Only 3% Malaysian Can Afford To Retire

The Covid-related withdrawals over the past two years have had a massive impact on the savings of Employees Provident Fund (EPF) contributors, as currently, only three per cent of contributors can afford their retirement.

Covid-related withdrawals, namely i-Sinar, i-Lestari and i-Citra, resulted in many members below age 55 having critically low EPF savings. Even with Covid-19, 80 per cent of Malaysian men and 90 per cent of Malaysian women will reach age 60, while one out of three men and two out of three women will reach age 80. We now estimate that only three per cent of Malaysians can afford to retire.

By the end of this year, 54 per cent of EPF members aged 54 would have less than RM50,000 in their savings account, noting that a majority of those who withdrew their entire EPF savings upon reaching age 55 would use it up within two to three years.

Those who had withdrawn from their EPF savings would now need to work an extra four to six years just to cover the amount that they withdrew over the past two years. Since it is unlikely that the retirement age will be raised, they would not have enough for their retirement.

Meritocracy The Foundation Of Singapore

Developing highly capable leaders anchored on core values like meritocracy and incorruptibility is a focal area of leadership development in Singapore, said Minister-in-charge of the Public Service Chan Chun Sing on Friday (Oct 29). Speaking at the 8th Singapore-China forum on leadership, Mr Chan, who is also Education Minister, shared the three areas of focus for leadership development in Singapore. Developing highly capable leaders anchored on core values is one of them, he noted.

Meritocracy & Incorruptibility - “Just like our Chinese counterpart, we strongly believe that values (and) their role in shaping governance cannot be overstated. Selecting and developing not just the most capable, but also the most committed individuals for leadership, remains our topmost priority.”

Singapore’s experience with managing the COVID-19 pandemic shows that “it is not just about the technical accuracy of our responses”, but whether the people trust the Government to “do what it takes to protect the public good” even in the midst of uncertainty, said the Education Minister.

“Therefore, leaders must be anchored on core values, such as meritocracy and incorruptibility, and always putting the public interest above self. In an uncertain world, values become even more important, because leadership effectiveness depends on trust. These values do not change. These are the values we look out for when selecting our leaders and leadership team, and we continue to reinforce them along our leadership journey.

Diversity & Collective Leadership - Fostering greater diversity in Singapore’s “leadership collective” is also needed to build resilience. The collective strength of our team matters more in an uncertain world. We need to develop resilient leadership teams with a good mix of skills, traits, competencies, experiences and personal networks.

In Singapore’s public service, leaders are exposed to “different domains”, including policy, operations, mobilisation and communications. Beyond rotating them to different Government agencies, these individuals are also exposed to the private and people sectors to “gain knowledge and build networks”, said Mr Chan.

Run The Extra Mile - He added that leaders should move beyond “doing for our people” to “doing with our people”, and to “do more and do better together” while managing heightened expectations. We consult the public and solicit views, allowing the Government to be more responsive to citizen needs. This also allows us to benefit from alternative ideas and suggestions as we co-create and co-deliver services with businesses and the community,” said Mr Chan.

“As the role of the government becomes more complex, we will need to align and tap on the wider collective across public, people, private sectors, to develop more sustainable and more holistic policies and approaches.”

Mr Chan is also Singapore’s new co-chairman of the forum. Executive vice minister of the Central Organisation Department of the Communist Party of China Jiang Xinzhi co-chaired the forum with him.

The forum, first hosted by China in 2009, is a platform for political leaders and senior officials of Singapore and China to “discuss and exchange experiences on common challenges related to leadership development”, said the Public Service Division in a statement.

NTUC Launched In Indonesia

NTUC Income, an insurance cooperative in Singapore, made its first overseas foray into three Southeast Asian markets namely Indonesia, Vietnam and Malaysia. The company had formed partnerships with PT Central Asia Financial (JAGADIRI) in Indonesia, Post and Telecommunication Joint Stock Insurance Corporation (PTI) in Vietnam and VSure Tech Sdn. Bhd (VSure) in Malaysia.

These strategic alliances are built on Income’s Insurance-as-a-Service (IaaS) model that enables the company to bring digital-first insurance business models to partners overseas.
This enhances their speed-to-market, and equip them with the right capabilities and tools to capture new customer segments and revenue streams.

As part of Income’s strategic partnerships with JAGADIRI, PTI and VSure, these companies will be the first in Indonesia, Vietnam and Malaysia to launch Droplet respectively across four cities including Greater Jakarta, Hanoi and Ho Chi Minh City, as well as Kuala Lumpur.

Droplet is a micro-insurance product that is designed to address price surges on ride-hailing platforms during rainy days.

Improve Humanity Increase Productivity

The push for heightened productivity began, the unrelenting demands to get more out of people are taking a toll; a mental and physical toll on the humans doing the work, toss in the impact of a global pandemic and the effect is a burned out, demotivated, detached, overworked workforce. And people are reaching a breaking point as evidenced by the “Great Resignation,” where a reported 11.5 million people quit their jobs in April, May, and June of this year and record levels of attrition. It is time to look at a different way to drive productivity. It’s time for humanity.

To bring more humanity into your workplace, take steps to become more aware of your own actions and the impact they create on others. With this insight, you can shift how you interact with others and create a positive humanity-centered culture, one where people feel like humans, not resources. Here’s how—we have created five practices to bring more humanity to your workplace.

