India Life Insurance Industry Crisis Ahead

The widespread financial irregularities and mismanagement plaguing our life insurance firms, which have put the entire industry at risk, are alarming. According to data from the Insurance Development and Regulatory Authority (IDRA), 31 out of 36 life insurers are yet to settle about 11 lakh policyholders' claims worth Tk 3,643 crore—with clients remaining uncertain as to when they will get their money back.

Mounting Problems - Experts say that poor investment decisions, high agent commissions, excessive management costs, and unhealthy competition are to blame for this. The situation has particularly worsened in recent years, with IDRA data showing that the claim settlement rate among life insurers dropped from 85 percent in 2020 to 72 percent in 2023. Moreover, of the 31 insurance companies with unsettled claims, nine have the worst settlement rates. 

For example, Fareast Islami Life recorded Tk 2,577 crore in claims but paid just Tk 32 crore. Similarly, Padma Islami Life paid only Tk 4 crore against Tk 226 crore in claims, Progressive Life Insurance settled Tk 6 crore of Tk 174 crore in claims, Sunflower Life Insurance settled Tk 2 crore of Tk 141 crore, and BAIRA Life Insurance paid Tk 2 crore of Tk 67 crore in claims.

According to the Insurance Act of 2010, claims must be settled within 90 days of submitting all required documentation after a policy matures. However, the fact that policyholders are struggling to get their money back for much longer is entirely unacceptable. Additionally, the amount and types of irregularities that are to blame for this are staggering. 

Political Interference - Yet, regulators reportedly never took any major steps against these companies due to political reasons and legal limitations. That political constraints limited regulators' ability to do their jobs seems to have become a common excuse now across industries. As a result, however, it is the ordinary people that are now struggling. But should the concerned authorities be let off the hook for their failure to perform their duties and protect citizens? And what about those who were directly responsible for the corruption in this sector? It is incumbent upon the government to identify those who are directly responsible for such irregularities and mismanagement and hold them accountable.

Moreover, the government needs to develop a comprehensive strategy to ensure that clients recover their money from these companies. This should include taking legal action against directors involved in financial irregularities and confiscating their assets. The government should also consider monetising the fixed assets of corrupt companies to settle claims.

Clearly, mismanagement in the sector has led to a significant loss of credibility. Therefore, the government should involve experts and other stakeholders to fully reform the sector and ensure that regulators are empowered to effectively oversee it in the future.

Allianz Mulling Existing India Bajaj JV

India Bajaj Finserv announced on Tuesday that Germany's Allianz SE is considering exiting their joint ventures in life and general insurance, a partnership that has spanned over two decades, reported Reuters.

Bajaj Finserv, which holds a 74% stake in both joint ventures, disclosed that Allianz, holding the remaining 26%, has signalled its intent to divest as part of its shifting strategic priorities.

Established in 2001, Bajaj Allianz General Insurance ranks amongst India’s largest private insurers, whilst Bajaj Allianz Life Insurance is one of the country's fastest-growing life insurers, managing assets worth over $11.89b.

Taiwan Life Insurer Switch To Protection Product

Life insurers in Taiwan have shifted their focus towards sales of protection-type products and continued to strengthen their capitalization. Taiwan Life Insurance is expected to push accident and health insurance products with higher and sustainable contractual service margins. These products posted a 16% y-o-y increase in first-year premiums in 9M2024. US Fed rate cuts may drive more demand for US dollar-denominated variable-interest life insurance products. An ability to balance premium growth and margin expansion will differentiate insurers’ credit profiles.

Most life insurers' profitability improved notably in 1H2024 from 1H2023 on stronger new business margin and investment returns on stock market performance. The new foreign currency volatility reserve system announced by the Financial Supervisory Commission of Taiwan in August 2024 allows more operational flexibility to manage hedging costs.

Insurers will continue to issue either onshore or offshore bonds through wholly owned special purpose vehicles (SPVs) overseas (which count towards capital), to prepare for TW-ICS, the upcoming new regulatory solvency regime with higher standards on capital requirements.

Independent Distributor Versus Captive Agent

In 1999, affiliated distribution and independent distribution sold approximately equal amounts of new premium (48% vs 47%). As the number of independent agents grew and surpassed the number of affiliated agents, the distribution of life insurance sales shifted with independent distribution becoming the leading channel.

