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

Views on Premium Rebates

Various parties have come forward to express their views on premium rebates:

Fomca

• Welcome BNM's move
• Want the rebate to be extended to life policies as well

NUBE

• In the long run detrimental to consumers, agents and insurance industry
• Agents play a role especially in reaching to the remote areas
• Will cause a huge unemployment problem

PIAM

• Trend is towards diversification of distribution channels
• Increasing demand for agents who could offer a comprehensive financial advisory package
• Customers who are comfortable with and appreciate the services provided by agents will continue to deal through agents

Lonpac

• Agents not affected if they provide good service and are familiar with their products
• Agents can assist in handling claims

Source: Business Times, The Star 1 & 2

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