Creating Safety. The most important aspect of working with people is to create an environment that feels safe, physically and psychologically. When people feel safe, there is a sense of belonging to the group. This sense of belonging promotes fully expressed individuals, aware of whom they are and what they have to contribute. When people feel safe, they will do better work. Period.

Working Together. The secret to working together is to realize it’s not all about you—it’s about everyone working together to achieve a common goal. This may require a perspective shift. It means being clear on what outcomes you want, open to how you can achieve them, and having faith in the power of co-creating to get there. Engagement is all about them, be sure every team member feels heard and knows their contributions are valued.

Claiming Values. Claiming values means knowing what you stand for, your non-negotiables. When you know what is important to you, you act on those values. This creates intentionality and offers clarity to those you work with. It helps create alignment. As a leader, you can help people discover their values—why they do what they do—for the company and for themselves. When people feel connected to what they are doing, they are more productive and engaged.

Owning Your Impact. Your impact is how people experience you. When you take responsibility for your impact, it creates personal accountability; your words and your actions align. You deliver what is needed to drive results, and you do it in a manner consistent with your character. Owning your impact is a practice of being responsible for what you create—both with your work and your workplace culture.

Daring Not To Know. This is the practice of surrender. It paves the way for deeper engagement and loyalty from others. It takes strength and confidence to appreciate things will be better when more ideas are included, when fuller representation is present and diverse perspectives are heard. As a leader, when you show that you are human, vulnerable, and don’t have all the answers, you open the door for others to step up. That’s the magic! Daring not to know makes the entire organization stronger. Lead the way by saying, “I don’t have the answer for that, what do you think?”

These five practices help you create a culture where you get the best—not just the most—out of your people. They help you increase your self-awareness, and from this place you can stand in choice about how you are behaving with the people you work with, and what type of work culture you are creating. Productivity is all about people. As a leader, when you have the courage to change, and help your organization be more human, you make humanity work better everywhere.

Manulife Financial Planner Convicted

A former financial planner at Manulife has been issued six-year prohibition orders after being convicted of a series of offences including forgery and cheating, the Monetary Authority of Singapore (MAS) said. 

Under the prohibition orders, which took effect on Wednesday, Stedtson Koh Kesheng is banned from providing financial advisory services, taking part in the management or acting as director of any financial advisory firm. He is also not allowed to be a substantial shareholder of any financial advisory company or from doing business in the insurance sector.

Koh worked as a representative of Manulife (Singapore) from September 2013 to February 2015 when he duped seven people into signing contracts for new Manulife insurance policies.
He told customers that their premiums paid for existing policies with another insurer could be transferred to new policies issued by Manulife.

Subsequently, Koh forged documents to deceive the customers into believing that the cash value of their existing insurance policies had been successfully transferred to their new Manulife policies. Customers’ previous policies had lapsed because they stopped paying premiums on their previous policies believing that they only needed to pay premiums to Manulife. As a result, the premiums the customers paid for the previous policies became irrecoverable", as the policies were terminated before their maturity dates. 

Koh pleaded guilty on Feb 15 to six charges - two counts of forgery and four counts of cheating. He was sentenced to 24 weeks' imprisonment in total.

Critical Illness Fraud Claim

The anti-graft body smashes a syndicate that cheated an insurance company out of HK$26 million in critical illness insurance. Four core members of the syndicate aged between 39 and 59 years were arrested - a former insurance agent, a policyholder, an intermediary and a cancer patient.

The case, which happened between 2017 and last year, involved four insurance policies, two of which were purchased by Hongkongers while the other two were purchased by mainlanders. The highest compensation in one of the policies was HK$9 million.

Four hospitals - two local and two in the mainland - and three local medical institutions were also involved in the case.

The ICAC said the insurance agent first purchased a high-compensation critical illness insurance policy with an annual premium of about HK$280,000 before asking a cancer patient, who is of similar age and appearance to the policyholder, to conduct a body check at a medical center or hospital.

The lymphoma proof obtained was then used to cheat the insurance company, for which the policyholder could receive HK$9 million in compensation.

The ICAC discovered that the insurance agent received a HK$2 million bribe, while the policyholder, intermediary and the cancer patient were offered rewards ranging from tens of thousands to several million dollars. The insurance agent also received a HK$2.5 million bribe.

In another operation, the ICAC arrested 22 people - a former regional director of an insurance company, three branch managers and 18 former insurance agents - for defrauding two insurance companies of about HK$51 million in commissions. The four seniors had hired the 18 people aged between 25 to 30 with no work experience and told them that they didn't have to sell any insurance products.

Further investigation showed that the four former senior employees falsely told the two insurance companies that the 18 agents sold as many as 480 insurance products and got HK$5.1 million in commission fees between 2018 and last year.

For the first nine months of this year, ICAC received 32 corruption complaints related to the insurance industry, compared to only 14 cases in the first nine month last year.

Ping An Insurance - Premium & Profit Falls

China largest insurer by market value - Ping An Insurance Group Co of China Ltd - posted a 31.2% fall in third-quarter net profit on Wednesday as its premium income shrank on a weak economy and profit was dented by losses on investment assets. Net profit fell to 23.6 billion yuan ($3.7 billion) in the three-months ending September 30, compared with 34.4 billion in the year-earlier period. It marks the company's worst quarterly profit fall since the first quarter of 2020.

Ping An's insurance business and investment returns have been hit by weakness in China's economy, which posted its slowest growth in a year in the third quarter as power shortages and property sector worries took a toll. The foundation for economic recovery requires further consolidation against the backdrop of a complicated international environment, sporadic COVID-19 outbreaks in China, and the impact of natural disasters including floods. Household consumption shrank quarter-on-quarter, affecting the long-term protection business of Ping An.