In 2023, independent distribution market share made up 53% percent of all U.S. life insurance new premium sold, compared to just 38% from affiliated agents.

In every product line except whole life, independent distribution represents the largest premium market share and this is driving the growth in the industry. Total new premium sold in 1999 was $9.3 billion. The expansion of independent distribution has propelled new premium to top $15.6 billion last year.

As an example, indexed universal life (UL) new premium, which was negligible in 2011, now represents a quarter of new premium sold today. Independent distribution sells more than 90% of IUL premium. Independent channels also sell a majority of fixed UL and variable UL premium. Even for whole life premium — which remains predominantly sold by affiliated agents — market share for independent channels has jumped nine points in the past decade.

In light of these sales trends, it is clear that all life insurers have to develop multi-channel strategies to remain competitive. Part of that strategy involves building strong relationships with intermediaries, which represent thousands of independent agents.

The Role Of The Intermediary
Intermediaries — primarily independent market organizations (IMOs) and brokerage general agencies (BGAs) — play an essential role with independent financial professionals by helping them build and grow their practices, acting as the expert go-between for financial professionals and carriers. Among the services they offer to agents include training and development, marketing and technology support, underwriting support and case management, and a product platform — vetting products and carriers for their network to sell. In other words, their relationship with carriers has a big impact on what independent agents sell to their clients.

Top Intermediary Priorities
Research shows the top three reasons intermediaries place business with a specific carrier are pricing, underwriting/sales support, and compensation. While pricing and compensation are largely proprietary to each carrier, there is a lot of room to build a competitive edge through sales support.

Intermediaries are asked - what types of support carriers could provide to help drive growth. Their responses fell into three main themes: 

a: Faster and easier underwriting processes;
b: Direct contact to home office personnel that can resolve issues immediately – which 

    means build a strong internal and external wholesaling program; and

c: Offering competitive and innovative products that will perform well in the long run.

These themes are echoed in other studies of experienced financial professionals. The top reason experienced financial professionals give for placing business with a carrier is because the carrier offers a strong sales process that provides a positive experience for the sales professional. Carriers that invest in making the process easier may be able to overcome slight pricing and compensation disadvantages.

Where Technology Can Help
The industry has already made significant process expanding digital services such as e-signature, e-delivery, automated underwriting, etc., streamlining the process and lowering costs. As new technologies, particularly artificial intelligence (AI), become more readily available, intermediaries are hopeful it can cut costs and improve productivity.

Research indicated 65% of intermediaries say the cost of distribution is increasing and are looking to technology to mitigate rising costs. Investments in technology span from marketing and sales enablement to data analytics, cybersecurity and compliance. Nearly 4 in 10 intermediaries agree that ChatGPT and AI will become an essential tool for BGAs and IMOs and how they do business.

This push to modernize and use technology will help address the growing U.S. life insurance need gap. Four in 10 American adults say their families would face financial hardship should the primary wage earner die unexpectedly. Making it easier and quicker for independent agents to engage today’s consumer and help them get the coverage they need is a worthy goal.

Developing New Product - Life Insurance

Life and health insurance product development can be extremely rewarding for both insurer and consumer if done right. Handling product development the right way, however, is very challenging. Too often, insurers face obstacles in meeting customer needs over other considerations such as launching a product to outperform the competition or incentivizing distribution via commissions. Coupled with the fact that the shelf life of an insurance product is often short, the typical approach to product development may lower consumer confidence in insurers and the industry.

Since the process is iterative and non-linear, it is possible to return to a preceding principle before completing development. The phases includes:

Empathize with the customer

Define the problem

Ideate

Prototype

Test

Empathize With The Customer
Human beings’ capacity for empathy is one of our most admirable qualities. Product innovators and designers should ensure empathy is kept at the center of design and development. This means putting real customer needs above all.

The key to success for any new product — be it insurance or otherwise — is that it serves the real needs of its target consumers and that they realize the product’s value enough to purchase it.

If product design and benefits are so technical that most laypeople do not understand them, chances are the resulting insurance product will become another push product with a short shelf life.

