News Digest 20100309-20100320

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News Digest 20100301-20100309

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News Digest 20100223-20100301

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News Digest 20100203-20100223

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News Digest 20100201-20100205

Insurance News RHB Cap wants to increase its stake in RHB Insurance by buying from the other shareholders.

http://bit.ly/d5klaz
RHB Cap talks to buy bigger stake in RHB Insurance
PETALING JAYA: RHB Capital Bhd announced that Bank Negara has no objection in principle for the company to begin negotiations with the remaining shareholders of RHB Insurance Bhd to acquire the remaining equity interest in RHB Insurance not already owned by RHB Capital.

Insurance News Prudential opens its new training academy in Ukay Perdana, KL. Prudential has 11,000 agents, out of which 3,000 are bumi agents. The corresponding figures a year ago were 9,000 and 1,500. Islamic products contributed 15-20% of its revenue.

http://bit.ly/c60nTn http://bit.ly/aG9NT4
Prudential eyes increase in number of agents
PRUDENTIAL Assurance Malaysia Bhd expects to increase the number of agents this year following the opening of its new training academy.Its chief executive officer Charlie Oropeza said in line with the ...

Insurance News EON Bank achieved bancassurance sales of RM105 mil in 2009 and is now targeting RM200 mil for 2010. EON Bank partners Uni.Asia in their bancassurance venture.

http://bit.ly/aFBdGx
EON Bank sets RM200m bancassurance sales target
EON Bank Group, the seventh biggest bank by assets, aims to double bancassurance sales to RM200 million this year on more new products. This is compared to RM105 million sales booked last year, chief executive officer Michael Lor said. ...

Insurance News OCBC given extension until 17/10/2010 to resolve holding 2 GI licences in OACM and Pacific Insurance.

http://bit.ly/9rAqRK
OCBC unit given extension to comply with conditions
PETALING JAYA: Oversea-Chinese Banking Corp Ltd (OCBC) wholly owned unit, OCBC Capital (M) Sdn Bhd, has been granted a one-year extension to Oct 17 by Bank Negara to comply with the two conditions imposed by the central bank for the takeover of PacificMas Bhd, which was completed in April 2008.

Insurance News Great Eastern targets 25% growth this year, to hit RM1 bil NB premium. Emphasis will be on agency, bancassurance and younger population.
1. Agency: recruit more graduates/professionals, Agency Transformation Programme, Go4More - help agents to break their own glass ceiling
2. Bancassurance: tie-up with OCBC
3. Low cos...t products for young population

http://bit.ly/be1DuT
Great Eastern eyes RM1bil in new premiums
PETALING JAYA: Great Eastern Life Assurance (M) Bhd, the country’s largest and oldest insurer, is targeting RM1bil in new business premiums this year.

Insurance News The growth of takaful industry in Malaysia in 2009 is estimated to be 15% on total contribution basis. Main challenge identified by MTA is attracting quality talents.

http://bit.ly/dbqGZk
Takaful industry to see steady growth
THE takaful industry will continue its steady growth momentum this year in line with the expansion of the industry globally which has seen an annual growth rate of 25 per cent the past few years.The industry ...

News Digest 20100124-20100130

Insurance News Etiqa Takaful Bhd appoints Shahril Azuar Jimin as its new CEO. http://bit.ly/cxXiRn

Shahril Is New CEO Of Etiqa Takaful :: Bernama.com

Insurance News The government proposed in GTP for insurers to reduce insurance premiums for cars, motorcycles and houses installed with security features. But surely the motor tariff will have to go in the first place. Right? http://bit.ly/8XTcx5

Five initiatives shortlisted to check crime
The Home Ministry has shortlisted five initiatives to achieve the target of reducing the overall crime index by at least 5% by the end of this year, according to the GTP Roadmap.

Insurance News HSBC Amanah Takaful will launch 7 products this year, focusing on medical and retirement. http://bit.ly/cnBWIG Meanwhile, an insurance survey by HSBC shows that 49% of Malaysians plan to save more in the next 6 months. 58% of the survey respondents are likely to buy products that offer capital protection. http://bit.ly/9L05nT

HSBC Amanah Takaful to launch 7 products in 2010
HSBC Amanah Takaful (Malaysia) Sdn Bhd, the Islamic insurance arm of HSBC Bank Malaysia Bhd, plans to launch up to seven products this year. Chief executive officer Zainuddin Ishak said the company is now focused on traditional long-term plans such as retirement and medical health. ...

