HLA has new CEO

HLA has promoted Loh Guat Lan from COO to CEO, replacing Charlie Oropeza who has earlier joined Prudential Malaysia as CEO.

Guat Lan is believed to be the 2nd lady CEO in life insurance industry in Malaysia after Dr Nirmala.

Statistics on HLA:

• Gross premium growth: 17.8% (FY 6/08 to FY 6/09)
• NB growth (CY 07 to CY 08)
• Regular premium: 41.7%
• Total premium: 17.7%

Source: Business Times, The Edge

HLA Cash Builders

HLA last week launched HLA Cash Builders, targeting RM150 mil in 6 months. Since its soft launch last month, the product has collected RM10 mil premium.

Product features:

• Participating endowment
• Covers death and TPD
• Premium payment period: 6 or 10 years
• Term: 25, 25, 30 and 35 years
• Entry age: 1 month to 60 years
• Maximum maturity age: 80 years
• Minimum premium: RM2,500
• Minimum SA: RM10,000
• 4 Builder riders (can be mixed and matched to produce up to 20% yearly guaranteed income or 5 times basic SA)
• Builder 1: guaranteed 1% payable from year 1
• Builder 2: guaranteed 2% payable from year 5
• Builder 3: guaranteed 3% payable from year 10
• Builder 4: guaranteed 4% payable from year 20
• Dividends (non-guaranteed): cash, terminal and maturity

Source: The Star, The Edge, Business Times, TAS Research

Hong Leong Endowment Plus

HLA launched Hong Leong Endowment Plus with the following features:

• Participating endowment
• Limited pay: 5 or 8 years
• Cash dividends (after limited payment period):
• Guaranteed: 5% of SA
• Non-guaranteed: 2% of SA
• Maturity
• Guaranteed: 100% SA
• Non-guaranteed: terminal dividend
• Term: 15, 20 or 25 years
• 100% SA on death and TPD
• 200% SA on accidental death
• Entry age:
• Minimum: 30 days
• Maximum:
• 60 years (term 15 & 20)
• 55 years (term 25)

Source: Business Times, TAS Research

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

HLA to negotiate with Mitsui on strategic partnership

HLA has obtained BNM's approval to commence negotiation with Mitsui Sumitomo Japan towards a potential strategic partnership.

Source: The Star, Business Times

Charlie to become Prudential's CEO

HLA's group MD & CEO Charlie E. Oropeza is tipped to be Prudential's next CEO. Charlie's last day with HLA is believed to be at the end of May.

Prior to joining HLA on 11/7/2007, Charlie was the CEO of Prudential Vietnam and Indonesia.

Source: The Star

RM50 mil target for Perfect Series

HLA is targeting RM50 mil premium for its Perfect Series product for 2009.

The company achieved 45% growth in its regular premium business up to end of April.

Source: Business Times 1 & 2, The Star

Hong Leong Medi Saver

HLA has launched Hong Leong Medi Saver, to be distributed through Hong Leong Bank.

Product features:

• Medical and surgical plan
• Offers guaranteed renewal until the age of 99
• Annual limit of up to RM240,000 & lifetime limit of up to RM1.2 mil
• Provides daily cash if hospitalised for outpatient cancer treatment, outpatient kidney dialysis treatment and emergency evacuation and repatriation
• 4 plans to choose from
• Entry age: 1 month to 60 years old
• Premium from RM114 per year

Source: Business Times

Rationalisation of insurance arms

The disposal of HLTMT as per our earlier post is part of the bigger picture of rationalisation of the equity holdings in insurance/takaful companies by Hong Leong Group. The ultimate aim is to park everything under HLAH.

In addition to the corporate exercise as per our earlier post, the following will also occur:

• HLA currently has an indirect wholly-owned subsidiary: Hong Leong Insurance (Asia) Limited, or previously known as Dao Heng Insurance Co., Ltd which undertakes general insurance business in Hong Kong. This will be moved to be directly under HLAH
• The 10% of HLTMT currently owned by HLA will also be moved to HLAH

The proposed rationalisation is expected to be completed by Q2 2009.

Source: Bursa

Hong Leong Bank to dispose of HLTMT

Hong Leong Bank (HLB) is selling its 55% stake in Hong Leong Tokio Marine Takaful (HLTMT) to HLA Holdings Sdn Bhd (HLAH) for RM53.67 mil. The original cost of investment is RM55 mil. The proposed transaction value is based on the net assets of HLTMT as per audited account at 30 June 2008.

Some background information on the structure of the group:

• Hong Leong Financial Group Berhad owns 64% of HLB, 100% of HLAH and 100% of Hong Leong Assurance Berhad (HLA)
• Current shareholders in HLTMT are: HLB (55%), HLA (10%) and Tokio Marine & Nichido Fire Insurance Co., Ltd (35%)

Source: Bursa

HLA's Perfect Series

HLA launched its latest investment-linked products - the Perfect Series packages.

There are 3 main features:

• Perfect Education
• Perfect Protection
• Perfect Retirement

We stand to be corrected but based on the limited information available, these look like normal ILP packaged differently to suit different target groups. Most insurers in town would have something similar available.

Source: The Star

Teras Malaysia Extra

NIAM launched Teras Malaysia Extra on 9 February 2009, targeting RM20 mil premiums this year. The earlier version, Teras Malaysia was launched in 1998, generated RM222 mil premiums from 236,000 policyholders.

The product is sold by AMLife, Etiqa, HLA, MAA and MCIS Zurich.