Feedback from real target consumers through Voice of the Customer (VOC) programs is a great way to identify market needs. When planning VOCs and/or focus group discussions, all elements – from the questions asked to the information sought – need to be thought through. Most importantly, the objective of the exercise should be crystal clear.

Feedback on distribution is equally vital but should be validated from actual target consumers. Influential distribution partners (agents, affinity partners, etc.) often demand a “product” that serves a channel’s interests more than end consumers.

Define The Problem
Empathy leads to understanding and the ability to articulate nuances of target consumers’ real needs in a problem statement. The best way to create this statement is to ask questions, such as:

What are customers’ pain areas?

What are their key drivers for purchasing insurance?

What challenges do they have with existing insurance products?

How likely are they to buy an insurance product should the benefits meet their expectations or needs?

If they were to buy insurance cover for themselves and/or their family – what is the optimal premium price point?

Ideate
With the problem statement defined, it is time to start looking for possible solutions. There could be many solutions to the same problem.

Ideation can happen in various ways – brainstorming, focus group discussions, consultation with experts, etc. The primary objective in this phase should be to explore all possible solutions rather than narrowing down to one right away. Since the design thinking process is iterative/non-linear rather than linear, it is important to validate and reconfirm customer needs with proposed solutions before selecting the best option.

Prototype
After identifying possible solutions, narrow them down to the one or two that best fit the objective. Develop a working product prototype(s) covering possible variants. The prototype(s) should help address all the gaps identified as well as meet end customer needs. Once complete, test within the team or across other teams and departments to gather feedback and fine tune.

Test
Finally, test the prototype with a sample of target consumers through individual feedback or focus group discussions. Every attempt should be made to extract comprehensive feedback on features, design, marketing, price point, and coverage, as well as whether consumers are able to relate to the product.

The keys to success are to experiment, understand the consumer needs clearly, develop appropriate solutions quickly, and be courageous enough to test, fail, adapt, and learn.

By placing the end customer at the center, the resulting paradigm shift in insurance product development could result in rapid business growth and greater insurance penetration.

Below are a few suggestions for consciously keeping the end customer as the central focus – a win-win formula for insurance product development:

1: Ease Of Onboarding

a: End-to-end digital process and infrastructure for seamless sales-to-issuance experience
b: Leveraging data/customer information to pre-populate forms and application materials (subject to applicable data privacy and protection laws)

2: Simpler Underwriting Questions

a: Using behavioral science strategies to design underwriting questions from a layperson’s perspective and factoring in cultural influences to improve customer understanding and facilitate disclosure
b: Asking relevant and reflexive questions by tapping into consumer data across the value chain and using technology to aid in risk segregation

3: Marketing/Sales Pitch

a: Simpler brochures and interactive/gamification on digital applications
b: Guidance for distributors on how to handle objections

4: Claims Handling

Using machine learning techniques for identifying “red flags” or supporting a robust automatic claims approval process

Closing the insurance coverage gap will require abandoning the status quo for new processes and new ways of thinking. In the area of product development, applying design thinking could be a vital step in making that happen.

Disruptions To Life Insurance Industry

Fundamental changes in industry structure have created significant competitive pressure. The emergence of several private capital–backed platforms—which have evolved their primary focus to include new sales as well as the acquisition of legacy blocks of business, has changed the game in new-product development, where such platforms have become leaders in several retail and institutional categories.

Life insurance leaders who take a deliberate, unbundled approach to their business—and double down on their strengths—will outperform in the decade ahead. Making this transition will not be easy, but failing to act will only result in further challenges.

Life insurers also face drastic changes in other parts of the value chain. In general account asset management, a significant spread between top- and bottom-quartile performers has emerged as poorer performers struggle with dynamic asset allocation as well as investment performance within each allocation.

Changing Market Dynamics In Distribution —such as a shift toward independent channels, new technological capabilities, and evolving investor perceptions—also raise new important strategic questions for insurers to consider. Life insurers continue their struggle to modernize operations and technology as further investments fail to reduce net expenses in the system.

These new market dynamics may be daunting, but leading life insurance leaders also see opportunities to pave new paths toward value creation. To compete, insurers should carefully consider each part of the industry value chain and determine where they can and cannot reasonably have competitive advantage.