Insurance News Zurich Financial now says it wants to have controlling stake in its joint venture in Malaysia but would do it in such a way that all parties are comfortable. Zurich Financial currently holds 40% stake in the JV. http://bit.ly/cF3fXV

Zurich Financial eyes controlling stake in Malaysian venture
DAVOS: Swiss insurer Zurich Financial Services Ltd is exploring ways to take a controlling stake in its Malaysian joint venture and grow its business in Indonesia, its Asia-Pacific head said yesterday. ...

Insurance News Great Eastern denies that it is in talks to sell a stake in Malaysian unit. http://bit.ly/a9hgGR

Great Eastern not in talks to sell stake in Malaysian unit
GREAT Eastern Holdings Ltd (GEH) said it is not in talks to sell a stake in its Malaysian insurance arm, Great Eastern Life Assurance (Malaysia) Bhd (GELM). "We wish to state that we are currently not ...

Insurance News Allianz General is paying profit commission of RM6.26 mil to its qualifying agents (25% of its agency force) before Chinese New Year. http://bit.ly/81tH9B

Allianz pays commissions to agents early
Allianz General Insurance Co (M) Bhd (AGIC) kept its promise for the fourth consecutive year by making an early profit commission payment.In a statement today, AGIC's chief executive officer Ng Hang Ming ...

Insurance News Tokio Marine is targeting a lower growth rate of 10% in 2010 compared with the 20% it achieved in 2009. However, it still expects to outpace the industry's expected growth rate of 6-7%. Prefers non-motor lines of business e.g. fire, marine, cargo and PA. Not ruling out acquisition. http://bit.ly/81WhB0

Tokio Marine expects 10% premium growth this year
KUALA LUMPUR: Tokio Marine Insurans (Malaysia) Bhd (TMIM) expects a premium growth of between five to 10 per cent this year, its chief executive officer Dr Michael Heng Kiah Ngan, said Tuesday.

Insurance News Will Great Eastern divests it stake in Malaysia? How much is the divestment, if any? Is Khazanah the suitor or any other parties? Is divestment a pre-condition of being granted the takaful licence? Would IPO be an option if a direct shareholder cannot be found? This article may shed some light. http://bit.ly/8iwedl

Khazanah said among suitors for Great Eastern
A group of potential suitors, including state-owned investment agency Khazanah Nasional Bhd, is said to have lined up for a stake in Singapore's Great Eastern Life Assurance (Malaysia) Bhd to help realise the insurer's takaful ambition. ...

Insurance News Takaful Malaysia won the Global Diamond Award while its Group MD Hassan Kamil won the "Smart Entrepreneur" Award. http://bit.ly/6YbYwS

Takaful Malaysia, group MD win major awards

Insurance News While many may think that China and India markets are hot, Prudential is scaling back its growth ambitions in both countries. Instead investment would be pushed into fast-growing economies in southeast Asia, including Malaysia, Vietnam and Indonesia. The reason for such decision seems to be the slow relaxation of restrictions on foreign ownership of financial firms in China and India. http://bit.ly/7CJkyf

Prudential to Scale Back on India, China - NYTimes.com
LONDON (Reuters) - Britain's biggest insurer Prudential has begun a shake-up of its Asian business that will see it scale back its ambitions for growth in India and China, The Sunday Times said.

Insurance News LIAM, ACE Synergy and Prudential spoke on 2010 outlook and challenges. http://bit.ly/8H8IxQ

Malaysian insurers in for better times
PETALING JAYA: Despite facing some hurdles, the local insurance industry has a promising outlook with new life business weighted premium forecast to grow 12.5% to RM3.6bil this year.

