No change in voluntary cessions

Malaysian Reinsurance Berhad has received confirmation from BNM that the Voluntary Cessions (VC) levels in 2010 would remain the same as 2009. Specifically:

1. VC on Motor, PA, H&S: 4% quota share, no cession limit
2. VC on other classes: 5% quota share, no cession limit
3. Auto-Facultative and Auto-Treaty: 15% VC. Retrocessions: 20% VC

For years 2011 and 2012:

1. 4% revised to 2.5%
2. 5% remains
3. 15% and 20% remain

Source: Bursa

Main points of Governor's Keynote Address

Main points related to the insurance industry in the Governor's Keynote Address at the 21st Federation of Afro-Asian Insurance and Reinsurance Conference:

• The insurance industry has remained resilient throughout the current financial crisis
• Maintaining strong capital buffers and sound risk management is imperative to ensure the continued resilience of the insurance industry especially the domestic and external conditions are expected to remain volatile
• Insurance and pensions will have a greater role especially with the ageing population
• Prospects for higher insurance penetration rate: in 2008, Asia (5.95% of GDP), Africa (3.57%) compared with America (7.29%) and Europe (7.46%)
• The demand for investment-linked and wealth management products are strong with changing priorities of the young workforce in the middle income group
• Insurers need to strategise to increase the accessibility of insurance products e.g. through bancassurance and internet
• Public-private partnership between Government and the insurance industry are needed to cope with catastrophe losses
• High growth in Takaful: between 2004 and 2007, the average annual growth rate of the global takaful industry is estimated at 25%, compared to 10.3% for conventional insurance
• More integrated approach to the prudential regulation of the insurance industry together with the other segments of the financial sector, such as the one practised in Malaysia, enables the regulator to form a more complete assessment of the risks to financial stability while ensuring consistency in the treatment of risks across the different industries

Source: BNM

Hannover Re targets 15% growth

Hannover Re Malaysia is targeting 15% growth in premiums this year. The markets in Malaysia and Thailand are seen to be driving the growth with the industry moving towards more traditional protection products.

Hannover Re Malaysia covers Asean, Pakistan and India.

Source: Business Times

Multi-Purpose teams up with Tune Money

Multi-Purpose Capital Holding Berhad and Tune Money Sdn Bhd have proposed to incorporate a company in Labuan. The company may conduct reinsurance business. The initial paid-up capital would be RM500,000, 80% contributed by Tune Money and 20% by Multi-Purpose.

Source: Bursa Malaysia

Hannover Re's Staff Died in Mumbai Attack

Hema Kasipillay, a Hannover Re's underwriter based in Kuala Lumpur, who had been missing since terrorists stormed the Taj Mahal Palace and Tower Hotel on Wednesday night, has been found dead in her room on level six of the hotel.

The postmortem revealed that she had died of smoke inhalation. Hema was in Mumbai to attend a conference. She was with 2 German colleagues who were evacuated. One was holed up in his hotel room for 13 hours before being rescued. The other one was at the business centre on the ground floor and was rescued after 6 hours.

It was Hema's 1st official trip to Mumbai. According to Ravinder Singh, Hannover Re's Deputy General Manager for South and South East Asia, he was in contact with Hema thru text messages for several minutes after the gunmen stormed the hotel. The line was cut off subsequently.

Source: The Star, iReport

Munich Re Wants to Increase Rates

I need the assistance of our readers to help me in understanding this.

Munich Re "sees opportunities to push through double-digit price increases following the rescue of American International Group (AIG) by the US government".

I do not know whether this applies to a specific class of reinsurance, and if so, which one.

For most other reinsurance classes such as Mortality, Critical Illnesses, Disability, Fire, Marine, Personal Accident, I do not see the justification of increase in reinsurance rates following the rescue of AIG by the US government.

Perhaps our readers who work in reinsurance company can help to explain?

Swiss Re Expects Rates to Fall

Swiss Re expects reinsurance rates to fall in most locations and in most lines of business. The better rates are due to lower claims from natural disasters in 2006 and 2007.

Source: Business Times