In this Review, McKinsey share insights and implications across each major component of the life insurance value chain—new-product development, distribution, asset management, and operations and technology—and outline three main life insurer archetypes that will likely emerge: product origination specialists, balance sheet specialists, and integrated insurers

Before insurers can determine in which parts of the value chain they are best positioned to win, they must first gain an understanding of market dynamics and trends, then determine what it will take to be distinctive.

New Life Insurance Product Development And Risk Assessment
New-product development has historically been perceived as an area of distinctiveness for life insurance companies. Shifts within the marketplace, however, have already ignited unbundling of new-product development, with a clear bifurcation in natural ownership among public life insurers, mutual insurers, and private capital–backed insurers.

Analytics covers life and retirement, including the major forces at play in the current life insurance industry, several ways insurers have adapted, and opportunities that life insurers and stakeholders can consider going forward—as well as the fundamental implications for their business models as a result.

Life Insurance Market Dynamics and Trends
Over the past ten years, we have seen the entrance and expansive focus of private capital–backed platforms, from legacy back books to new-business generation.

These platforms now have significant market share in select retail annuity sales categories—specifically fixed and fixed-indexed annuities, where they have 20 and 40% shares of new business, respectively.

Even in variable annuities, where public insurance carriers have maintained their leadership position, those insurers are pulling back by focusing on investment-only variable annuity products and reinsuring or selling back books to private capital–backed platforms,

Beyond the retail annuity segment, these platforms are rapidly expanding their position in institutional categories, such as funding agreements and structured settlements, as well as in pension risk transfer.

In the past decade, market positions on the life insurance side have drastically shifted, as well. US public life insurers were the leading providers of individual life insurance, with 42% of the market. However, US mutual companies have replaced that leadership, now accounting for 56%.

While private capital–backed platforms have not yet targeted the individual life insurance market to the same extent as the annuities market, it may become their next frontier.

In the medium term, however, investors’ return expectations will increase as volatility pushes up nominal risk-free rates and risk premiums, requiring life insurers to deliver a higher ROE to meet shareholder expectations.

Furthermore, higher interest rates could also result in deterioriation of credit, resulting in higher delinquencies and ratings migration, which could directly affect investment portfolios.

Achieving distinction in new-product development will require leading capabilities across customer insight–led product design, risk assessment, pricing, and claims management. In most cases, insurers will likely focus on building these capabilities in a few core product categories consistent with their risk appetite, return expectations, capital efficiency, investor considerations, and ability to develop competitive differentiation.

In product Categories Where They Don’t Have Competitive Advantage, Insurers Will Increasingly Seek To Exit.
This trend is well under way, as the US M&A market continues to build on the $620 billion of life and annuity assets that have already traded to private capital–backed platforms. It is anticipated that there will, indeed, be a “middle ground” where insurance carriers can leverage their own capabilities in certain product lines and partner with others for complementary capabilities.

As a result, models such as white labeling, coinsurance, and flow reinsurance are likely to grow in use, and insurers may increasingly distinguish between product design, distribution, and balance sheet risk retention. Indeed, by 2023 the volume of flow reinsurance across US life insurance increased to $598 billion.

General Account Asset Management
General account asset management has become a critical source of value creation among life insurers—and one with wide disparity between top and bottom performers. This gap will provide further impetus for asset management unbundling.

Investment portfolios are designed for a wide variety of liability profiles, inherently driving differences in asset allocations and yield. Nevertheless, performance variability across general accounts is significant. Among insurers with more than $50 billion in assets, top- and bottom-quartile performers are separated by 135 basis points (bps) of yield.

The prolonged impact of historically low interest rates has forced investment portfolios to reconfigure their strategic asset allocations. Many insurers increased their allocations to high-yielding debt, structured products, private credit, and other alternative asset classes. North American insurance companies allocated $355 billion to alternatives.

As insurers consider shifting toward higher-yielding alternative asset classes, they will have to marry their investment decisions with rigorous risk management, making deliberate choices about their risk tolerance and ensuring their risk management capabilities are commensurate with their risk appetite.