News Digest 20100117-20100123

Insurance News TokioMarine has promoted Deputy CEO Dr Michael Heng as CEO, replacing PhangKwang Chee who has helmed the top post for the past 9 years. TokioMarine's market share grew from 48th position in 1999 to 5th position last year. http://bit.ly/7AXC0g

Tokio Marine names new CEO
Tokio Marine Insurans (Malaysia) Bhd today announced the appointment of Dr Michael Heng Kiah Ngan as its new chief executive officer.Heng, who was previously the company's deputy chief executive officer, ...

Insurance News Etiqa launches Triple Lifestyle Protector. Features: 15% SA paid every 3 years from 5th policy year; 100% SA returned at maturity; premium payment period of 20 years or until age 85. http://bit.ly/7vkOOd http://bit.ly/8KXxzy

BERNAMA - Etiqa Insurance Jangka Pelan Terbaharu Dapat Sambutan Baik
KUALA LUMPUR, 20 Jan (Bernama) -- Etiqa Insurance Bhd menjangka pelan Triple Lifestyle Protector yang dilancarkan baru-baru ini di mana ia menawarkan pelbagai faedah di bawah satu polisi mendapat sambutan yang baik. ...

Insurance News Prudential is targeting the largely untapped and underserved bumiputera market, focusing on young generation especially those below age 25. Great Eastern has also previously unveiled strategies that include targeting young generation. http://bit.ly/6nHL5D http://www.actuaries.com.my/news/2010/01/strategies-of-prudential-and-great.html

Prudential to tap into growing Bumi market
LEADING life insurer Prudential Assurance Malaysia Bhd wants to tap into the growing Bumiputera market by increasing its Bumiputera agents, said its top executive. Chief executive officer Charlie Oropeza ...

Insurance News Prudential launches an aggressive branding campaign covering 9 markets in the region in 7 languages on "The Power of Listening". http://bit.ly/5XgKaj

The power of listening
PRUDENTIAL Corporation Asia recently launched “The Power of Listening”, its largest branding campaign in its 85-year history in Asia.The campaign reinforces the company’s “Always Listening. Always Understanding” ...

Insurance News Tune Money aims to double insurance policies sold to 3,000-4,000 this year. Currently it partners Multi-Purpose for motor insurance and Tokio Marine for PA and home insurance. Takaful is in the pipeline as well as H&S, life, travel and pets. http://bit.ly/8Ne1wd http://bit.ly/5kaKoB

Tune Money aims for RM4m net profit this year
ONLINE financial services provider Tune Money Sdn Bhd, which has been profitable since last April, aims for a net profit of up to RM4 million this year as it grows its prepaid card and insurance base. ...

Insurance News Zurich Financial has come out to clarify that the partners in MCIS Zurich are still keen to work together although admitting some of the facts reported earlier on the tension in the relationship were not wrong. Zurich Financial is also not selling its stake in MCIS Zurich. http://www.actuaries.com.my/news/2009/12/no-strained-ties-between-shareholders.html http://bit.ly/7Guc11

MCIS Zurich owners deny rift, remain keen on takaful ops
MCIS Zurich Insurance Bhd's major shareholders have denied that there is any rift between them and say they remain keen to build the business together. They also denied that Switzerland's largest insurer, Zurich Financial Services Ltd (Zurich FS), might sell its shares in MCIS Zurich. ...

Insurance News Allianz General launched a Directors' and Officers' liabilities insurance product. http://bit.ly/54HdEh

Allianz debuts product for corporate leaders
Allianz General Insurance Company (Malaysia) Bhd (AGIC) today launched a new generation of insurance protection, specially tailored for leaders of Malaysian corporations."Allianz Protect Platinum goes ...

Insurance News MFPC launches Syariah RFP programme, appoints MPM as examination facilitator. http://bit.ly/6MHuhm

Insurance News Takaful Ikhlas is the winner of best brand in the services -Islamic protection and the healthcare insurance categories. http://bit.ly/7TIDUk

Takaful wins Brand Laureate awards
TAKAFUL Ikhlas Sdn Bhd has won two awards at the BrandLaureate SMEs Chapter Awards 2009 for brands in corporate branding. It was named the best brand in the services -Islamic protection and the healthcare insurance categories. ...

