Sunday, February 27, 2011

Motorists to pay more for their Insurance Premium

Motorists will need to pay more for their insurance premium from next year under a new framework announced by Bank Negara Malaysia this week (Source: The Star, 26 February 2011).

The increase would be "manageable" as it would be spread over four years with BNM refuting a report in a local daily which stated premium would rise by between 250% and 450%.

Example, citing fugures for certain category, motorcycles with 100cc and below, the annual increase would be between RM1.00 to RM3.50 for Third Party and RM1.00 and RM2.00 for Comprehensive. For Cars 1500cc and below, the annual increase would be RM6.00 to RM 34.00 for Third party and RM7.00 and RM19.00 for Comprehensive. Overall premium paid would depend on factors such as age of vehicle and motorist's history of claims.

The adjustment is necessary as the premium for motor insurance has not been reviewed since 1978 and Insurance Companies have constantly raised the issue of third party motor insurance being unprofitable given low premium which do not commensurate with the high claim costs.

According to BNM, the motor insurance business incurred an estimated annual loss of RM 650 million as at 2009/2010.

Under this new framework and until 2016, when the premium for motor insurance is expected to be liberalised and determined mostly by market forces, motorists can expect faster claims period from an avearge one to five years to six to eighteen months. Is this possible?

Friday, February 25, 2011

New Zealand: Insured quake losses to hit US$12 bln (updated 3/3/2011)

New Zealand: Swiss Re estimates quake cost at US$800 mln

Global reinsurer, Swiss Re, says that its preliminary estimate of its claims cost from the earthquake in New Zealand on 22 February is about US$800 million, net of retrocession and before tax.

The total insured claims for the insurance sector for the earthquake in New Zealand are estimated to be between US$6 billion to US$12 billion

3/3/2011


Insured losses from Monday's earthquake in Christchurch may reach US$12 billion, said JPMorgan Chase. The disaster is described as New Zealand's deadliest earthquake in eight decades.

Reinsurance rates could rise following NZ quake. New Zealand's deadliest earthquake in eight decades, which took place this week in the country's second largest city of Christchurch, may lead to higher prices for reinsurance in the Asia-Pacific region, reports Bloomberg.
 
Lucky..Malaysia
 
Asia Insurance Review
25/2/2011

Tuesday, February 22, 2011

Seminar on Fire Insurance Biz: Compete Competitively

A full day seminar was conducted by Steven Cheah at Concorde Hotel, K.Lumpur on 23rd February 2011. Attended by 350 agents from the Klang Valley.

This is a market orientated insurance based training program aimed at sharing ideas with Agents on how to compete competitively for a larger share of the fire insurance business in line with the rules of the Revised Fire Tariff.

Key topics delivered:

* Perception of Buisness Vs  Reality Check
* 10 Reasons why Agents should sell Fire Insurance
* 5 Extra Reasons why Customers should buy from that particular Agent (when there are thousands around)
* 15 Options for Agents to compete competitively for a bigger share of the Fire Insurance Business
* Challenge session on the Proposed Fire Insurance Program

Tuesday, February 15, 2011

Malaysia: Labuan scores US$1 bln insurance hattrick

 The gross premium written for the insurance business in Labuan International Business and Financial Centre (LIBFC) surpassed US$1 billion in 2010, for the third consecutive year, reports the online edition of the Daily Express newspaper


Asia Insurance Review
15/2/2011

Wednesday, February 9, 2011

Bank Negara advice on how to avoid fraud

PETALING JAYA: Bank Negara wants all insurance firms and relevant parties to be more vigilant and take heed of some of its pointers to combat insurance fraud.

The menace, which is in the form of deception or dishonesty for unjustified financial gain, is committed at different points in the transaction by either an insurer, agent, policy owner or third party claimant, the central bank said.

Some examples of fraud include creating a fraudulent claim, overstating the amount of losses, misrepresenting facts to receive payment and bogus agents/sale of forged cover notes.