Ping An's premium income from life insurance in the first nine months declined 3.5% year-on-year to 364.5 billion yuan, while property and casualty insurance income fell 9.2% to 199.3 billion yuan.

PROPERTY EXPOSURE - Investors' confidence in Ping An has been shaken over the past year on growing concerns about its investments in a highly indebted property sector which faces a liquidity crunch amid a crackdown by Beijing on unbridled borrowings. The insurer reported a first-half earnings fall for a second consecutive year, as it wrote off a 20.8 billion yuan loss from investments in beleaguered developer China Fortune Land Development Co Ltd.

Ping An said it made no major provisions against China Fortune in the third quarter, but cautioned that "capital market volatility and increasing impairment provisions on investment assets weighed on the yields on company's investment portfolio of insurance funds."

Chinese regulators are probing Ping An's investment in the property market, and ordered it to stop selling alternative investment products, which are typically tied to the property market, Reuters reported. Some analysts caution that the total property exposure of Ping An is much higher than revealed and still underestimated by the market, which will impose further credit risks to the group.

While others expect Ping An's performance to bottom out in the fourth quarter, as the central bank and other regulators hinted some measured financing support for unfinished property projects of troubled developers.

Malaysia Medical Insurance Expected Repricing

As the number of Covid-19 infections declines and movement restrictions are eased, insurers may need to prepare themselves for a sharp increase in medical claims as policyholders seek or resume medical consultations disrupted by the outbreak of the pandemic.

Bank Negara Malaysia has cautioned that observations from other markets show that a potential sharp rise in medical claims could come from higher utilization of health services, albeit temporarily. In the short term, the average treatment cost could also increase due to poorer health conditions worsened by delays in seeking treatment. Demand-supply dynamics may also push costs higher, particularly for hospital supplies and services that may increase due to higher demand. 

Treatment Postponed - Due to the pandemic, many have delayed non-critical treatments or postponed medical visits to hospitals. Claims data in 2018 shows that hospital supplies and services accounted for 60% and 70% of claimable surgical and non-surgical treatment costs respectively in Malaysia.

The central bank is of the view that higher charges from pandemic-related protocols are likely to persist in the foreseeable future. However, over the longer term, how the pandemic will affect underlying medical trends remains uncertain, it adds.

Telehealth - It highlights that the accelerated adoption of telehealth services by international insurers during the pandemic is a notable development, and has the potential to improve efficiency and reduce the cost of healthcare. However, what remains uncertain is the effects of long Covid-19 in the insured population, which could increase the utilization of healthcare services.

Increase Claim Forecasted - While there is a possibility that the number of insurance claims could increase sharply in the near future, it is also worth noting that the number of claims had decreased year on year in 2020, with claims mostly coming from crucial treatments, the report points out.

As a result, the combined ratio of the medical portfolio of insurers and takaful operators had decreased. The combined ratio measures the profitability of insurers measured in percentage, whereby 100% indicates that the premiums collected have been fully depleted by claims and expenses, and there is no profit left for insurers as a return for underwriting the portfolio.

The combined ratio of life insurance and family takaful’s individual medical portfolio had hovered between 90% and 100% from 2015 to 2019.

Decrease Claim During Pandemic - Despite the decrease in the number of claims in 2020, the report notes that the average cost per treatment had increased by 14% for non-surgical treatments and 15% for surgical treatments. These increases far outpaced the long-term trends of 8% for non-surgical treatments per annum and 9% for surgical treatments.

This was partly attributable to the more severe and urgent nature of illnesses being treated and claimed for, as well as additional costs arising from pandemic-related protocols such as lab tests for Covid-19 and higher utilisation of disposable medical supplies (including personal protective equipment).

Insurance repricing is inevitable - In 2020, insurance and takaful operators were supposed to reprice medical insurance premiums. However, the planned repricing exercise was deferred due to the pandemic and to preserve the affordability of medical covers.

Bank Negara says the insurance and takaful operators will be “carefully evaluating” the risks of continuing deferrals in the repricing cycle, which is typically every three to five years, especially for portfolios with the highest combined ratios prior to the pandemic. “For such portfolios, there is considerable risk that a sharp rebound in claims once the pandemic fears subside could lead to steeper or more frequent price increases in the near term.”

It warns that this could have a disproportionate impact on some individual policyholders given the larger adjustment made over a shorter period of time.

Repricing, says the bank, is a standard feature of medical reimbursement covers to ensure the sustainability of the medical insurance or takaful portfolios.

Unsustainable Pricing - Medical insurance/takaful portfolios become unsustainable when the premiums collected are insufficient to cover the expected claims cost, expenses and profit margin of the insurance and takaful operators. Prior to the pandemic, it had been concerned when insurance and takaful operators delayed repricing exercises for too long as a competitive strategy.

Bank Negara warns that lengthy delays are likely to result in sharp and unexpected premium adjustments later on to catch up with claims inflation. This may leave policyholders who are unable to afford the higher premiums with limited options to obtain replacement coverage due to advancement in age or changes in their health status.

The central bank adds that to promote fairer outcomes for policyholders, insurance and takaful operators are required to establish an internal policy to govern the medical repricing exercise, whereby these policies must be monitored and reviewed to ensure that it is applied consistently and with due regard to the fair treatment of policyholders.