Prudential buys UOB Life

Prudential will pay S$428 mil to buy UOB Life. As part of the deal, United Overseas Bank (UOB) will also sell Prudential's life, accident and health insurance policies for 12 years at the bank's branches in Singapore, Indonesia and Thailand.

What will happen to Uni.Asia, which UOB also has a stake in?

Source: The Edge Singapore

News Digest 20091116-20100106

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Strategies of Prudential and Great Eastern

With liberalisation announced last year, the top 2 life insurance players are strategising for 2010 and beyond:

Prudential

• Expand bumiputera agency force, capitalising on its takaful licence
• Agents to become wealth planners, provide advice based on needs and risk profile of clients
• Expand bancassurance with the right partners
• Grow investment-linked business

Great Eastern

• Improve professionalism, leadership and selling skills of agents
• Grow bancassurance following tie-up with OCBC post liberalisation
• Target younger population and new entrants to job market

Source: The Star

Findings from Retire-Meter

Findings from Prudential Retire-Meter:

• 9% respondents have clear idea how much is needed for their retirement
• 65% expressed concern of not having enough money to live through retirement
• >50% would retire as soon as reaching financial independence
• 75% would start savings for retirement now if knowing the amount required for retirement

Source: Business Times

News Digest 20091105-20091116

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Prudential's strategies

Prudential's new CEO has made known his strategies going forward:

On distribution:

• Builds its telemarketing reach, possible tie-up with telcos
• Looks for more bancassurance partners, current sole partner is Standard Chartered
• Continues to expand its agency force (currently 10,300)
• Turns more agents to wealth planners (1,800 as at Dec 2008)

On product strategy:

• Relook at traditional products

On customer service, focus on 5 key service points:

• Application is made
• Policy is issued
• Bill is issued
• Policy request is made
• Claim is made

Source: Business Times

UOB Life to be sold

United Overseas Bank plans to sell UOB Life and Prudential and Manulife are interested. The sale could raise US$500 mil.

Source: The Star, Business Times

Charlie's interview with press

Prudential's CEO Charlie E. Oropeza was interviewed by The Star. Some of the points mentioned in the interview:

• Liberalisation: widen penetration, greater competition, encourage innovation
• Bancassurance: complementary rather than competing
• Consumer awareness on importance of insurance still has room to improve
• Prudential's strategy on agency force: solutions providers, not product pushers

Source: The Star

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

Charlie's appointment approved

Charlie Oropeza's appointment as CEO of Prudential has been approved by BNM on 11 August 2009.

Earlier post: Charlie to become Prudential's CEO

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

ASM Actuarial Idol

ASM held its first ever Actuarial Idol Singing Competition in conjuction with its 31st Annual Dinner yesterday at Grand Millennium hotel in Kuala Lumpur.

The event was attended by 170 members. 9 groups participated in the Actuarial Idol Singing Competition. The President and the Immediate Past President were invited as the judges for the competition. However, their scores carried only 50% weightage on the final results, the other 50% was dependent on the audience response. It was no surprise to see strong support groups mainly comprising the fellow colleagues of the competition participants making loud noises during the final moment before the results were finalised.

The Actuarial Idol competition was won by Isaac Chiew from Watson Wyatt, with 2 ladies from Prudential and the trio from Great Eastern winning the 2nd and 3rd places respectively. It was a night full of fun, who dare to say that actuaries are a bunch of boring people!

Earlier that afternoon, Surinderpal Singh and Jefferey Zain each presented a professional paper to the members, one on Genetic Underwriting and the other one on Takaful.

During the dinner, ASM also paid tribute to Benny Ng, a fellow actuary who passed away in April this year.

More photos

Videos:

1. Isaac Chiew - My Way


2. All Contestants

Brought to you exclusively by TAS Search, your friendly actuarial recruitment agency

PRUhealth

Prudential launched its new medical insurance plan - PRUhealth.

Some product features:

• Rider to investment-linked plan
• Covers hospitalisation, surgeries and outpatient treatments
• Coverage up to age 100
• No claim bonus of up to RM500 per year, withdrawn as cash or invested as extra units in ILP
• Annual claims limit can be waived with additional premiums

Prudential has allocated RM7 mil for its advertising campaign on PRUhealth.

