Industry New Business Statistics

The general insurance industry grew 3.2% in 2008 recording RM10.5 bil gross direct premium, contributed strongly by the non-motor sector.

Other industry statistics:

• Medical & health grew 16.7%
• Liabilities grew 10.5%
• PA grew 9.2%
• Life insurance NB annual premium equivalent: RM7.2 bil (2008), RM7.6 bil (2007)
• Ordinary life: 18.6% growth

Source: The Star

Treat customers fairly in bonus reduction

Several insurance companies in UK have cut bonuses lately due to the weak investment performance, falling asset values and low interest rates:

• Friends Provident: cut up to 20%
• Norwich Union (owned by Aviva): cut up to 15%

Market Value Reductions are also applied to surrender values.

FSA has reminded insurance companies to treat customers fairly in the bonus reduction.

It is likely that some insurance companies in Malaysia will also reduce bonus rates in this round of bonus declaration.

Source: Insurance Daily

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

Strong Q1 Performance by Singapore Life Insurance

Singapore life insurance industry posted a very strong growth of 52% in Q1 2008.

• SP NB sales: $2.755 bil (Q1 2008) vs $1.790 bil (Q1 2007), Growth: 54%
• AP NB sales: $238 mil (Q1 2008) vs $160 mil (Q1 2007), Growth: 48%

Contributions by distribution channel:

• Tied agency: 66%
• Bancassurance: 26%
• Licensed financial advisers: 5%
• Others: 3%

It was not mentioned in LIA's press release what contributed to the strong growth. If you can shed some light, please post your comments below.

Source: LIA

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

AXA Affin to Launch Bancassurance with Affin Bank

The Star reported that AXA Affin would launch bancassurance with Affin Bank by August 2008. Affin Bank has 82 branches in Malaysia. AXA Affin is also in negotiation with other banks for bancassurance venture.

http://biz.thestar.com.my/news/story.asp?file=/2008/3/14/business/20640782&sec=business

AXA Affin would also retain and strengthen its agency force.

AXA Affin currently has offices in Kuala Lumpur and Johor Bahru and 4 new branches will be opened soon in Penang, Petaling Jaya, Sibu and Kuching.