the event of CI)
• Entry age: 1 month to 55 years
• Minimum sum assured: RM20,000
• Flexible payment period: 6, 8 and 10 years

Other statistics on HLA:

• Regular premium sales grew 154% for FY 2008
• Life insurance customer base: 350,000

Source: The Star, Business Times & TAS Research

Secure Income Plus

Manulife has launched an investment-linked product for retirees with Guaranteed Withdrawal Benefit (GWB).

Product Features:

• GWB: either regular stream of income for at least 20 years (apparently at 5% of account value) or lifetime income from age 66.
• Loyalty bonus is granted (apparently 25% of GWB if no withdrawal in first 5 policy years and 5% for each year from years 6 to 10 reaching a maximum of 50%)
• Step-up mechanism: (apparently on every 5th policy anniversary if the market value of the account is higher than the GWB, the GWB is stepped up to the market value)
• Switching is allowed
• 3 Secure Income Plus lifestyle portfolios are available
• Distributed through HSBC

Source: Business Times & TAS Research

Mitba wants to self regulate

The Malaysian Insurance and Takaful Brokers Association (Mitba) wants to become a self-regulatory organisation by September 2009. A new CEO will be appointed to head the organisation.

Currently the brokers' market share stands at 36.9% of the total non-life and non-motor general insurance premium of RM5.65 bil. About 85% of the broking market is held by foreign brokers and 15% by local brokers.

Source: The Star & Bernama

Equitable Life - Maladministration by Regulators

The Parliamentary Ombudsman to the UK Equitable Life case has concluded that the maladministration of the former Department of Trade and Industry, the Government Actuary's Department and the Financial Services Authority has contributed to the Equitable Life debacle.

Some of the mistakes made are:

• One person was permitted to play both the role of Chief Executive and Appointed Actuary for more than 6 years, this has weaked the Appointed Actuary's role as whistle-blower
• The calculations of solvency position was not challenged, the financial position of Equitable Life was not properly verified
• Misleading information was permitted to be provided to policyholders and potential policyholders
• Equitable Life was permitted to take credit for a reinsurance arrangement which had not been concluded

Two recommendations were made by the Ombudsman:

• The public bodies to apologise for the failure
• A compensation scheme to be set up by Government for those affected

The Ombudsman's report is 1,800 pages long but regulators may want to take time to read the report as it is certainly a valuable lesson learned although in the hard way.

Source: Ombudsman's Press Release

AUD Guaranteed Income Savers II

Hong Leong Assurance has come up with Series II of its AUD Guaranteed Income Savers product, to be distributed through Hong Leong Bank.

Product features:

• 4 year non-participating endowment plan
• 100% capital guaranteed at maturity
• Initial investments from RM30,000
• Offer period: 17 July - 4 August 2008
• Fund size: RM36 mil
• Guaranteed annual income of up to 7.55%
• Death benefits of up to 235% of annual premium paid

Series I that was launched in May 2008 exceeded initial target fund size of RM42 mil within 8 days and the fund size was increased by RM36 mil.

In Australia, fixed deposit interest rate for term of 24 months can be as high as 8.3% p.a.

Source: Hong Leong Bank, HLA & TAS Research

MITBA is the New Name

Insurance Borkers Association of Malaysia has changed its name to Malaysian Insurance and Takaful Brokers Association (MITBA). It targets the brokers' share in the non-motor general segment to hit 50% within 3 years from the current 36.9%. Some target sectors include agriculture and information technology.

MITBA has 38 members comprising 29 composite, 4 takaful and 5 conventional insurance brokers.

Source: The Star

PRUway

Prudential targets to equip 1,000 of its wealth planner with customised laptops co-branded with Dell, loaded with PRUway software, enabling them to do transactions while on the move.

PRUway software is able to recommend a suitable financial solution for clients after evaluating their financial data. Prudential invested RM12 mil in the notebooks with RM3.4 mil in the costs of hardware and a large percentage of the balance in development of PRUway.

Another 1,000 wealth planners will be equipped with the notebooks in 2009. The eventual target is 5,000 over the next 3 to 5 years.

New product in pipeline: Pru-Cash Premier, a 10-year pay product.

Source: The Star & Business Times

S$69 million Exposure

Great Eastern Holdings has S$69 mil exposure to Fannie Mae and Freddie Mac. This represents about 0.16% of its total fund of S$42 bil.

Source: Channel NewsAsia

Enhanced Motor Insurance Package

It is believed that Allianz General Insurance has teamed up with BMW to offer a comprehensive motor insurance package.

Some special features are:

• A brand new replacement car during the first 12 months BMW ownership in the event of total loss from accident or theft
• Guarantee use of only authorised BMW dealerships, service centres and genuine BMW parts
• Absence of premium loading and market value adjustment for subsequent renewals

Source: Motor Trader

Allianz is No. 2

Allianz General Insurance Co (M) Bhd has moved to the number 2 position in general insurance with a market share of close to 10% after merging with Commerce Assurance Bhd last year.

Other statistics:

• Gross written premium grew by 33.2% from RM561.9 mil (2006) to RM748.6 mil (2007)
• Allianz Life charted 20.6% growth in written premium in 2007

Source: The Star

September Deadline for PacificMas

Bursa Securities has given PacificMas until 25 Sept 2008 to comply with the Spread Requirement.

PacificMas' public shareholding spread was 16.46% as at 30 June 2008, falling short of the minimum 25% spread requirement by Bursa. The shortfall in public shareholding occurred after cash offer by OCBC.