Source: The Star

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

How did GE and Prudential stake up in Q1 2009?

Prudential has announced its results in Malaysia for Q1 2009 through Bernama. Its NB sales in Q1 2009 grew 17% compared with Q1 2008. This is different from 60% as reported in Prudential's website.

APE for both insurance and takaful sales for Q1 2009 was RM122 mil, for Q1 2008 it was RM105 mil.

GE reported APE for Q1 2009 of RM170 mil. Prudential advertised that it had attained the top position in Malaysia early in the year. LIAM subsequently denied that it issued any public information on the ranking of life insurance companies.

Source: The Star, Business Times

Prudential's 2009 Q1 Results

Highlights of Prudential's 2009 Q1 results:

• Sales was down 5% groupwide compared with 2008 Q1
• In Asia, sales was down 11%, regular premiums declined 2%, single premiums decreased 72%
• Linked business was 40% (2009 Q1) and 62% (2008 Q1) of total APE

In Malaysia:

• Achieved APE of £24 mil, up 60%, premiums for protection benefits was 50% of APE
• 500 new agents added
• APE per active agent increased 10%

Source: The Star, Prudential

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

Insurance cover for HIV-positive

PruProtect, a joint venture between Prudential and a South African firm, is offering life insurance cover for HIV-positive people in UK.

The sum assured is up to £250,000 for a maximum term of 10 years.

Not all HIV-positive people will be able to get cover, initially the target is 7% of these people. In the near future, this will move up to 20%.

Source: Telegraph

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

Insurers to cut bonuses

Policyholders in Singapore can expect their bonuses on endowment and whole life policies to be cut following a dismal investment performance in 2008.

Company that have decided to cut: Great Eastern
Company yet to decide: AIA
Companies declined to comment: Prudential, NTUC Income, Manulife
Company not cutting: TM Asia

Source: Asiaone

Prudential to change CEO

Prudential's chief executive, Mark Tucker, will step down in September 2009, to be replaced by the CFO, Tidjane Thiam.

Meanwhile, Prudential's new business profit in Asia grew 15% to £741 mil in 2008.

Source: Insurance Daily

AIA to be split from AIG

AIA will be separated from AIG and put into a specially created separate legal entity, subject to regulatory approvals.

In a move to convince policyholders, AIA announced that it had a solvency ratio on a pro forma basis of >200% of regulatory requirements as of 30/11/2008 and with A+ rating from S&P.

Other statistics on AIA across 13 Asian markets:

• >US$60 bil assets under management
• >250,000 agents, >52,000 agents recruited in 2008
• 20,000 employees
• 20 mil customers

Meanwhile, 2 bidders (Prudential and Manulife) for AIA bidded well below AIG's target of US$20 bil. AIG will consider an IPO.

Source: The Star

Bid for AIA closes on Friday

The 1st round of bidding for AIG's business in Asia closes this Friday. Apparently there are 3 parties that are interested: Temasek, Manulife and Prudential. Bank of China and HSBC have apparently dropped out. It was reported that Prudential may not be able to meet the Friday deadline.

AIG has also changed their mind and would now consider selling more than 49% of its stake in AIA, effectively surrendering the control to the successful bidder.

The whole stake of AIA is valued at US$20-30 bil.

Source: CNN Money, Reuters, The Star

Has Prudential overtaken Great Eastern?

Prudential claimed that it had attained the top position in the Malaysia life insurance market. It captured RM659 mil new business weighted premium, compared to RM606 mil in 2007. The figures apparently include the sales figures of Prudential BSN Takaful.

Great Eastern, the leader in conventional business, does not currently have takaful licence.

Source: Business Times, Prudential

Prudential disposes Taiwan's business

Prudential Taiwan is selling its agency business to Taiwan's China Life, and in turn Prudential will invest in 10% stake in China Life. Prudential is keeping bancassurance and telemarketing business in Taiwan.

Source: Reuters

Prudential's CEO resigns

Prudential's CEO in Malaysia, Bill Lisle has jumped ship to become a regional director with Aviva Asia.

