News Digest 20100110-20100116

Insurance News It is TM Asia's turn to say that they want to double their premiums, but this time it seems to be a target set for only Sabah or the most for East Malaysia. The company also wants to be 1 of the top 5 in 2 to 3 years' time mainly through its agency force. http://bit.ly/6BDdfE

TM Asia Life aims to double premium
TM Asia Life Malaysia Bhd, which has embarked on an expansion plan in East Malaysia, hopes to double new business premium with the opening of its new premises in Kota Kinabalu. The company, with a strong ...

Insurance News Vincent Kwo is now COO for MAA. http://bit.ly/8O41Hb

MAA appoints chief operating officer
MALAYSIAN Assurance Alliance Bhd (MAA) has appointed Vincent Kwo Shih Kang as chief operating officer from January 2. Kwo, 49, graduated from City University, London, in 1982 where he obtained a Degree ...

Insurance News AXA Affin does not rule out acquisition to achieve its 8% market share target. Our view is that this may in fact be a more feasible route given that doubling the premiums every year is not an easy task at all. Perhaps AXA should explore with UOB and see whether the latter has intention to sell its insurance units in Malaysia? http://bit.ly/6dFGcH

AXA Affin not ruling out acquisitions, partnerships
AXA Affin Life Insurance Bhd hopes to grow its share of the local life insurance market from 1.5 per cent to 8 per cent by 2012, as it undertakes a AXA global branding exercise.Its chief executive officer ...

Insurance News It is unusual to have an Islamic bank that doesn't have any takaful operations to comment on takaful. OCBC Al-Amin commented that the growth of takaful lagged behind Islamic banking. Great Eastern, which is owned by OCBC, is believed to have applied for 1 of the 2 new takaful licences to be issued this year. GE has also recruited the ex-CEO of Prudential BSN to enhance its chance of getting the new licence. http://bit.ly/6hKEVH

Malaysian takaful growth lags banks
Growth in Malaysia’s takaful Islamic insurance industry has lagged the sharia banking sector as insurers struggle to find a home for premiums and players lack distribution channels, Singapore’s ...

Insurance News AXA Afiin Life needs to double premiums to be top 5 player by year 2012. http://www.actuaries.com.my/news/2010/01/axa-affin-life-needs-to-double-premiums.html

Insurance News: AXA Affin Life needs to double premiums
www.actuaries.com.my
Axa Affin Life has a huge target to achieve by year 2012. It has to grow its market share from the current 1.5% to 8%, to be among the top 5 in the industry. Its NB premium was RM162 mil in 2009, the target set for 2010 is RM320 mil and RM100 mil for total premiums and weighted premiums respectively...

Insurance News Dedicated to all our readers who are insurance agents. http://www.youtube.com/watch?v=ysA-wtl8-YI&feature=autofb

Insurance agent - Bangkok Life advertisement
Bangkok Life Assurance advertisement

Insurance News CIMB Aviva Takaful launched EasyLife Takaful Series and expects to secure contributions of RM35-40 mil. The takaful player aims to increase its market share from the current 2-3% to 5% in 2 years time. There are currently 8 takaful players in the market with 2 new licences to be issued soon. http://bit.ly/6nmFtQ http://bit.ly/6p0TRW http://bit.ly/5Q3TlO

CIMB Aviva aims for 5pc market share
CIMB Aviva Takaful Bhd is looking to increase its market share to five per cent in two years in line with the steady growth of the takaful industry, chief executive officer Muhammad Fikri Mohamad Rawi ...

Insurance News CIMB Wealth Advisors which started distribution for AIA since March 2009 secured RM7.6 mil premium in 2009. It sets a target of RM25 mil for 2010 planning to tie up with more insurers after obtaining its financial advisor licence. http://bit.ly/6ceiyR

CIMB Wealth sees RM25m premiums
CIMB Wealth Advisors Bhd aims to secure RM25 million premium this year from insurance and takaful products, chief executive officer Tan Beng Wah said today.The company managed to secure RM7.6 million premium ...

News Digest 20100106-20100113

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Uni.Asia's distribution strategy

Uni.Asia says it is on multiple distribution strategy and is stronger in alternative distribution than in tied-agency system.

Uni.Asia currently has 4 bank partners and is looking for more bancassurance tie-ups. Products are claimed to be tailor-made after analysing profile of banks' customer base. The market share of the company in regular premium bancassurance products is claimed to be 36%, ranking number 1 in the industry.

The company has also expanded its other sales channels such as telemarketing, direct marketing and worksite marketing.

Source: Business Times

Prudential's NB grew 5%

Prudential Malaysia achieved 5% growth in new business premiums in 1H 2009.

Some figures:

• NB annual premium equivalent (conventional + Takaful): RM285 mil (1H 09) vs RM272 mil (1H 08)
• Agents recruited: 1,635 (1H 09), growth: 29%
• Total agency force > 10,000

Source: The Edge

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

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

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

Mandatory rebates for motor insurance

From July 1, motor insurance can be purchased directly from insurance companies and the commission normally paid to the agents will be mandatorily rebated to policyholders who are the actual owners of the vehicles.

The rebates are:

• 5% in 1st year
• 10% in renewal years

The responses by various parties on the above:

• Agent: livelihood of agents would be affected
• BNM: promote the promulgation of alternative channels
• Federation of Malaysian Consumers Association: agents will have less cross-selling opportunities

Source: The Star

Prudential buys over agents

Prudential Singapore is buying over agents from competitors by offering a 'buy-over' package. Prudential targets to recruit 2,000 agents this year, to grow its existing pool of 3,500 to 4,500 by end of the year.

The 'buy-over' package consists of payment to new recruits an average of their past 2 years' income spread over the next 24 months, in addition to the commission of their new sales. The condition is the new recruits must sell as much as they have done over the past 2 years.

Other industry statistics:

• AIA: current agency force - 4,000, targets to recruit 1,000 this year
• Great Eastern: current agency force - 2,534, targets to recruit 60 to 80 per month

Source: Strait Times

Agents see opportunities in times of crisis

Opportunities are aplenty even during times of crisis. The top agents of Hong Leong Assurance Berhad (HLA) certainly of no doubt about this. Some of the opportunities mentioned and some food for thought for aspiring agents out there:

• Protection is paramount in times of crisis
• Economic downturn is only temporary, financial planning is long-term
• Good time to recruit top-quality agents especially those who are retrenched or can't find a job

Source: The Star