Bank Negara is also reviewing existing regulations to allow more flexibility for insurance and takaful operators to moderate the extent of repricing required for smaller product portfolios, which may be more likely to experience greater volatility in claims experience.

China Millennials Prefer Digital Marketing

China's social media and short-video platforms are becoming the new classrooms for the younger generation – who are eager to seek more insurance protection for themselves by using such resources. Millennials prefer to learn the ABCs of insurance on social networking sites like Weibo, Wechat and Douyin. Insurance companies are rushing to satisfy the demand by producing innovative and interesting content.

Digital marketing will become a new growth engine for the insurance industry in the future, and insurers that can take the lead in digital transformation will stand out. Around 72 percent of insurance companies said that short videos helped improve the conversion rate of their products, while over a half of surveyed consumers believed they can make a better decision while buying insurance online with the help of social media platforms.

With the combination of AI technology, digital marketing and the insurance industry itself, more and more links and scenarios such as customer acquisition, operations, claims settlement and online services have greatly improved the realization of automatic operations and the user experience.

Insurance Advisor Or Digitalization

Most customers aren’t interested in digital domination but in a balance between what a human advisor brings to the table and the ease that digitization offers. Policyholders have different preferences depending on where in the insurance process they currently are. The claims segment, for instance, has been found to be an area in which the involvement of an advisor is preferred over self-serve channels.

Digitalization - only 27% turn to social media for information; 50% to a human advisor; 56%, insurer websites; and 73%, financial aggregators. Digital channels built to facilitate pre-purchase stages of the customer journey do not adequately answer questions customers may have about the products, premiums, coverage, and unique queries. There is a varying levels of perceived complexity when it comes to different insurance plans. Insurance plans considered the least complex is car insurance, while medical insurance appears most complex. 

Replacing Agent - The future of many industries, including insurance, suggests that digital innovation and its increasing accessibility will negate most of the need for actual human services eventually. However across insurance products of varying complexity, the levels of satisfaction with fully digital self-serve options only matched those of an advisor-assisted experience at best. As the levels of perceived complexity increased, so did the perceived need for an advisor to assist and guide the process.

Car Insurance - Approximately 80% of customers rely on financial aggregators when looking for information on car insurance; 65% use insurance provider sites; 46% for both financial advisor and friends & family; 27%, social media sites; and 25%, forums.

Critical illness - 86% turn to financial aggregators for information; 44% to insurer sites, financial advisor, and friends & family; 35%, social media; and 21%, forums. Home contents – 88% use financial aggregators; 51%, insurance provider sites; 37%, friends & family; social media, 36%; financial advisor; 34%; and forums, 15%.

Medical Insurance - only 59% rely on financial aggregators while 54% turn to financial advisors. Insurer sites are used by 58% of respondents; friends & family, 54%; forums, 17%; and social media sites, 15%.

Purchase channels - 57% buy car insurance online while 43% go through an advisor. For critical illness cover, 63% take the online route; home contents, 61%; and hospitalization; only 26% buy online. Out of 4 types of insurance offered - critical illness is more likely to be bought via self-serve platforms, thanks to an abundance of information and education accessible through digital touchpoints such as personal finance content publishers and insurer websites. Buyers of critical illness insurance have sufficient reassurance from their chosen sources, they consider the purchase experience “relatively easy”. Claims-wise, meanwhile, there is a higher preference (71%) among critical illness policyholders to engage with an actual advisor.

Disruption - Artificial intelligence, real-time digital customer support, and "Insurtech" integrations, to name a few, will change much of the insurance industry. However a balance between ‘bots and bodies’ should be struck. Yet, we find the nuance of human interaction to still be of tremendous value in this equation – the customer.

FWD IPO Delayed

FWD Group Holdings Ltd - initial public offering of his Asian insurance group in US is stalling amid regulators’ increasing unease over the long arm of the Chinese government. The acquisitive insurer so far hasn’t been able to secure final approval from the U.S. Securities and Exchange Commission for the listing. The SEC has been asking the company about risks such as whether the Chinese government could extend its authority to Hong Kong-based firms like FWD.

The IPO was expected to raise about $2 billion to $3 billion. FWD was earlier targeting to start trading in New York this week. While it hasn’t formally withdrawn its share sale plans, the listing looks increasingly unlikely to be completed this year. 

The insurer has also faced pushback from some investors on concerns about the regulatory risks and valuation. Investors have shunned Chinese companies’ U.S. listings after ride-hailing giant Didi Global Inc. was slapped with a regulatory probe and banned from adding new customers just days after its IPO. The crackdown sparked a rout that wiped about $1 trillion globally off Chinese companies’ shares.

It remains unclear whether Beijing’s subsequent proposals, such as tightening rules for companies listing overseas, will be extended to Hong Kong companies. In July, the Biden administration issued an advisory saying that some business risks that were formerly limited to mainland China are increasingly a concern in the Asian financial hub.


FWD was started in 2013 by Li, a Hong Kong tycoon who also runs PCCW Ltd., one of the city’s major telecom companies. The Asian insurer’s existing investors include Swiss Re AG and Fang Fenglei, the Chinese dealmaker who started private equity firm Hopu Investment Management.

The company could revive its plans to list in New York at a later date if it receives regulatory clearance. It could also opt to sell shares in a different market like Hong Kong or raise funds through other methods, like a stake sale.

FWD had $62.5 billion in total assets at the end of June, according to its IPO filings. Over the past few years, it has expanded to 10 markets across Southeast Asia, Hong Kong, Macau and Japan.

