Tata AIA Use Smartphone

Tata AIA Life Insurance has launched mInsurance or mobile insurance where phone users can buy term cover by recharging using a `special tariff voucher'. The company has launched the plan through a pilot project in Andhra Pradesh and Telangana through a tie up with Tata Teleservices Limited.


Indian citizens between 18 to 80 years of age can avail this paperless cover which does not require any medical tests. Customers are auto-enrolled on purchase of Tata DoCoMo's selected mobile recharge coupon (Special Tariff Voucher or STVs). The life cover comes with two sum assured options - Rs 50,000 and Rs 1,00,000. Consumers receive the details of the life cover via SMS which contains a weblink to download the insurance certificate.

In the event of a claim, the beneficiary must call the Tata AIA Life call centre for settlement. "This initiative is core to the mission of IRDAI, which is not just regulation but development too. Life insurance is all about protection and that incorporates three things offering protection at an affordable price, reaching out to maximum number of people, and offering simple claim settlement. 

A plan like minisurance uses technology to cut distribution and service costs, thereby bringing protection to those who would otherwise find it unaffordable. With plans like these, we feel we have done something really valuable for the country", said IRDAI chairman, TS Vijay at the launch of the plan.

According to H. Venkatachalam, chief of partnership, distribution and corporate solutions at Tata AIG the product has been well received in the pilot stage with over 23,000 lives secured in a short span. Tata AIA Life Insurance Company Limited (Tata AIA Life) is a joint venture company, formed by Tata Sons Ltd. and AIA Group Ltd. (AIA). The company has written retail new business premium of Rs 572 crores for the nine months ending December 2016, that represents a growth rate of 85% over the previous year.

ValoraLife Online Purchase

ValoraLife, a bilingual approach to purchasing term life insurance online, has made its no-obligation quote process even faster and easier to use. The life insurance quote experience, accessible via mobile devices, was modified to appeal to today's Latino and millennial consumers.

"We've slimmed down for the new year, just like a lot of people do, but we didn't need a gym membership for this makeover," said Eric Hernandez, Brand Director at ValoraLife. "Instead, we made adjustments to the life insurance quote process to make it shorter and easier to use, helping consumers save time, and making it simpler and quicker to protect their family's future."

ValoraLife launched June 2016 in Texas with a consumer-friendly website, which was recently recognized with W³ Award honors for creative excellence on the web.1 Now available in fifteen states, Valoralife.com may be accessed from mobile devices in English or Spanish, enabling users to get simple, affordable life insurance in approximately 30 minutes. Now, with the quote experience modifications, users simply go to ValoraLife.com and click on the "View Quote" button to see instantly how much they would pay for the coverage they want.

"We believe being able to obtain a quote in seconds via a mobile device is particularly attractive to young Latinos, 94 percent of whom access the Internet via a mobile device," said Hernandez.2  

One aspect of the ValoraLife experience has not changed; users are not required to enter any personal information during the quote process. Consumers told ValoraLife they prefer not to be contacted by companies so early in the process.

"Many people, especially middle-income Latino families, believe life insurance is complicated, too expensive and it's not a priority because of other financial responsibilities," said Hernandez. 

Yet, a recent LIMRA study indicates that almost half of Latinos are very concerned about dying unexpectedly without adequate financial protection compared to about one third of the general population.3 ValoraLife is simple, quick and affordable and can help family members maintain financial stability if the insured dies unexpectedly.

"We have made it so easy, there really is no excuse not to get a quote right now," Hernandez said.

Malaysia Life Evolution

Further consolidation may be in the cards for the Malaysian insurance industry in the years to come as measures to strengthen local insurers and make them more efficient as well as resilient are implemented.

Fitch Ratings said in a report that the country’s insurers had continued to develop positively especially within the context of Asean’s growing economic integration. “Despite the benign global economic outlook, the country’s low insurance penetration, stable domestic consumption and sustained government infrastructure spending will continue to support premium growth, particularly in commercial lines,” it said.

But the rating agency, which has a “neutral” view of the local insurance industry, pointed out that several initiatives will have a profound impact on the industry’s landscape. In particular, it said composite insurers, required to split their life and non-life operations by 2018, could face some challenges to maintain their capitalisation.

It believes that these affected insurers may seek external capital or engage in mergers and acquisitions to meet regulatory requirements, especially if their operations lack scale. Fitch also said the second phase of the motor tariff deregulation that starts from July will likely spur further rationalisation in the motor segment. 

