MHinsure

Etiqa has been selected by Malaysia Airlines (MAS) to offer online travel insurance called MHinsure. MHinsure has access to 24-hour worldwide assistance provided by Mondial Assistance.

Product Features:

• Covers medical expenses, cancellations, baggage losses, delays and other travel disruptions.
• First-time claims below RM2,000 will be settled without documentation within a week.
• Premium starts from RM20 (Malaysian domestic), RM29 (Malaysia to any Asian destination), RM40 (international travel beyond Asia), RM50 (international travel to North America).

Target premium is RM20 mil for FYE June 2009.

Source: Business Times

Friends Provident Keen on Malaysia

Friends Provident is keen to enter the Malaysia life insurance market. However there is nothing currently on their radar.

We reported back in March 2008 that Friends Provident was interested in acquiring IAG's 30% stake in AmAssurance life business.

Source: Business Times

LIAM Calls for Tax Incentives in Budget

Life Insurance Association of Malaysia (LIAM) has called for the following additional tax incentives, to be announced in Budget 2009 today:

• Separate the tax relief of RM6,000 that is currently given to approved fund contributions and insurance premiums, so that each will be entilted to RM6,000. This mirrors the call by MIT.
• Increase the existing RM3,000 tax relief on education and medical insurance to RM6,000.
• Remove the 8% tax on investment earnings that is currently imposed on life insurance funds.
• Provide tax incentives for establishment of private pension schemes.

Meanwhile CIMB Aviva Takaful calls for life insurance and takaful contributions to be tax-exempt up to RM10,000 and education and medical insurance premiums to enjoy RM5,000 tax relief.

Source: Business Times

Pesona Lady

Etiqa launched 2 non-life personal accident products: Pesona Lady and Takaful Pesona Lady. Target sales: RM13 mil in 1 year and 52,000 customers.

Product Features:

• Coverage: female cancers, ATM cash withdrawal losses, facial reconstructive surgery or dental treatment due to accident, infertility due to accident, delivery of twins, snatch theft, kidnap and abduction.
• Pesona Lady: premium starts from RM22/month
• Takaful Pesona Lady: contribution starts from RM24/month

Source: Business Times

Great Eastern Turns 100

Great Eastern celebrates its 100th year anniversary today.

Some facts on Great Eastern:

• Started operations in Singapore on 26/8/1908
• 17,000 agents, contributing 80% of business
• 1.9 mil policyholders
• 5 qualified actuaries
• 1,500 staff nationwide
• RM33 bil in assets, 22.5% market share (in terms of asset size)
• Target new business premium for 2008: RM 1 bil, YTD July: RM600 mil

Source: The Star

MNRB Counts on Takaful

MNRB expects its takaful and retakaful businesses to drive revenue growth in the coming years.

Some facts:

• Takaful Ikhlas' gross contributions: RM428 mil (FY08) vs RM224 mil (FY07)
• Takaful Ikhlas' net profit: RM11.4 mil (FY08) vs RM1 mil (FY07)
• MNRB Retakaful profit after tax and zakat: RM1.9 mil in first 8 months
• Overseas reinsurance business: currently 18% of its revenue; target: 25% of revenue (FY09)
• MNRB's net profit: RM170.44 mil (FY08) vs RM129.47 mil (FY07)

Source: The Star

MIT Calls for Separate Tax Relief for Premium

The Malaysian Institute of Taxation has called for separate tax relief of RM6,000 each for life insurance premium and contributions to approved schemes in the coming Budget 2009.

Currently, individual tax payers are allowed a maximum tax relief of RM6,000 for combined contributions to approved schemes and life insurance premium. For someone who earns more than RM4,545 a month, the EPF contributions alone would have exceeded RM6,000 per year, leaving no more tax relief to be claimed on the life insurance premium.

Source: The Star

Allianz's Deadline Extended by 1 Year

Allianz Malaysia Berhad has been given until 30 Sept 2009 to comply with the 30% Bumiputera equity requirement by SC. The original deadline was 30 Sept 2008.

BNM will decide on whether the 30 Sept 2008 deadline for complying with 49% foreign shareholding will be similarly extended or not.

Source: Bursa Malaysia

Market Select

CIMB launched a syariah-compliant capital protected fund called Market Select on 20 August.

Product features:

• Target: RM200 mil by September 19
• Minimum contribution: RM25,000
• Fund invests in 17 countries
• Takaful coverage of up to 125% of the contribution
• Tenure: 3 years and 5 years

Source: Business Times

News in Brief for the Week

1. Great Eastern and OCBC launched the OCBC Great Eastern Centennial Limited Edition credit card to commemorate Great Eastern's 100th Anniversary.

   Source: The Edge Daily

2. MAA Holdings chairman Tunku Tan Sri Abdullah ibni Almarhum Tuanku Abdul Rahman passed away at the age of 83.

   Source: The Star

3. Takaful Malaysia aims to capture 1/3 market share of the government housing loan scheme. Up to June 30, 2008, Takaful Malaysia has captured 20% market share. The company opened its new Treasury Business Centre in Putrajaya. A takaful desk will also be set up at Bank Islam's branches nationwide. 4 new products under wakalah concept will be launched within 2 months.

   Source: Bernama

10% Mudharabah Payment

Participants in general takaful products of STMB will receive 10% Mudharabah payment if their certificates expire after March 2007 and if they made no claim in the year concerned.

