India: Insurers reel from underestimated third party auto losses. Read the Malaysia Context

India's non-life insurance industry stands to lose almost three times the profit it made last year because of the need to increase provisions for motor third party insurance claims, reports the Times of India (Source: Asia Insurance Review 10 March 2011).

In the Malaysian insurance environment, the increase provisions for motor claims had long being in place. Losses suffered by General Insurers especially from third party bodili injury and death claims had progressively deteriorated with claims ratios exceeding 200% since 2006.

In 2010, for every ringgit of third party bodily injury and death premiums received, Insurers paid out RM2.82 in claims before factoring in other related costs. The growing gap between premium collected and claims paid out by the industry had contributed to the displacement of third party insurance covers as more Insurers are not able to sustain such business on a financial viable basis.

As a result, some motor vehicle owners have had to purchase their motor policies from the Malaysian Motor Insurance Pool which has seen a sharp increase in the number of policies issued from 128,058 in 2009 from 5,897 in 2007 (The Star 24 March 2011)

For vehicle owners wishing to take up the motor insurance directly with the Insurers, additional premium or an accompanying PA Insurance, sometimes, is required as a pre-requisite to insuring their motor vehicles.

Latest news on Japan's Earthquake and Tsunami

1.0 Global impact: Historic quake shoves insurers into unprecedented territory

As Japan's Meteorological Agency upgrades the magnitude of the country's biggest recorded earthquake from 8.8 to 9.0, several estimates place global insured losses from last Friday's quake at US$10 billion to US$50 billion while many more insurance industry players demur that it is too early to assess the losses. So far, neither the Japanese government nor the country's insurers have provided provisional estimates of insured losses.

2. Local impact: All eyes on payouts by domestic insurers

Attention is focused on Japanese domestic insurers, for which earthquake insurance claim payments from Friday's devastating quake could exceed 100 billion yen (US$1.2 billion), reportsDow Jones. The estimate is based on the increase in the number of earthquake insurance policyholders in the country since 1995.

3. Nuclear damage: Insurers likely to be spared from liability

Liability costs associated with damage at the quake-hit Fukushima nuclear plant will ultimately be borne by the Japanese government instead of the private insurance market, reports The Wall Street Journal.

4. Lloyd's: London watching Japan closely

The Lloyd's Market Association (LMA) says that it is monitoring closely the effects of the earthquake and tsunami in Japan and adds that it is too early to give any accurate assessment of the likely impact on the Lloyd's market.
5. Cat bonds: Up to US$1.5 bln at stake in quake

Financial investors, in the wake of  last Friday's massive earthquake in northeastern Japan, could lose millions in investments in catastrophe bonds that have more than US$1 billion in exposure to Japanese earthquakes, reports Reuters.

Asia Pacific: Insurers to invest more in mobile access and online marketing

Asia Insurance Review 8th March 2011 reported

"Advances in mobile devices and online social networks, and their accompanying changes to consumer behaviour, are the top two factors driving investment priorities for insurers in mature Asia Pacific (Apac) economies, says the international consulting firm, Accenture, in a report titled "Distribution in the palm of your hand - The race to mobile distribution".

As a matter of fact, purchasing a product on line is now a norm in the buiness world, what with the modern and advanced technologies in place. For the younger generation of purchasers they have no qualms about making a purchase citing convenience and the many options (like credit card , interest free installment, minimum payment etc) which are available to them. Majority of these people are IT savvy and they can follow the purchase and payment transactions like a duck in the water.

In the insurance sector, however, except for the minority, most are still sceptical about purchasing insurance on line as it would mean exposing their personal details, credit card number,bank account number etc. I, for one, subscribed to this belief. For the older generation of purchasers, they would still prefer the traditional way of purchasing insurance  through their trusted agent where personal service or personal touch is assured. Not only that, premium can be owed to agents who may be kind enough to pay the premium in advance free of interest on behalf of the customer.

The old generation of thoughts had to be phased out.eventually. With the advanced technology in mobile phones, the fast growing social network sites and change in consumer behavior, purchasing insurance online will be the order of the day.

Australia: Global reinsurers reconsider business Down Under

Global reinsurers have taken a "hammering" from billions of dollars of payouts linked to a string of natural disasters in Australia (Flood, Cyclone) and New Zealand (Earthquakes) over the past 18 months, with some likely to reconsider doing business Down Under, reports the Sydney Morning Herald quoting QBE Insurance, Australia's biggest
underwriter.

Asia Insurance Review 1/3/2011