Product Features:

• Term with 100% refund of premiums
• Death: 100% SA
• TPD: 100% SA (up to age 54), max limit: RM1 mil, payment: 20%/80%
• Accidental death: 200% SA (up to age 65)
• CI: RM10,000, covering 36 CIs
• Daily hospital allowance: RM50/day, up to 45 days per year, lifetime limit: 300 days
• Funeral expenses: RM2,000
• 4 different terms: 15, 20, 25 and 30 years; premium payment term = policy term
• SA: min: RM50,000, max: subject to u/w
• Payment mode: Annual, Semi, Quarterly and Monthly
• Min entry age: 16 next birthday
• Max maturity age: 70
• Sample premium: Male age 30, term 30, SA: RM100,000, annual premium: RM1,896

Source: The Star, TAS Research

No concrete merger plan for HLA yet

HLA confirmed that it was not in talks with Tokio Marine & Nichido Fire Insurance Co. on potential disposal of stake to the latter. HLA's capital adequacy ratio was also comfortably above 130%.

However, HLA would consider strategic tie-up and had been approached by several companies although nothing was concrete.

HLA is targeting 3% gross premium growth for FYE June 2009.


Source: Business Times 1 & 2, The Star

Stake in HLA to be sold?

Hong Leong Financial Group Bhd does not rule out "strategic partnership/alliance options with potential partners that could assist HLA to expand and grow its business".

It was earlier reported that HLFG was planning to sell a stake in HLA to a well capitalised foreign company. Tokie Marine & Nichido Fire Insurance Co Ltd was rumoured to be a potential partner.

Source: Business Times, Bursa

Extending coverage for landslide is advisable

Various industry players including those from Allianz, Hong Leong and PIAM are urging customers to consider including coverage for landslides and landslips in their insurance policy. The additional cost is 0.075% of the sum insured.

Insurers and agents also need to play the role of keeping their customers aware of the available coverage.

Source: The Star

Writ of Seizure and Sales against HLA

Hytex Integrated Berhad has obtained a Writ of Seizure and Sales against Hong Leong Assurance. The claimable amount is RM30.4 mil plus 8% interest. The amount is for a disputed fire insurance claim.

Hytex is a sports goods manufacturer for international brands such as Nike and Puma.

Earlier it was reported elsewhere (not this blog) that the office of HLA was "seized and sealed" which was inaccurate.

Source: Bursa 1 & 2, Sinchew 1, 2, 3 & 4

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

Insurance Companies Strategies in Facing Crisis

How are insurance companies in Malaysia handling the current financial crisis?

Allianz Malaysia Bhd

• Tapping on group's worldwide best practices: underwriting, claims, investment, IT etc
• Streamlining both general and life businesses
• Prudent investment strategy backed by well defined investment mandates, guidelines and limits

Manulife

• Have good risk management system and practices in product design, investment management and asset liability management
• Strict criteria in evaluating both fixed income and equities investment

Hong Leong Assurance

• Well diversified investments
• Minimum exposure to equity market, mainly in sound dividend-yielding stocks
• No exposure to collateralised debt obligations
• Investments mainly in local market

Source: The Star

HLA Promise Looks Promising

HLA has given assurance that it is not affected by the current financial crisis as almost all its assets are locally invested.

HLA's new product, HLA Promise, has also exceeded RM50 mil in annualised premium in less than 3 months.

Source: Business Times

HLA's Strategies

Hong Leong Assurance Bhd (HLA) has come up with strategies to strengthen its life and general insurance businesses:

• Distribution: Increase number of quality agents, more comprehensive training programmes. Leverage on Hong Leong Bank for bancassurance and introduce insurance specialists in bank by early next year.
• Products: Innovation. Premier Cash, AUD Guaranteed Income Savers Plan and HLA Promise had done well.
• Enhancement of customer experience: Continue to improve systems and procedures
• Strengthen personal lines of GI: Focus on PA, home fire and content to increase underwriting profits

Some statistics:

• Market share: Life (6.3% ), General (4.4%)
• Rank: Life (6th), General (7th)
• Agency: 4% of industry agency force
• Life regular premium: RM140 mil compared with RM77 mil a year earlier
• GI underwriting profits: RM20.8 mil (FY2008) vs RM14.8 mil (FY2007)

Sourcve: The Star

FY 2008 Results - Hong Leong Assurance

For the FY June 2008, Hong Leong Assurance (HLA) posted a lower pre-tax profit of RM105.7 mil, compared with RM117.5 mil in FY 2007. HLA attributed the results to the poor market performance.

Other facts:

• Revenue: RM1.49 bil (2008) vs RM1.43 bil (2007), growth: 4%
• Gross premium: RM1.21 bil (2008) vs RM1.17 bil (2007)
• Life gross premium: RM782.1 mil (2008) vs RM740.1 mil (2007), growth: 5.7%
• General gross premium: RM425.8 mil (2008) vs RM433.4 mil (2007). Reason: tighter risk management, better underwriting profit.

Business performance/strategies:

• Overwhelming response to new product: Premier Cash
• Increase life agency force from 3,000 to 4,000 in FY 2009
• Distribution: to leverage on Hong Leong Bank's wide network of branches

Source: Business Times

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

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

Hong Leong Bank Offers Cancer Protection Plan

Hong Leong Bank Berhad (HLB) launched Hong Leong Cancer Protection Plan (HLCPP) and expected 1,500 to 2,000 cases in the next 12 months.

HLCPP has 3 different packages and is underwritten by Hong Leong Assurance Berhad (HLA). The product is a non-par plan that provides cancer cover from early to advanced stage.

Hong Leong targets RM250 mil in both conventional and takaful insurance premiums this year.

http://biz.thestar.com.my/news/story.asp?file=/2008/3/14/business/20640519&sec=business