Bill became Prudential's CEO in April 2008.

Source: Business Times

Strategic investors for AIA Malaysia

AIG may seek strategic investors for its Malaysian life insurance unit. Prudential is monitoring AIG's disposal programme and is interested in China, Hong Kong, Japan and Malaysia.

Source: Business Times

Prudential's interview with The Star

Some of the points raised in Prudential's interview with The Star are listed below:

• Consumer confidence is impacted and expected to recover in 3 to 6 months' time.
• Insurance industry is recession-proof.
• No drastic increase in cancellation rate at Prudential.
• Prudential has successfully switched to RBC on 1.1.2009.
• Key strategies: brand promise, transformation of agency force to wealth planners, innovative products.
• Strategic alliances more likely than M&A in the industry.

Source: The Star

PRUmultiple Crisis Cover

Prudential launches it multiple crisis cover product this week and expects the plan to contribute 10% of its new business premiums by the end of next year.

Product Features:

• Multiple claims of up to 3 critical illnesses
• Coverage of 2 instances of cancer
• Protection against death and disability
• Premium is 20% higher than its conventional plans
• PRUwaiver can be attached to waive premiums on diagnosis of first critical illness
• Critical illnesses are categorised into 6 groups
• Once a claim is made from a particular group, the group is excluded from future claims

Source: The Star

Ng Keng Hooi Joins Great Eastern

Prudential's former chairman for Malaysia Ng Keng Hooi has taken up a new role in Great Eastern Singapore as the group CEO effective 1 December 2008. He took over from Tan Beng Lee, 65, who retired recently.

Source: The Star

Reasons for Pru's Double-Digit Growth

Prudential enjoyed a double-digit growth in total new business premiums for the 1st 9 months of 2008 compared with the corresponding period in 2007. The reasons cited by Prudential are:

• Transformation of agency force to wealth planners
• Leveraging on technology, especially PRUway, a point-of-sales system
• Aggressive branding: "The Face You Can Trust"

Source: The Star

PRUretirement Accumulator

Prudential launched a regular premium investment-linked product designed for retirement named PRUretirement Accumulator.

Product features:

Accumulation Phase

• Term of 5 to 40 years
• Minimum premium per month: RM100
• Withdrawal is allowed
• Top-up is allowed

Payout Phase

• Guaranteed monthly income
• Withdrawal is allowed
• Top-up is allowed?
  

Death and TPD cover is avaliable. Earlier this year, Manulife also launched an investment-linked retirement product call Secure Income Plus.

Meanwhile, Prudential UK has announced 5 to 10% cut in its maturity bonus.

Source: Bernama, Telegraph

Prudential has twice the capital required under RBC

Prudential has twice the solvency capital required under RBC. It also achieved 39% new business growth in Q3 2008. For 1st 3 quarters in 2008, new business sales went up 20%.

While consumer confidence will be affected with the recent financial turmoil, Prudential is confident that it can weather the crisis due to its strong corporate governance and risk management.

Source: Business Times, The Star

Prudential Retire-Meter 2008

Some of the findings from Prudential Retire-Meter 2008:

• 40% Malaysians felt the need to continue working after retirement due to insufficient retirement fund
• 36% of people were less confident about their retirement compared to last year
• 81% said inflation had gone up and affected their lifestyles
• 72% said they saved, 77% of this 72% invested in low-yielding savings vehicles
• 41% did not know how much was enough for retirement
• 64% did not separate retirement savings from other savings

The survey was based on 1,024 Malaysians from key urban centres in both East and West Malaysia, with a monthly household income of at least RM3,000.

Source: Business Times

Prudential to acquire AIA?

Prudential apparently is in talks with investors in the Middle East and Asia to raise capital to buy parts of AIG's operations in Asia. It is estimated that this will cost US$15 bil.

We reported earlier that AIG wanted to retain a majority interest in the AIA companies. If this is still the case, it would be very surprising for Prudential to take a minority stake. Prudential is already present in most markets along side with AIA, and most regulators will not allow a company to hold 2 insurance licences in the same market.