Athene Life Re Ltd., an affiliate of private equity firm Apollo Global Management Inc., had agreed to buy $400 million of FWD stock in a private placement at the same time as the IPO. Athene and Apollo would also manage part of FWD’s investment portfolio as part of a strategic partnership, the prospectus shows.

PCCW and Li’s holding company Pacific Century Group had both expressed interest in investing as much as $100 million in FWD’s share sale. The Li Ka Shing Foundation, a charity started by Li’s father, was set to invest as much as $300 million.

FWD swung to a net profit of $205 million in the first half of the year, from a net loss of $318 million during the same period in 2020. Revenue rose 53% to $6 billion, according to the company’s prospectus.

LINA Employees Feel Betrayed By CIGNA

Many employees of LINA Life Insurance Co. of Korea feel betrayed as Cigna Group of the United States has decided to sell the Korean life insurance company to Chubb Group of the United States.

Some say that LINA employees should receive consolation money. There are precedents of an acquiring company paying consolation money to employees of an acquired company in the process of an M&A deal between domestic companies. For instance, when Hanwha Group absorbed Samsung Corning Precision Materials, Samsung Total, Samsung Chemical, and Samsung Techwin from Samsung Group, employees of these companies reportedly received more than 40 million won in consolation money per person from Hanwha Group. In another case, OB Beer employees also received 50 million won in consolation money per person when the company was sold to a foreign private equity fund.

It is unclear whether such consolation money will be actually paid to LINA Life Insurance employees because it is rare for an overseas parent company to pay consolation money to employees of its Korean subsidiary in the sale process.

LINA Life Insurance is known to be a healthy company among domestic life insurers. Its return on assets (ROA) is at the top level. As of 2020, its ROA was 7.27 percent, the highest among life insurers in Korea. The figure is outstanding, given that the ROA of second-ranked Prudential Life Insurance stood at 1.03 percent and the average ROA of other life insurers is a mere 0.36 percent. LINA’s net profit in 2020 was 352.7 billion won, coming in third after Samsung Life Insurance (928.8 billion won) and Kyobo Life Insurance (382.9 billion won).

However, the Korean insurance market has reached saturation and the overall life insurance industry has suffered a slump due to a prolonged low-interest rate trend. Cigna Group was well aware of LINA’s limitations in growth and has decided to withdraw from Korea, analysts say.

Cigna Group has decided to sell its operations in seven Asian countries to Chubb Group through a block deal. The seven countries include Korea, Taiwan, New Zealand, Thailand, Indonesia, Hong Kong and Turkey.

Toxic Swamp In Office

Employers are anxious about the latest "The Great Resignation" - back in March 2021, all the talk was of the 41% of employees considering leaving their job or changing their profession. Job vacancies in the UK were at a record high of almost 1 million. in US, with almost 11 million unfilled positions and many firms finding it difficult to recruit and fill key roles.

A toxic workplace – especially during the pandemic – is cited as a common reason for leaving a job, despite economic uncertainty. It can also leave employees feeling overworked, underwhelmed and demotivated. It can also come with physical symptoms like burnout, fatigue, stress and illness.

Although there’s no official definition of what makes a workplace toxic, there are a few signs to look out for that many toxic work environments have in common:

High turnover - While people moving on and new starters are a normal part of working life, a constant churn of people in a short time is something to look out for. Especially if people are moving on without another job lined up.

Negative environment - If there’s a lack of teamwork, a deep-rooted blame culture, plenty of finger-pointing, and everyone seems unhappy, you might have a problem with staff morale. This can be caused by a toxic workplace but can also contribute to a workplace becoming toxic.

High levels of sickness & absence - A toxic work environment can bring on sickness and absence as people experience burnout and stress or take time off to explore other job opportunities. An even worse indicator of a toxic workplace – especially against a backdrop of the pandemic – is if people are ill and at work.

Poor leadership - Poor leadership can come in many forms, but it’s something to watch out for in a toxic workplace. Whether it’s micromanaging, narcissism, lack of clarity, playing favorites or constantly changing the goalposts, poor leadership is often a one-way trip to toxicity at work.

Confusing communication - A lack of communication, incorrect information, no feedback and zero recognition for work are marks of poor communication. If employees and teams don’t communicate, this can quickly lead to a toxic environment.

What to do if you have a toxic workplace? - Once you notice a toxic trend, it’s important to address it as soon as possible. Creating a positive culture is vital for retention, recruitment, performance happiness, productivity, fulfilment, and employee engagement – and is more likely to change the way an individual feels about work. A toxic work culture isn’t usually something that can be changed by one person, but there are steps you can take.

Life Insurance - Protection Over Investment

As much as we are careful about having life insurance, most often we are not mindful of the products we are buying. Though these factors don't affect much when all is well, the same becomes critical in case the policyholder dies an untimely death.

Here are the two things you should be careful about while buying life insurance:

Mixing insurance with investment: Investments are made to create wealth in the long term and insurance covers financial risk. However, people often buy products that are sold as a mix of both. These are neither good as investments or insurance.

The coverage amount for a life insurance policy with maturity benefit is usually 10 times its yearly premium. At the same time, they provide a return of 3% to 4%. Now, if you buy a ₹25 lakh insurance policy for 20 years, the annual premium amounts to ₹25,000, while the returns would be around ₹7 lakh.