Source: The Star

MNRB Retakaful to Increase International Business

International business is expected to contribute 20% of MNRB Retakaful's total revenue in FYE 31 March 2009 compared to the current 10% level.

The company is looking to expand to Kuwait, Saudi Arabia and the UAE by year-end, and also planning to enter the European market. Currently the company has business dealings in Indonesia, Brunei and Sri Lanka.

Fitch Ratings recently gave BBB+ rating to MNRB Retakaful.

Source: The Star

PruBSN to Boost Non-Muslim Market

Prudential BSN Takaful Bhd (PruBSN) plans to strengthen its position in the non-Muslim market, which makes up 35% of its customers.

Some business initiatives in the pipeline:

• A pure protection product for bancatakaful to be introduced this year.
• 2 new products and 2 new riders to be launched next year for agency distribution.
• Offices to be set up by end-end in Shah Alam, Johor Bahru. 3 more in other areas next year.

A marketing and administration centre was set up in Wangsa Maju last Friday.

Source: Bernama

BizPac

Etiqa Takaful launched a comprehensive package for SMEs/SMIs involved in the manufacturing industry, targeting RM14 mil in contributions.

BizPac is distributed through 39 Maybank Business Centres nationwide. It is reported that there are more than 590,000 SMEs/SMIs operators in the country.

Source: Bernama

Should EPF Run the EPF CI Scheme?

An article by Toh Lye Huat on EPF CI scheme appears in the latest issue of The Edge. Some key points are:

• EPF CI scheme was delayed because of MTUC having some reservations.
• Original target launch date was 1 June 2008.
• The main problem is believed to be MTUC preferring EPF to run the scheme itself.
• Previously EPF annuity scheme also was objected by MTUC.
• Toh questioned whether EPF has the expertise to run the EPF CI scheme.
• Citing RHB Bank, EPF also leaves the running of the bank to the management.
• For the scheme to be successful, intermediaries especially agents need to market and distribute the product, distribution is not EPF's role. If EPF outsources the distribution role or increases its manpower, the cost of doing business will be raised.
• EPF CI scheme is likely to be offered at cheaper rates given the huge volume involved and the risk pooling concept.
• The delay in the scheme has deprived the EPF members the opportunity in obtaining CI protection at an affordable cost.
• Participation is voluntary, those who think it is expensive need not sign up.
• Insurance companies and their agents play the role in explaining the terms and conditions of the cover.

Source: The Edge Malaysia, Issue 715, 11 - 17 August 2008.

Pan Global Purchase Approved

BNM has approved the purchase of PanGlobal Insurance Berhad by Tokio Marine Insurans (Malaysia) Berhad, subject to the latter complying with the margin of solvency requirement under Section 46(1) of the Insurance Act 1996.

Our earlier post on this story >>

Source: Bursa Malaysia

Insurance for Disabled

Disabled people in Malaysia apparently have difficulties getting insurance cover. One wheelchair-bound person related his story that agents were eager to sign him up for insurance when they spoke to him over the phone but changed their mind when they saw him.

At the 3rd Bakti-Mind Conference, LIAM was represented when the above was discussed at the roundtable. Another round of talks is scheduled for November and all eyes will be on LIAM to provide some solution.

Source: The Star

Posassurance

RHB Insurance Bhd has signed up Pos Malaysia as its distribution channel for its hospital cash income plan.

Plan Features:

• Premiums from RM80 p.a.
• RM200 per day hospital cash up to 180 days per year
• RM400 per day hospital cash for ICU up to 30 days per year
• Lump sum RM1,000 for hospitalisation > 15 consecutive days

Source: Business Times

Approval from MOF Lapses

We previously reported that Mayban Fortis was to acquire 60% of PT Anugrah Life Insurance ("Anugrah") from PT Panin Life Tbk ("Panin") and formed a partnership with Panin. The Ministry of Finance of Republic of Indonesia ("MOF") apparently set a deadline of 4 August 2008 for both parties to submit the relevant documents.

Maybank and Panin are still engaged in seeking resolution to the proposed partnership. However the approval of MOF has lapsed today.

Source: Bursa Malaysia

FRS 139 is in from 1 January 2010

Malaysian Accounting Standards Board (MASB) announced that FRS 139 Financial Instruments: Recognition and Measurement will be effective on 1 January 2010 in Malaysia. By 1 January 2012, Malaysia will also be brought to full convergence with International Financial Reporting Standards (IFRS).

Source: MASB

Prudential's 1H Results

Prudential released its 1st half results recently. Its business performance in Asia is not as good as 2007.

Some Facts (1H 2008 compared with 1H 2007):

• New business APE growth: 14% (2008), 48% (2007). Reason given by Pru: "What's your number?" and variable annuity product were introduced in Taiwan in 2007, contributed to spectacular growth
• New business profit increased by 15% to £336 mil
• Taiwan sales declined by 36% to £97 mil APE
• NB growth in other countries: Indonesia (96%), China (>50%), India (45%), Vietnam (39%)
• IFRS operating profit before tax increased by 28% to £102 mil

Source: Prudential

BBB+ for MNRB Retakaful

Fitch assigns 'BBB+' Insurer Financial Strength (IFS) rating to MNRB Retakaful with stable outlook.

Factors considered for the rating were:

• MNRB Holdings Berhad's ability and willingness to provide support in times of need
• Catastrophe-free Malaysian market - the main focus of MNRB Retakaful's business
• Healthy capitalisation, prudent management
• Limited track record
• Modest size
• Possible execution risks

Source: Fitch