The remaining possibility is there is a change in mind in AIG, they may now want to sell off some AIA's units to repay the loan from the Fed. If this is the case and Prudential turns out to be the successful bidder, we will see Prudential replacing AIA as the largest insurance player in Asia.

Source: Telegraph

Insurance Shares Fell Sharply

Shares in ING, Prudential and Aviva slided recently as a result of market turbulence.

In UK, share prices of Prudential and Aviva fell sharply. There are indications that the Financial Services Authority (FSA) may ease the capital requirement of UK insurers with writedowns in their investment portfolios.

In Netherlands, ING reported Q3 losses of around US$670 mil, due to US$2.7 bil in various investment losses, write-downs and bad loan provisions. The ING shares fell significantly.

Source: Insurance Daily, The Star

Prudential's 1H Results

Prudential released its 1st half results recently. Its business performance in Asia is not as good as 2007.

Some Facts (1H 2008 compared with 1H 2007):

• New business APE growth: 14% (2008), 48% (2007). Reason given by Pru: "What's your number?" and variable annuity product were introduced in Taiwan in 2007, contributed to spectacular growth
• New business profit increased by 15% to £336 mil
• Taiwan sales declined by 36% to £97 mil APE
• NB growth in other countries: Indonesia (96%), China (>50%), India (45%), Vietnam (39%)
• IFRS operating profit before tax increased by 28% to £102 mil

Source: Prudential

Partnership with Standard Chartered Extended

Prudential has extended its bancassurance partnership in Asia with Standard Chartered to 2016.

Other details:

• The markets covered has been broadened to include Japan and Thailand in addition to the original Hong Kong, Singapore and Malaysia.
• New products now included in the partnership: A&H aand Takaful products.
• A separate partnership agreement between the two companies covers 3 other countries: China, Taiwan & Korea.

Source: Investment Week

PRUway

Prudential targets to equip 1,000 of its wealth planner with customised laptops co-branded with Dell, loaded with PRUway software, enabling them to do transactions while on the move.

PRUway software is able to recommend a suitable financial solution for clients after evaluating their financial data. Prudential invested RM12 mil in the notebooks with RM3.4 mil in the costs of hardware and a large percentage of the balance in development of PRUway.

Another 1,000 wealth planners will be equipped with the notebooks in 2009. The eventual target is 5,000 over the next 3 to 5 years.

New product in pipeline: Pru-Cash Premier, a 10-year pay product.

Source: The Star & Business Times

Transforming Agents to Wealth Planners

Prudential is in the process of transforming its agents to wealth planners. The wealth planners are similar to financial advisers in that they would assess a customer's financial position and risk profile before recommending a product.

There will be 3 categories of wealth planners: premier, executive and senior, according to the skills, competence and production level.

Prudential currently has life insurance, general insurance, unit trusts, takaful, will and trust services under its brand.

A point-of-sales technology would be launched in July to assist the wealth planners.

Source: The Star

Medical Product with NCD

Prudential may roll out medical products with No Claim Discount (NCD) in Malaysia. There are also 2 to 3 new retirement products in the plan.

The Company will also spend RM2 mil in rebranding, with a 10-week campaign themed "The Face You Can Trust".

Some facts/statistics/strategies:

• New business annual premiums: RM606 mil (2007) vs RM496 mil (2006), growth rate: 23%
• Market share: 21% (2007), 19% (2006)
• Build other distribution channels: direct marketing, online technology and bancassurance
• Agency force 9,000 (current), 14,000 (2010)

Source: Business Times

News in Brief

1. Prudential and Bank AlJazira in joint venture to conduct takaful business in Saudi Arabia. More >>
2. Takaful Ikhlas provides Group PA cover for 104,480 Rukun Tetangga members and paid out RM400,000 claims so far in 2 years. More >>
3. Axa Affin Life launched an online game on balancing wealth and quality of life, with top prize of RM50,000.

Prudential's New CEO

William (Bill) Lisle will be Prudential Assurance Malaysia Bhd (PAMB) new CEO by end of April, apparently pending BNM's approval.

Bill will replace Tan Kar Hor who has been transferred to head Prudential Group's China life insurance business.

3 years ago, Bill was PAMB's general manager of business distribution.

Source: Business Times