On the other hand, yearly premium for a ₹25 lakh term plan is roughly ₹5,000. Now, if you would buy a term plan instead of a policy with maturity benefit and decide to save the rest (suppose 8% interest rate), then after 20 years, its value would be close to 10 lakhs.

Taking more or lesser cover than one needs: Without putting much thought in it, people often buy life insurance based on factors like what they are suggested, what others are buying, what is enough to get tax benefit etc.

These are very wrong ways to decide on how much cover you would need. Rather while calculating the amount of life insurance, the policyholder should consider factors like future expenses, liabilities, future goals and pension for your spouse.

Also, it is important to ensure that the insurance is not taken for a too long period but, approximately till the time the policyholder will be working.

Malaysia Health Insurance - Repricing

As the number of Covid-19 infections declines and movement restrictions are eased, insurers may need to prepare themselves for a sharp increase in medical claims as policyholders seek or resume medical consultations disrupted by the outbreak of the pandemic.

Bank Negara Malaysia has cautioned that observations from other markets show that a potential sharp rise in medical claims could come from higher utilization of health services, albeit temporarily. In the short term, the average treatment cost could also increase due to poorer health conditions worsened by delays in seeking treatment. Demand-supply dynamics may also push costs higher, particularly for hospital supplies and services that may increase due to higher demand. 

Due to the pandemic, many have delayed non-critical treatments or postponed medical visits to hospitals. Claims data in 2018 shows that hospital supplies and services accounted for 60% and 70% of claimable surgical and non-surgical treatment costs respectively in Malaysia.

The central bank is of the view that higher charges from pandemic-related protocols are likely to persist in the foreseeable future. However, over the longer term, how the pandemic will affect underlying medical trends remains uncertain.

It highlights that the accelerated adoption of telehealth services by international insurers during the pandemic is a notable development, and has the potential to improve efficiency and reduce the cost of healthcare. However, what remains uncertain is the effects of long Covid-19 in the insured population, which could increase the utilization of healthcare services.

While there is a possibility that the number of insurance claims could increase sharply in the near future, it is also worth noting that the number of claims had decreased year on year in 2020, with claims mostly coming from crucial treatments, the report points out.

Claim Ratio Decreases During Pandemic - As a result, the combined ratio of the medical portfolio of insurers and takaful operators had decreased. The combined ratio measures the profitability of insurers measured in percentage, whereby 100% indicates that the premiums collected have been fully depleted by claims and expenses, and there is no profit left for insurers as a return for underwriting the portfolio.

The combined ratio of life insurance and family takaful’s individual medical portfolio had hovered between 90% and 100% from 2015 to 2019.

Despite the decrease in the number of claims in 2020, the report notes that the average cost per treatment had increased by 14% for non-surgical treatments and 15% for surgical treatments. These increases far outpaced the long-term trends of 8% for non-surgical treatments per annum and 9% for surgical treatments. This was partly attributable to the more severe and urgent nature of illnesses being treated and claimed for, as well as additional costs arising from pandemic-related protocols such as lab tests for Covid-19 and higher utilization of disposable medical supplies (including personal protective equipment).

Insurance Repricing Is Inevitable - In 2020, insurance and takaful operators were supposed to reprice medical insurance premiums. However, the planned repricing exercise was deferred due to the pandemic and to preserve the affordability of medical covers.

Insurance and takaful operators will be “carefully evaluating” the risks of continuing deferrals in the repricing cycle, which is typically every three to five years, especially for portfolios with the highest combined ratios prior to the pandemic. There is considerable risk that a sharp rebound in claims once the pandemic fears subside could lead to steeper or more frequent price increases in the near term. This could have a disproportionate impact on some individual policyholders given the larger adjustment made over a shorter period of time.

Repricing is a standard feature of medical reimbursement covers to ensure the sustainability of the medical insurance or takaful portfolios. Medical insurance/takaful portfolios become unsustainable when the premiums collected are insufficient to cover the expected claims cost, expenses and profit margin of the insurance and takaful operators. It had been concerned when insurance and takaful operators delayed repricing exercises for too long as a competitive strategy.

Lengthy delays are likely to result in sharp and unexpected premium adjustments later on to catch up with claims inflation. This may leave policyholders who are unable to afford the higher premiums with limited options to obtain replacement coverage due to advancement in age or changes in their health status.

EPF Savings Unable To Sustain Retirement

A recent survey showed a 50 per cent drop in Malaysian having faith that their Employee Provident Fund (EPF) savings will hold them in their retirement years. Only 15 per cent of Malaysians sampled in this latest survey believe their EPF savings can sustain them in their old age - a stark contrast to the 30 per cent rate last year. 

Contributing to these factors are the government’s policies that allowed Malaysia to withdraw money from their savings account during the two years Malaysia was struggling to control the Covid-19 pandemic. Plans like the I-Lestari which allowed RM500 monthly withdrawals for 12 months, I-Sinar which allowed withdrawals up to RM10,000 and i-Citra where eligible members are allowed to withdraw up to a maximum of RM5,000 subject to the total combined balance in both Account 1 and 2, have contributed to this lack of retirement savings.

52 per cent of those surveyed said they can’t survive more than three months without a job, 44 per cent said they spent more money than their earnings while 76 per cent felt they were still in control of their cash flow. There’s also been an increase of two per cent to 21 per cent this year for individuals who cannot save any money by month’s end based on the salaries they are earning.