When making such choices, insurers will have to consider capital availability, robust monitoring and stress testing of various types of risks (credit, liquidity, duration), and active reviews based on market conditions. Taken together, we believe more evolved and dynamic strategic asset allocation will continue in the years to come.

Insurers that continue to own asset management will have to meet a high bar. They must have strong asset origination capabilities, industry-leading talent and investment processes, and quantifiable proof points of investment alpha. Further, such insurers will have to optimize the role they play across their investments—acting as an allocator among certain asset classes and an operator in others, such as real estate. Finally, they will need to have leading risk management capabilities commensurate with their placement on the risk/return frontier.

33% of life insurers outsource more than 50% of their assets to unaffiliated managers. Life insurers with less than $10 billion of assets—which represent $267 billion of general account assets —may be prime early candidates on which to grow such businesses and to capture the capital-light, fee-based income they offer.

Insurers unable to meet this bar have several options, ranging from complete outsourcing to outsourcing select capabilities to specialists while building certain capabilities in-house. Those that have distinctive asset management capabilities, however, may create the next frontier of third-party asset management.

Such insurers may launch new outsourced chief investment officer (OCIO) or sub-advisory businesses targeted toward subscale insurers.

Life Insurance Distribution
For many insurance carriers, the distribution function holds a place of pride and significance beyond all other functions. And many insurers are now thinking about earnings streams from distribution in different ways.

Indeed, insurers have witnessed how investors reward the capital-light earnings generation of pure-play distributors—such as brokerages, independent marketing organizations, and field marketing organizations—which have generated 2.6 times the Total Shareholder Return of life insurance companies and currently trade at nearly 2.9 times the P/E multiple of their life insurance counterparts.

Historically, life insurers have invested heavily in their captive distribution, including recruiting and training their own sales forces to ensure that their new products were marketed and sold properly.

Captive distribution, however, is no longer economically viable for most insurers. The increased commoditization of many insurance and annuity products, coupled with the increasing open architecture of insurance distributors, has resulted in the slow and steady shift away from affiliated agents.

In 2000, affiliated agents sold nearly half of all individual life policies in the United States. In 2020, that share had fallen to one-third. The difference in share has been captured almost entirely by independent agents, banks, and broker–dealers.

For insurers that no longer have captive distribution or that can no longer afford to maintain it, the focus will shift to more effectively managing third-party intermediaries. They will also focus on building unique value propositions beyond product features and pricing. Such propositions will have to include more digital and analytics capabilities and technological connectivity—leading to a seamless end-to-end experience from manufacturer to distributor to customer.

Developing such capabilities and creating this seamless experience will be table stakes for insurance carriers that maintain captive distribution as a primary source of competitive differentiation.

The more interesting questions will focus on how to create additional value from distribution. Indeed, some insurers are already looking at their captive distribution as value-creating hubs and sources of fee-based earnings through the sale of wealth management and third-party protection products.

Going forward, we anticipate that public insurers will also report their earnings from distribution as a stand-alone segment, as they seek the higher multiples investors offer on this part of their earnings.

Operations And Technology
Life insurance is one of the very few industries—within and outside financial services—that have seen cost ratios increase over the past 20 years. Yet this headline does not tell the full story.

There is a wide disparity in efficiency across life insurers. According to McKinsey’s Insurance 360° performance benchmark, top-performing North American life and annuity insurers have half the expense ratio of their bottom-quartile peers. Technology and operations-related costs, which have grown faster than other categories, represent a big part of the difference in performance.

Complex legacy-technology systems and platforms are the biggest bugbear for almost all life insurers. They create complexity, increase costs, and hinder insurers’ ability to launch new products and manage existing portfolios.

Many insurers have tried to address their legacy-technology problems by outsourcing to technology providers. In most instances, however, performance falls far short of promise: insurers are beset by issues of delayed transitions, significant cost overruns, and service levels that fail to meet expectations. This often creates a vicious cycle.

One of the greatest challenges insurers face in modernizing their technology pertains to older blocks, where many investments are fundamentally uneconomical. Technology investments on back-book policies (particularly closed blocks) will amortize over a shrinking number of policies— and such investments will not fuel future growth.