Insurers’ margins may compress in the short term as competition intensifies, although we expect the market to remain relatively stable, supported by the profitable fire class, and the pricing and governance requirements that Bank Negara has put in place as part of the transition to safeguard consumers,” it noted.

It added that further consumer-focused measures from the life insurance and family takaful framework such as the removal of commission limits, compulsory direct channel distribution, and improved product disclosure in sales documents, will increase the life insurance industry’s professionalism and transparency, while providing insurers with the flexibility to innovate and tailor their cost structures to their respective business and competitive strategies.

It said capitalisation remains a key strength of the industry as insurers have consolidated risk-based capital ratio of 248.5% last year, well above the regulatory minimum of 130%, supported by ongoing surplus growth, sound underwriting practices and robust regulatory frameworks.

Fitch sees Lloyd’s entry as a positive due to the company’s expertise in specialised risks benefiting ceding companies and other local reinsurers by reducing volatility in underwriting profits. “Local players may also explore collaborative efforts and engage in mutual knowledge sharing with market participants, thereby improving overall insurance penetration, and reduce existing protection gaps,” it said.

Cathay Airways - Flawed Business Model

Cathay Pacific Airways has lost its glamorous and exclusive image because it is no longer a glamorous and exclusive business. 

“Arrive in better shape” was their old slogan. Today, it means “Lost in transit.” Their business model is irrevocably flawed in a changing world.

An unexpected announcement of a HK$575 million loss last year and a reversal of a HK$6 billion profit in the previous year suggests there is no turnaround on the horizon. 

Aviation fuel accounted for nearly 30 per cent of total operating costs last year. Yet, near catastrophic bets on future fuel costs raise serious questions about management competence.

Cathay is mired in a stuck-in-the-middle strategy – unable to compete as a discount airline and unable to sustain a premium brand

We will probably never know how Cathay’s management erred to cause a huge US$1.8 billion loss in oil derivatives, even though they try to explain it with phlegmatic dignity. 

Derivatives salespeople are laughing all the way to the bank and surprised the senior management team still survives.

The airline blames a slump in business travel, global conditions and the increasing competitiveness of mainland airlines. 

But all airlines operate in difficult conditions. Cathay management appears oblivious to reality, living in the fantasy profit world of Hong Kong’s protected cartels now beset by the cruel world.

According to Bloomberg, China plans to build more than 50 airports by 2020 to accommodate more passengers, raising the number of civil transport facilities from 210 to 260. 

The government also plans to build six airport clusters nationwide and elevate airports in Beijing, Shanghai and Guangzhou to international hubs.

Through the 70s and 90s Cathay benefited from its colonial monopoly concession from the Hong Kong government.

That co-dependency hasn’t changed. Cathay and its owners, Swire, have such a unique and lucrative deal with the government that taxpayers will be paying for a third runway. They collude to prevent Hong Kong travellers from benefitting from the entry of local, low cost, discount airlines.

Sustaining the cost, and passing on the pricing structure of a premium airline to passengers is unsustainable when confronting the onslaught of competition from mainland airlines.

Cathay is mired in a stuck-in-the-middle strategy – unable to compete as a discount airline and unable to sustain a premium brand. 

They respond in the typical, smug, self-immolating Hong Kong (and I mean Hong Kong British and Chinese) fashion that characterises many of the local businesses when confronted with real competition – they cut quality.

The only sensible option for Swire is to sell Cathay while it still holds valuable assets like landing slots, a decent cargo business and maintenance facilities

That’s evident in the numerous complaints online about Cathay’s service quality, and a mileage awards programme which looks about as difficult to achieve as a manned expedition to Mars. 

Even the business class lounge has been subcontracted to an outside manager.

Controlling your brand is paramount when your business is in turmoil. Instead of reinventing the business or innovating, management chooses to die by a thousand cost cuts over time.

Cathay shouldn’t be encouraged with sympathetic descriptions of being a Hong Kong “icon.” They are owned and controlled by a wealthy family who run it for profit, not public trust.

The only sensible option for Swire is to sell Cathay while it still holds valuable assets like landing slots, a decent cargo business and maintenance facilities.

No doubt, a mainland company will devour them. Current management is utterly confused and cannot stop the insurmountable competition and deterioration of value.

Malaysian Young & Unemployed

The youth unemployment rate in Malaysia has reached more than three times the national unemployment rate of 3.1%, due to the slower growth in hiring, according to Bank Negara in its 2016 annual report.

In 2015, the unemployment rate among youths was estimated to have reached 10.7%.

Bank Negara said youths represented more than half of unemployed workers, although it only made up a third of the labour force.