The central bank said some of the pertinent pointers one has to take to protect oneself from insurance fraud are:

> Beware of any unregistered insurance agent offering his services. If in doubt, contact your insurance company or takaful operator or the General Insurance Association of Malaysia (PIAM), the Life Insurance Association of Malaysia (LIAM) or the Malaysia Takaful Association (MTA) to ensure the agent is an authorised one;

> Avoid paying premiums in cash. Choose to pay for premiums by cheque, money order or Internet payment to the insurance company or takaful operator directly;

> Do not sign a blank insurance or takaful proposal form, or insurance/ takaful claim form;

> Be suspicious if the benefits and price of insurance or takaful products offered by an agent seemed suspiciously favourable compared to products offered by other insurance companies or takaful operators;

> If you meet with an accident, be careful of strangers who offer quick cash or urge you to deal with specific workshops, medical clinic or law firm. They could be part of a fraud syndicate;

> Insist on detailed bills for repairs and medical services rendered and check for accuracy; and

> If you are being defrauded, have been or are being persuaded to take part in a fraud, contact your insurance company or takaful operator, PIAM/ LIAM/ MTA or the police.

The Star 15th January 2011

Tuesday, February 8, 2011

Inhouse anti-fraud units scrutinise claims

Petaling Jaya: Bleeding from staggering claims, most insurance firms have now set up special anti-fraud units comprising specialised investigators to scrutinise claims.

Prudential Assurance Malaysia Bhd chief executive officer Charlie E. Oropeza said suspicious cases or those that involved large payouts were referred to the officers from the units who were well-trained to detect wrongdoings.

“The company will then make an informed decision on whether to pay the claims based on the findings from our detailed investigations.

“But having said that, it is important for people to know that as an insurance company, we are here to pay claims and will do it in a fair and equitable manner,” he said.

Oropeza said clients would ultimately have to pay expensive premiums if they made frequent or large claims.

On the extent of insurance fraud at the company level, he said: “We are unable to disclose the details but rest assured that it is within our expected tolerance level.”

He said Prudential also provided training and held regular meetings with its agency force to weed out fraudulent claims.

“The agents are our first line of defence and have a better insight into cases,’’ he said.

Without disclosing the quantum of fraudulent claims, Great Eastern Life Assurance Malaysia Bhd senior vice-president and head of risk management/compliance Cheong Soo Ching said the company had in place “robust” mechanisms to fight fraud and these were constantly refined and fortified.

“We also have an experienced team comprising well-trained professionals to handle fraud matters. They are entrusted with monitoring work and to detect any unusual trends or patterns,” he said.

To keep abreast of fraud risk developments, Cheong said Great Eastern constantly updated its staff and agents with risk awareness programmes.

“We also initiate discussions with them on how to improve on measures to check fraud. Regular analyses of cases are also carried out,” he said.

Lonpac Insurance Bhd adviser Tee Choon Yeow said: “Occasionally, we do come across fraud cases where claims are inflated or falsified. However, such attempts are under control because we have in place an efficient claim evaluation unit.”

The Star 15th January 2011

Monday, February 7, 2011

Pros hired to detect fraud

PETALING JAYA: Concerned with the increase in fraudulent claims, insurance firms are now recruiting engineers, surveyors and accountants to work as loss adjusters.

Association of Malaysian Loss Adjusters (AMLA) chairman Lee Thim Fook said these professionals were vital in checking the wrongdoings in the industry.
“We need the expertise of each of these professionals as insurance claims encompass a wide area of interest and we have to get the right people for the job,” he said.
Lee said he was unable to provide specific details and data on the extent of the problem in Malaysia, but judging by the cases globally, fraudulent cases had been on the rise over the past few years.
He said other than hiring engineers, surveyors and accountants, other specialists in other areas were also recruited as adjusters
“Each of them have specific skills which are vital in detecting fraud claims
“We also collaborate with related bodies like the Malaysian Insurance Institute to conduct training for adjusters,” he said.

On top of that, Lee said conferences pertaining to fraud were organised regularly to keep adjusters abreast with current trends.

He noted that many claimants would stop pursuing their claims once insurers repudiated their claims.

“Insurance fraud which can be broadly classified as ‘planned insurance fraud’ and ‘opportunistic insurance fraud’ is a serious matter and is punishable under the Penal Code,” he said.

The Star 15th January 2011

Friday, February 4, 2011

Updates on the massive Flood in Australia (as at 5th February 2011)

Australia: Overall economic losses from floods could reach between US$10 bln and US$20 bln

Australia's recent flooding catastrophe has become the country's costliest natural disaster in history with A$5.6 billion (US$5.67 billion) in economic damages. The total cost of repairing and rebuilding could potentially push the overall economic losses between A$10 billion and A$20 billion, according to Aon Benfield's latest Monthly Cat Recap report.


The Queensland government failed to take out disaster insurance


reports The Australian. It is the only major state not to have insured public assets with a comprehensive disaster cover obtained on the international reinsurance market.