While technology investments are uneconomical, current technology platforms are becoming obsolete, with fewer and fewer programmers available to maintain these legacy platforms. The status quo is clearly not viable.

The choice for insurance carriers in addressing operations and technology is not straightforward. Operations is core to the touchpoints along the insurance customer journey, and insurers want to continue to own their client relationships. Companies that want to maintain such ownership and make it a source of competitive differentiation will need to ensure that their technology investments are accretive and tackle the challenges they face head-on.

These insurers will need to develop a new set of robust and distinctive capabilities, including the following:- 

1) Modern cloud-first approaches to managing applications and data

2) AI and advanced analytics to tackle complex issues across data extraction, premium 

    calculations, reserving, and operational tasks

3) The ability to attract and retain a different type of technology talent, including engineers,  

    developers, and data scientists
4) A culture of software engineering and more agile ways of working through tighter ] 

    collaboration between business and technology

For most insurers, building these capabilities on their own will be difficult and require significant bandwidth—taking focus away from their core business. This will create an impetus for the next generation of technology service providers to offer a more modern, customer-centric, integrated, end-to-end solution to serve both open and closed blocks.

Life insurance unbundling is already under way. Insurers are making deliberate choices across the value chain, building new capabilities, and shifting their business models. And while the pace of unbundling may be up for debate, it will continue nevertheless.

Unbundling will also lead to the blurring of boundaries between traditional competitors and more fluid competitive dynamics. Insurers will have to think beyond the “zero sum” approach and welcome new collaborative partnerships with different stakeholders in the spirit of creating greater “shared value.” In fact, insurers competing head to head in one area of business could end up being partners in another area where they have complementary capabilities.
FAQ

Consumer Friendly Distribution Channel

Analysts claimed that most bankers are working on some sort of digital distribution channel for their consumer banking products: online account opening, digital loan application, digital cross-selling, mobile marketing, etc. Nearly every survey you see published shows financial institutions making digital product distribution at least a top-five priority now and for the foreseeable future.

Distribution Disruption - The pandemic exposed the lack of attention to digital distribution channels—except for the megabanks and the digital banks, who were clearly ahead of the curve and have reaped the rewards of having these alternative channels up and running (at the expense of the community Financial Industry (FI) who are losing in terms of both new customer acquisition and being identified as the primary FI.

However, here’s what’s strange about all this focus on distribution: most FIs have done nothing to actually enhance or differentiate the consumer banking products they’re trying to distribute more widely. They’re still offering the same boring products (namely checking and savings accounts) and consumer loans they’ve provided for years with no new features or benefits.

Major Product Innovators - have been the digital banks and fintechs like Chime (“Get Paid Early” and “Fee-Free Overdraft”), SavvyMoney (credit scores and pre-approved loans), Acorns (personal money management and investing), and Affirm (buy now, pay later at the time of purchase).

It’s clear that these businesses have no choice but to distribute their products digitally. Still, it’s also clear that they understand that to be successful, they must offer deposit and loan products that don’t look like the ones you can buy at practically any FI.

And, they’re beating traditional FIs to the punch on this product differentiation and enhancement—especially with younger consumers.

Outdated Product Driven - Granted, one of the challenges companies offering any kind of product is how to drive awareness and visibility for it from marketing and fulfilling it with a great buyer experience. An “if we build it, they will come” philosophy is naïve and isn’t viable for newly offered products. For existing products that are essentially commodities, “if we build another distribution channel, we will sell more” is a likewise fantasy-minded approach.

Product & Distribution - must be emphasized equally for optimal and sustainable success, especially when talking about traditional consumer banking products. Creating a broader, varied way to market and sell these products isn’t enough. If your checking account or consumer lending products don’t offer anything you can’t get at a zillion other places, having a digital way to market, sell, and distribute it will offer (at best) minimal marginal gains, which doesn’t help you in the awkwardness of trying to make your case for an acceptable ROI with your boss.

Why are product distribution & product equally important? There’s a lot of noise competing for our attention, especially for consumer banking products. If you want to cut through the noise and resonate with existing customers or prospects, you have to create awareness and provide easily identifiable (and hopefully different) value that can be marketed, sold, and distributed however the end-user wants to buy it and receive it.