Youth are not scoring high on managing their finances. They may be digitally savvy but savings wise the scope is poor. Two years battling the pandemic - Malaysian’s have realized the need for an emergency fund. The fact Malaysian’s have been dipping into their EPF savings means they have stopped believing that EPF can sustain them in their old age.

Insurer At Risk - High Bond Yield

The life insurance industry is at risk if there is a sharp rise in bond yields, with an extreme situation potentially causing insurers to liquidate investments reaching $1 trillion in the United States and Europe, the International Monetary Fund warned on Tuesday.

Vulnerabilities have increased for life insurers, the IMF said in its Global Financial Stability Report , noting the industry is at the “center of fixed income markets” owning about 20% of global bonds and 30% of credit investments. Life insurers have long-dated liabilities and are a critical source of demand for bonds with long maturities.

A stress scenario of a large and sudden increase in bond yields and corporate spreads could induce mark-to-market losses of 30 percent for insurers in some jurisdictions - pointing to US and UK insurers particularly sensitive. This could lead to the emergence of policy surrenders, forcing life insurers to liquidate investments, which, in the extreme, could reach $1 trillion in the United States and Europe.

Rising rates could cause problems for a range of financial institutions as well as life insurers. Rising rates could generate mark-to-market losses (for insurers) but that’s also true for other investors.

Bond yields have been rising as inflationary concerns have increased. The benchmark 10-year Treasury is close to a 4-month high. Life insurers with “longer durations and a greater share of riskier corporate bonds in their portfolios would be hit the hardest by a sudden increase in yields.

A severe scenario of a sudden spike in yields could lead to policy surrenders. A scenario of bond yields increasing 200 basis points or more—similar to the worst-case yield increase and wider corporate stress scenario—could be associated with a significant increase in lapse rates.

Insurance Company Denies Accident Claim

An insurance company has been ordered to compensate a man more than a million yuan (US$155,200) after he accidentally ran over his two-year-old son. The man, surnamed Wu, ran over his son who was playing beside the vehicle when he was backing out near his home in August, 2020. The boy suffered brain damage in the traffic accident and subsequently died in hospital.

Wu failed to follow safe driving specifications and should bear the full responsibility of the accident, the police ruled. Wu and his wife asked their insurance company for compensation of 1.38 million yuan, because the car owned by Wu's wife was covered by their policy.

The insurance company refused and said the accident was beyond the coverage of either the mandatory liability insurance for traffic accident or commercial insurance. The company said the accident did not happen on a public road and the parents failed to look after their son.

The Qingpu court said the insurance company should take responsibility to compensate according to their agreement with the couple. The accident happened mainly because of the vehicle and the wrong operation of Wu. The negligence of the couple partially led to the outcome.

The insurance company should take 80 percent of the responsibility and compensate a total of 1.11 million yuan. The judge said no insurance fraud was involved because the victim was the son of the driver, and the accident has been analyzed as a traffic accident.

NBA Players - Insurance Fraud

More than a dozen former NBA players have been charged in New York federal court in an alleged multi-million-dollar health insurance fraud scheme to rip off the league's benefit plan. 
The 18 former players named in the indictment include alleged scheme ringleader Terrence Williams, selected 11th overall in the 2009 NBA draft by the then-New Jersey Nets, six-time NBA All-Defensive Team member Tony Allen, former Lakers Guard Shannon Brown and Ronald Glen Davis, who played for the Bolton Celtics, Orlando Magic and Los Angeles Clippers over the course of his career. Allen's wife, Desiree Allen, is the only woman charged in the indictment.

Those indicted face charges of conspiracy to commit health care and wire fraud as well as aggravated identity theft. By late morning, 16 of them were in custody after arrests in a dozen locations nationwide.

According to the grand jury indictment, the defendants allegedly engaged in a widespread scheme from at least 2017 up to around 2020 to defraud the NBA Players' Health and Welfare Benefit Plan by submitting fake reimbursement claims for medical and dental services that were never actually rendered. In some cases, the players who submitted the alleged false claims weren't even in the United States at the times they allegedly received the treatments. They allegedly filed fake invoices saying they had to pay for the phantom procedures out of pocket. Those allegedly fraudulent claims totaled about $3.9 million, from which the defendants got about $2.5 million in fraudulent proceeds.

Williams allegedly orchestrated the years-long scheme and recruited other NBA health plan participants to assist by offering them fake invoices to support their claims. He allegedly received at least $230,000 in kickback payments from 10 other players in return for providing the alleged false documentation.

The 34-year-old Williams also allegedly helped three co-defendants -- Davis, Charles Watson Jr. and Antoine Wright -- obtain fake letters of medical necessity to justify some of the services on which the false invoices were based. Williams also allegedly impersonated an individual who processed plan claims at one point in furtherance of his alleged scheme.

Among the false reimbursement claims described in the indictment is a $19,000 claim that Williams filed for chiropractic services he allegedly never had and for which he received $7,672.55 in reimbursement. Williams also allegedly obtained a template for a fake invoice designed to appear as if it had been issued by the office.

Fake chiropractic treatment invoices were allegedly also created for Davis, Watson Jr. and Wright and emailed to Williams. The template had the date, invoice number, services and a charge of $15,000 filled in but left the "bill to" box, where the name of the patient would ordinarily be found, blank.

Williams is accused of emailing those fake invoices to the other defendants named in the indictment. He and defendant Alan Anderson, who briefly played for the Nets from 2013 to 2015, allegedly helped get fake letters of medical necessity for Davis, Watson Jr. and Wright in furtherance of the fraud scheme as well.