Asia Insurance Review

5th February 2011

Australia: Non-life insurers present wishlist for flood action

The Insurance Council of Australia (ICA), which represents general insurers Down Under, has released a 10-point plan to tackle future disasters, with establishing a standard definition of flood as the top priority, even as Australian Prime Minister Julia Gillard proposed a one-off flood levy to help pay for the cost of flood
reconstruction.



Asia Insurance Review
 31st January 2011

Australia: Insurers argue that rebuilding levy will make insurance more expensive

Insurers in Australia are up in arms against a government proposal to introduce a levy nationwide to help fund the cost of rebuilding after natural disasters, arguing that such a levy will push up premiums, reports the Sydney Morning Herald. The federal government is considering the idea to pay for the clean-up of catastrophic events like Queensland's floods.

Asia Insurance Review
27th January 2011



Australia: Obstacles hamper reaching agreement on a common definition of flood

Despite public calls for a standard definition of floods in insurance contracts amidst the current flood devastation in Australia, adopting a common definition would not resolve problems for insurers or consumers, reports the Herald Sun quotingMr Chris Groth, Research Manager of financial research and ratings company Canstar Cannex.

Asia Insurance Review
26th January2011
Australia: Flood claims exceed US$1 bln

Insurers in Australia have received 31,300 claims for about A$1.2 billion (US$1.19 billion) as a result of the devastating flooding in the country caused by driving rain and overflowing rivers, reports Bloomberg. According to Mr Rob Whelan, the Chief Executive Officer of the Insurance Council of Australia, who provided the figures, about three-quarters of the claims, which do not include industrial and mining damage, are for property and 24% are for motor vehicles.


Asia Insurance Review

25th January 2011


Australia: Global reinsurer airs position on payouts for flood victims


Munich Re, the world's biggest reinsurer, has said that people who do not have flood coverage cannot be expected to be compensated for losses arising from the devastating floods which have hit Queensland and Victoria, reports the Australian Broadcasting Corporation (ABC).



Asia Insurance Review
 21st January 2011


Australia: Premiums to rise in wake of flood catastrophe

Some of the world's biggest reinsurers are expected to review their risk assessment of Australia in the wake of the massive floods sweeping through large swathes of the country, reports the Sydney Morning Herald. Demands by reinsurers for an additional risk premium could hit home owners or businesses hard, because reinsurance is one of the mainfactors in how domestic insurers price policies.

Asia Insurance Review 20th Jan 2011

Australia: Govt considering flood levy to fund rebuilding


The Australian government is considering a flood levy to be paid by taxpayers to help fund large-scale flood rebuilding while preserving the Budget's return to surplus in 2012-2013, reports The Australian newspaper. Any levy would likely take the form of an addition to the 1.5% Medicare levy, which raises A$10 billion (US$9.9 billion) a year.

Asia Insurance Review 19th Jan 2011


Australia: Floods to cost global insurance industry US$6 bln 

The Queensland floods may cost insurers and reinsurers worldwide as much as US$6 billion in what might be Australia's costliest disaster in history. Insured losses from last week's deluge in and around the capital Brisbane may be as high as US$4 billion, while damage from floods further north late last year may cost US$2 billion, reports Bloomberg citing Dr Milan Simic, Managing Director of catastrophe modeler AIR Worldwide

Asia Insurance Review 17/1/2011

Australia: Major insurers buffered from floods by catastrophe XL reinsurance

Despite the negative impact of the massive flooding in Australia on local insurers' profits, the rating agency, Moody's, has said that this is not a material credit event because the insurers have established provisions for catastrophic events and maintained extensive reinsurance programmes. Furthermore, flood coverage mostly relates to personal lines while high risk and high value exposures are excluded or have limited coverage under commercial policies. Separately, Fitch Ratings says that catastrophe reinsurance offers reasonable protection to Australia's major non-life insurers against floods in Queensland and Northern New South Wales.

Asia Insurance Review 13 Jan 2011

Wednesday, February 2, 2011

"Weather" Insurance

Japan: Insurer introduces country's first-ever rain cover


According to Asia Insurance Review 2nd February 2011 edition, Japan Insurance Co has begun to sell weather insurance, a product that reimburses the full value of travel costs if it rains or snows more than a certain amount at a customer's domestic destination, reports The Yomiuri Shimbun.


Sounds interesting. Perhaps the Insurers in Malaysia should also consider granting similar protection against exceptional bad traffic jams that may caused customers to miss flights, appointments etc resulting in loss of business, unnecessary expenses incurred etc?