Source: Bursa Malaysia

Etiqa to Double Profits by Next Year

Etiqa believes that the insurance industry will not be affected by the increase in oil and food prices as it is a necessity and it helps to mitigate inflationary pressures.

For FY06, Etiqa achieved gross premiums of RM3.5 bil and profit before tax of RM262.6 mil. Etiqa aims to double the profit latest by next year.

While bancassurance is one of the dominant channels adopted by Etiqa, it recognises the importance of agents. Etiqa has an agency force of 14,000.

Source: BizWeek

Inflation will Affect Motor Insurance Business

The recent fuel price hike and the high inflationary environment is expected to have negative impact on the motor insurance business. The demand for vehicles, especially the large capacity vehicles, will likely to be depressed. The motor insurance premium growth is expected to be affected as a result.

The gross written motor insurance premiums reached RM4.67 bil in 2007, a growth of 1.4% over 2006.

Kurnia expects that inflation will also put pressure on management expense. The slowdown in vehicle sales however may be temporary as cars are still a neccessity for Malaysians.

Source: Business Times

Financial Planning key to improve Penetration Rate

The current insurance penetration rate of 40.1% can be further improved if the industry focuses on financial planning. Manulife's CEO opines that the distribution of products should be more on needs-based approach rather than product-pushing approach.

LIAM's President concurs and thinks that the industry needs to create branding and educational campaigns to show the value of life insurance and financial planning.

Source: The Star

Improved Underwriting Profits despite Soft Market

Lonpac has improved its underwriting profits by 8.6% to RM22.8 mil despite operating in a very soft and competitive market. Premium rates were eroded in such a market. Lonpac recorded underwriting surplus in all classes of insurance and registered a higher solvency margin surplus of RM199.7 mil above the minimum required solvency margin of RM490.2 mil.

Gross premium income grew to RM292.5 mil from RM257.1 mil and net income grew 15.5% to RM192.3 mil from RM166.5 mil.

Source: The Star & Business Times

Regional Support Centre

Manulife has embarked on Regional Support Centre (RSC) model. It opened an RSC in Sibu recently.

The RSC is an integral component of the company's multi-distribution channel strategy where it will support agency, bancassurance and financial advisors with facilities of training, marketing and customer service.

Source: Business Times

Great Eastern Targets RM1 bil

Great Eastern targets to achieve new business premiums of RM1 bil in 2008. The company had achieved the target set for the 1st half year. To promote growth, the company will focus on financial consultancy services.

Great Eastern opened its new premises in Penang on Wednesday. Penang branch brought in more than RM67 mil NB premiums in 2007 and the target for 2008 is RM84 mil.

Source: The Star

Revised Capital Framework Key Priority

BNM said that the implementation of the revised capital frameworks for the banking and insurance industries would remain as its key priority this year.

Earlier there was some confusion that Basel II deadline for the banking industry would be extended, it has since been clarified that the deadline remains at 2010.

Source: The Edge Daily

ACR ReTakaful Receives Licence

ACR ReTakaful SEA Bhd has received an operating licence from BNM. ACR ReTakaful would be capitalised at RM325 mil and the licence allows them to offer retakaful solutions and services to the South-East Asian market.

Source: The Star

2 New UK Fellows

The UK Institute of Actuaries released the results of April 2008 examinations on 4 July. We are pleased to announce that Malaysia has 2 additional actuaries.

Congratulations to Wan Saifulrizal Wan Ismail and Yoon Yew Khuen!

Source: Institute of Actuaries

Foreign Shareholders may not Get Dividends

As at 30 June 2008, Manulife Insurance (Malaysia) Berhad was 53.28% owned by foreign shareholders. According to the 3 August 2005 resolution, those new foreign shareholders who were registered after 8/8/2005 are in a queue and will not receive the payment of dividends until based on the queue, their shareholdings rank within the first 49%.

Source: Bursa Malaysia

AmHigh Takaful

AM Islamic Bank has teamed up with Takaful Ikhlas to sell bancatakaful products. 2 investment-linked plans were launched recently: Single Premium (SP) and Regular Premium (RP).

Some product features:

• Minimum contribution: RM200 per month (RP), RM5,000 (SP)
• Term: 10 - 52 years (RP), 1 to 52 years (SP)
• Entry age: 18 to 60
• Death benefit: higher of NAV or sum insured
• Sum insured (SP): 125% (entry age 18 - 50) or 105% (entry age 51 - 60) of single contribution
• Sum insured (RP): 60% or 100% of total expected regular contributions
• Death benefit excludes AIDS related death
• Up to 50% of NAV invested overseas
• 2 funds: AmHigh Islamic Cash and AmHigh Islamic Equity

Sales targets: 11,000 certificates worth RM40 mil

Source: The Star & TAS Research

Uni.Asia's Deal Off

DRB-HICOM and OSK have mutually agreed to cease all negotiations in relation to the disposal of the entire 51% equity interest in Uni.Asia Capital Sdn Bhd of DRB-HICOM to OSK.

The 2 companies commenced negotiations on 10 October 2007.

Source: Bursa Malaysia

Manulife's HR Vision

Manulife wants to be the employer of choice. The following are considered important to reach this vision:

• Communicate with a high degree of integrity the availability of job opportunities to its staff.
• Implement Performance Management System (PMS)

PMS comprises the following:

• Performance appraisal
• Talent identification
• Compensation and benefits
• Career advancement opportunities

Source: The Star