Several of the fake invoices and medical necessity forms stood out because, “they are not on letterhead, they contain unusual formatting, they have grammatical errors” and were sent on the same dates from different offices.

In another example, Manhattan U.S. Attorney Audrey Strauss told a news conference, defendant Gregory Smith submitted paperwork for a root canal in Beverly Hills, when he was in fact playing basketball in Taiwan at that time. Others submitted false root canal paperwork as well.

Some of the players were told to repay the money they received from the NBA’s health plan once it was determined that the claims were false. Some did, while others didn’t, according to court documents.

Also named in the indictment: Brooklyn-born Sebastian Telfair, who played for a half-dozen NBA teams including the Cleveland Cavaliers, Clippers, Celtics and Minnesota Timberwolves and Darius Miles, drafted third overall by the Clippers in the 2000 NBA draft and a first-team NBA All-Rookie player.

Prosecutors are seeking "any and all property, real or personal, that constitutes or is derived, directly or indirectly" from the alleged fraud in restitution. If any of that property can't be acquired for whatever reason, the U.S. government says it will seek forfeiture of any other property of the defendants up to the same value.

Medical Insurance Fraud - China

A national operation targeting medical insurance fraud has seen 251 criminal groups dismantled and 3,819 suspects detained in six months. 

By the end of September, medical insurance funds totaling approximately 230 million yuan (about 35.6 million U.S. dollars) had been retrieved during the operation that was jointly launched by the MPS, the National Healthcare Security Administration (NHSA) and the National Health Commission on April 9. 

In the first eight months of 2021, the NHSA also handed punishments to approximately 212,500 of the 516,600 medical institutions it inspected, and retrieved 8.8 billion yuan. Police will step up efforts to combat medical insurance fraud, and will welcome the public to offer information.

Selling Insurance Yo The Dead

An insurance agent in Odisha, India, was arrested for allegedly providing life insurance for four people who were already dead by the time the policies were taken out.

Kabiraj Behera took out 23 policies from Life Insurance Corporation of India (LIC) and placed them in the names of four people who had died between 2013 and 2019. The total value of the policies was INR18.1 million (SG$326,000).

Behera had been an agent for LIC since 2003, but is believed to have first committed the offences in 2013. Behera would place the insurance in the dead person’s name then wait three to four years before forging a death certificate in order to claim the death benefit.

Investigations revealed that despite the insured persons being dead, the premiums for the policies were being regularly paid. Behera kept the insured amount per policy below INR1 million, which meant that the claim will need to be approved only by LIC’s branch manager without being escalated to the divisional office.

The police believe that the ghost insureds’ beneficiaries were in on the scam. A search of Behera’s residence revealed evidence such as voter identity cards and bank passbooks of the dead individuals, as well as correspondences made by the LIC with the beneficiaries.

Police are also investigating whether any other LIC officials acted as accomplices for the fraudulent operation.

Cigna Sells Life And A&H To Chubb

Cigna will sell its life, accident and supplemental benefits businesses to Chubb for $5.75 billion in cash. The businesses, which are located across seven countries, will allow Cigna to focus on its healthcare businesses. Cigna in recent years has been adding more health and prescription benefits and medical care provider operations to compliment its commercial health insurance business, growing government-subsidized offerings such as Medicare Advantage plans and individual health insurance such as Obamacare.

Cigna, which bought the pharmacy benefit manager Express Scripts 3 years ago, has a big business administering coverage for large self-insured employers and is also packaging an array of medical, pharmacy and behavioral health benefits for employers large and small. In addition, Gigna's Evernorth healthcare services busibess is growing and the company is looking to expand that as a way to compete with rival health insurers like UnitedHealth Group, which owns the Optum health services business, and CVS Health, which owns the national drugstore chain more than 1,000 MinuteClinics and the third largest health insurer in Aetna.

Cigna’s deal with Chubb is expected to be completed in 2022, “subject to applicable regulatory approvals and customary closing conditions. Once the transaction is completed, Chubb will acquire Cigna's “life, accident and supplemental benefits businesses in Hong Kong, Indonesia, Korea, New Zealand, Taiwan and Thailand as well as Cigna's interest in a joint venture in Turkey.” And in Korea, Chubb will “acquire and plans to continue to operate the business under the LINA Korea (Life Insurance Company of North America Korea) brand. 

Cigna will continue to operate international health businesses for “the globally mobile population, as well as local market services in the Middle East, Europe, Hong Kong, Singapore and its joint ventures in Australia, China and India.

Founder Life Insurance - Restructuring

Ping An Insurance Group Co. is considering a sale of Founder Group’s life insurance business, people familiar with the matter said, in what would be the first disposal after the latter’s court-led restructuring.

The Chinese insurance giant is working with financial advisers on the potential sale, which could value Founder’s life insurance unit at as much as $1 billion. Other insurers and investment funds have shown preliminary interest in acquiring the business. Considerations are at an early stage and no final decision has been made. 

The new company was created following the restructuring of Peking University Founder Group Corp., the troubled business arm of a top Chinese university. Its assets include Founder Securities Co., Founder Technology Group Corp. and China Hi-Tech Group Co.

In July, a Chinese court approved a restructuring plan in which a consortium including Ping An and Zhuhai Huafa Group Co. agreed to invest 53.7 billion yuan ($8.3 billion) to 73.3 billion yuan into the company. Earlier this year Ping An said it would buy a 51.1% to 70% stake in Founder Group for as much as 50.75 billion yuan.