“In 2015, unemployment rate among youths increased by 1.2 percentage points from an estimated 9.5% to 10.7%, while national unemployment rate went up by only 0.2 percentage points (from 2.9% to 3.1%) during the same period (see chart).“Cautious business sentiments and moderating economic performance have restrained businesses from expanding their workforce,” noted Bank Negara.

The central bank stressed that while youths were the most vulnerable to these trends, they were perhaps the last to be hired and first to be made redundant due to a lack of experience, higher information asymmetry on the labour market and poor communication skills.

“Slower hiring has had a wider impact on the economy, affecting particularly youth and new jobseekers,” it added.

In terms of employability, the central bank said that youths with tertiary education were the highest among the unemployed at 15.3%.

About 16% of those aged 15 to 24 years have tertiary education.

The highest level of schooling attained by the remaining 84% was secondary education, said the central bank. Among regional economies, Malaysia’s youth unemployment were in the double-digits, despite an overall low unemployment rate.

But interestingly, this trend does not appear to be unique to Malaysia.

“Among regional economies, unemployment rates for young graduates also tend to be higher than non-graduates.

“This observation appears to be counter intuitive to the economic wisdom of increasing returns to educational attainment and seems to be the opposite of the experience in advanced economies,” it said.

These trends were likely to be related to the nature of global supply chains and ensuing patterns of job creation in the emerging economies.

Thus far, research on factors driving comparative trends on graduate versus non-graduate youth unemployment in advanced and emerging economies have been scant.

These developments in graduate unemployment have raised several key policy questions for emerging economies, with regards to enhancing the quality and relevance of education systems to prepare for rapidly evolving industries, the types of jobs being created and the readiness of the human capital base, apart from measures to enhance matching in the labour market, among others.

Public Bank Shift Focus

Amid shrinking industry's net interest margins, Public Bank Bhd - said it will focus its efforts on beefing up non-interest income."The industry outlook will remain challenging moving forward. We will look very hard into increasing the fee based income and this is one of our strategies going forward," it's managing director and chief executive officer Tan Sri Tay Ah Lek said at its AGM on Monday.

"We will look into increasing the income from fees," he said. Tay said the industry's “margin squeeze” will continue with the intense competition. "We can expect the margins will continue to be squeezed and this will affect the returns on equity (ROE) moving forward. But our ROE is the still the highest among our peers at 16.5%," he said.

Whi Is Norashikin Ahmad

Norashikin Ahmad, 24, has been rescuing dogs and cats ever since 2014 when she got her first job. She houses 120 cats and 50 dogs in a purpose-built shelter next to her home in Alor Gajah, Malacca. On top of running the shelter, she works full-time, helps out with her mother’s food business and has to travel to the mosque in the next village to pray as she is not welcome at the one right outside her house.

We first meet Shikin (as she is commonly known) at the Alor Gajah morning market where she works at her mother’s food stall on Sundays.

After the market, we follow her to a small village off the main road. There are several buildings on her property but none that look, or smell, like an animal shelter.

Shiro, a tiny scrappy-looking shih tzu, straggles out to greet us. Shikin throws Shiro a rubber ball as she points to a maroon-coloured building in front of us, “that’s my shelter!”

Indonesia Ends Era Of Selling Natural Resources

President Joko "Jokowi" Widodo has reminded his Cabinet of its priority to continue the downstream development of the mining sector in order to create added value in the sector.

"In my opinion, the era of selling natural resources has ended and we must stop selling raw materials. We must change this paradigm of mineral and coal as commodities and use them to create added value in our economy," he said during the start of a closed-door Cabinet meeting on Wednesday.

"That is what I see in developed countries. They dare to make the leap from being a commodity-selling country to one that strengthens its manufacturing industries. We must do the same and we must do it even faster." 

Indonesia has tried to develop the downstream of the mining sector since it issued the Mining Law in 2009. The government continues to extend the requirement as stated in the law for all miners operating in Indonesia to construct smelters and to stop exporting raw materials and semi-processed minerals because most companies have not got their smelters ready.

The initial deadline for companies to construct smelters alone or together with other companies was by the end of 2014.

Since January, the government has banned exports of all mineral ores and concentrates, except for miners that have committed to converting to a special mining permit (IUPK). This commitment also entails a promise to build a smelter within the next five years.

Indonesia Virtual Minimart

INDONESIAN augmented reality (AR) company Slingshot Group (formerly known as AR Group) introduces a virtual store network called Mindstores targeting local women and housewives.

