Industry outlook by LIAM

LIAM expects new business to grow at 17% and 12.5% for year 2009 and 2010 respectively. 2010 should see introduction of micro insurance and annuity products to take advantage of tax relieves announced in the Budget.

With the completion of FSMP in 2010, further liberalisation would be seen in areas such as:

• allowing insurers to distribute other personal financial service products
• removal of caps on operating expenses
• granting of new licences for innovative players

The liberalisation measures announced in 2009 are expected to result in:

• more bancassurance partnership
• opening of more branches
• higher foreign equity holding
• application of the 2 new takaful licences

Source: Business Times 1 & 2

Budget 2010: Responses

LIAM:

• Micro insurance: insurance not only for high-income earners; will work with authorities to launch the scheme
• RM1,000 tax relief on annuity: by 2020, 10% of population age >60 years; investment income earned in annuity fund should be tax free.
• Insurance penetration rate will improve, currently 41%

Source: LIAM

PIAM:

• Restructuring of motor insurance cover for 3rd party liabilities is necessary
• Lead to ultimate deregulation and liberalisation of motor and fire tariff

Source: Business Times

EPF:

• 1Malaysia Retirement Scheme will benefit 2 mil self-employed and non-wage earners
• Only 18% of 5.72 mil active members have enough savings to finance their retirements
• 40% of active members chose to contribute at 8% instead of 11%

Source: Bernama

Insurers are cut off from EPF pension scheme

Insurance companies will not be involved in the proposed EPF pension scheme. The scheme will be managed by EPF.

The proposal for such a scheme will be ready in 4 months' time.

The proposed scheme would be compulsory for new members, for existing members, it is optional. There will be health benefits in the proposed scheme. Pension payments will be linked to last-drawn salary.

Source: The Star

Earlier stories:

Pension scheme for private sector employees

Views on EPF Pension

Pension scheme for private sector employees

The Human Resources Ministry is drafting a working paper for the Finance Ministry on a pension scheme for private sector employees. The aim is to ensure EPF savings last a lifetime.

The working paper would be ready in the next few months.

Source: The Star