Launched in 2016, Mindstores is the world’s first AR/VR network store platform that allows brand partners to offer a virtual franchise license of the stores to women who want to open the virtual business at a reasonable price.

“If one minimart franchise usually costs you up to US$70,000 per store, the virtual store will only cost US$100 and that will be the money the store owner can use to buy stuff for their store,

“Once the US$100 credit is finished, the store owner needs to top up and continue their business as usual,” Slighshot Group chairman and chief executive officer Daniel Surya (pic, above) explains.

Brands and retailers can partner with Mindstores to open up their inventory to be sold in the virtual stores. Anyone can then register as a virtual storeowner. Once approved, they will be able to sell anything from that store virtually.

Storeowners however need to buy in bulk, acting as an individual distribution channel, where the retail partners handle the logistics and product delivery.

It has been less than six months, and Mindstores currently has 8,000 virtual stores owned by 8,000 women in the country, the majority of whom are in cities around Java. They aim to have 150,000 stores within the next two months.

Daniel says that the possible number of virtual stores that can be opened with the Mindstores technology can hit four million in the next two years.

Mindstores has more than 5,000 products with a 2.3x basket size growth compared to physical stores.

Mindstores will have two other local retailers joining as partners, namely insurance company PT Astra Aviva Life as well as food retailer PT Primafood International.

Indonesia - Universal Health Insurance

"I was very worried [about the hospital bill] because my father was in [intensive care] for a long time," said Sheryl Tan, recalling the two painful months leading up to her father's death last year. "So I was relieved when I heard that MediShield Life paid 28,500 Singapore dollars ($20,300) out of the total bill of S$30,000."

MediShield Life is Singapore's public medical insurance system, which covers expenses for serious illnesses. To support a rapidly aging society, the government has been enhancing state assistance. A policy change in November 2015 allowed people -- like Tan's father -- with existing health problems to enroll in the program. 

In the past few years, other Asian countries have been busy implementing or bumping up public social security plans. Thailand achieved universal health coverage on paper in 2002, with a scheme that included self-employed workers and farmers.

Indonesia is trying to follow suit with goals of universal health coverage by 2019. Cases such as Tan's remain exceptions to the rule, however, as there are gaping holes in many public programs.

"I've seen my sister, who is chronically ill with lupus but is not covered by any insurance," said Dian Kuswandini, a United Nations agency officer in Indonesia. Kuswandini's sister is yet to be covered by the country's "universal" health coverage scheme, BPJS Kesehatan, which is notorious for the complicated bureaucracy involved in applications and claim procedures.

"Her treatment is very expensive. Every year she has to seek medical treatments several times, and spend some 10 million rupiah ($749) or more for each doctor's visit," she said. "I thought, if only she had been subscribed to insurance like mine, which covers lupus, she may not be suffering this much" from her medical bills.

ROCKS AND HARD PLACES   Fiscal constraints are a drag on governments' drive to expand social security programs. Indonesia and Malaysia registered fiscal deficits for 2015, according to the International Monetary Fund, and Vietnam is forecast to do so. Thailand and the Philippines are teetering on the edge. This makes rapid expansion and implementation of social security schemes difficult.

The inadequacies of government programs are a pressing problem especially for the poor, who have to rely on them for treatment. But one insurance instrument is fast gaining traction as a possible solution: microinsurance.

India's crop insurance scheme offers an example. Last year, Prime Minister Narendra Modi introduced a new program called Pradhan Mantri Fasal Bima Yojana, replacing two earlier ones.

PMFBY is implemented by private and public insurance companies, with the central government and the states shouldering most of the cost. The premium charged to farmers for summer crops is set at a maximum of 2% of the sum insured; for winter crops, it is 1.5%. "PMFBY instills confidence in the farmers," Modi tweeted back in January 2016, when the plan was announced. "We should integrate as many farmers as possible with this scheme." 

Other Asian officials have realized the importance of microinsurance. Indonesia's Financial Services Authority in February issued guidelines for such products, aiming to expand insurance coverage for those with low incomes. The Philippines has a national strategy on microinsurance in place.

"Microinsurance not only enhances our resiliency to disasters, shocks, and crises -- I actually think it is a key element to strengthening the economy and making growth sustainable," Gil Beltran, the Philippine finance undersecretary, said during Philippines' chairmanship of Asia-Pacific Economic Cooperation in 2015.

"It is always a win for the economy when the most vulnerable are protected and empowered. In a way, boosting microinsurance coverage rates is an effective anti-poverty measure."