A robust consumer banking product with an average distribution channel is likely to perform better than an average consumer banking product with an average distribution channel. In other words, distribution itself can’t make up for a product that hasn’t been differentiated, upgraded, or enhanced in a consumer-relevant way.

You have to look no further than the digital banks and megabanks to see that they’re winning by focusing on both product and distribution, and not just one or the other. A very successful retail banker summed it up this way, “Product features are more important than ever and so is a consumer-friendly distribution channel for those products.”

Insurance Intermediary Defraud Insurer

An insurance intermediary in Hong Kong has been found guilty of conspiring with two policyholders in a scheme to deceive an insurer into making accident insurance payouts based on falsified injury claims. The conviction, handed down by the Eastern Magistrates’ Courts on Oct. 31, follows an Independent Commission Against Corruption (ICAC) investigation into alleged fraudulent claims.

Life Insurance Fraud - Lalwani Jay Jerome, 35, who was previously affiliated with Asia One Asset Management Limited as a REFERRER , was convicted on 4 counts of conspiracy to defraud, according to Hong Kong Common Law.

Magistrate deferred sentencing to Nov. 19, pending a background report. Bail was granted for Lalwani, who was ordered to pay restitution of approximately HK$52,000 to the insurer.

According to the court proceedings, Lalwani conspired with two policyholders, Tam Kai-chun and Lam In-kwan, to submit claims for injuries they did not sustain. In 2017 and 2018, Tam and Lam had obtained life insurance policies with accident riders from AIA International Limited through Lalwani, who at the time was working as an insurance referrer. These policies covered medical expenses and injury-related compensation, but claims required documentation such as medical receipts and records of sick leave from licensed medical providers.

Investigation Uncovers Falsified Documents - ICAC investigators discovered that the documents submitted by the policyholders and Lalwani, including medical receipts and sick leave notes, were falsified. Tam and Lam did not, in fact, suffer the claimed injuries nor undergo the stated medical treatments.

Based on these fraudulent claims, the insurer was misled into issuing compensation payments totalling over HK$52,000. Both policyholders, Tam, 37, and Lam, 33, were charged separately by the ICAC for their roles in the fraud and had already pleaded guilty. Their cases are set for mention on Nov. 25.

Life Insurance Referrer Model

The Hong Kong Insurance Authority (IA) has issued its latest Conduct - which includes significant updates for the insurance industry, such as new compliance regulations for brokers, the introduction of licensing fees, and refined standards for life insurance brokers, particularly in the context of referral business.

Referral Model - A major highlight in this issue is the IA’s new guidelines for insurance brokers that use referral models, especially those aimed at attracting Mainland China visitors (MCVs).

The IA emphasized that brokers must ensure Unlicensed Referrers do not participate in regulated activities, which includes advising on or selling insurance products. Non-compliance could result in severe consequences, such as suspension or revocation of licenses.

Brokers are now required to implement stringent due diligence processes for referrers, maintain comprehensive records and regularly evaluate compliance with these guidelines. Insurers working with these brokers must also ensure regulatory adherence through well-defined agreements, ongoing training, and regular monitoring. These measures are intended to protect the market’s integrity and ensure fair treatment of consumers.

In tandem with these compliance updates, the IA announced that starting September 23, 2024, fees will be introduced for processing insurance intermediary license applications and related notifications.

This development follows the expiration of a five-year waiver, which began when the regulator took on the regulatory role for insurance intermediaries in 2019. The new fee structure, developed after industry consultation, is designed to cover the costs associated with the IA’s regulatory functions.

Additionally, the fees will fund improvements to the IA’s technology-driven licensing processes and support public education campaigns that aim to help consumers make informed insurance choices.

Other Conduct In Focus Key Topics - The latest issue of Conduct in Focus also covers several other key topics. These include:
- best practices for general insurers when issuing renewal notices;
- the importance of participating in the SMS Sender Registration Scheme to 

  safeguard customers from fraudulent activities; 

- and the advantages of using insurers’ online self-service portals.

Insurance Authority Market Conduct Division Overhaul - In addition, the IA announced the reorganization of its Market Conduct Division into two new divisions: the Conduct Supervision Division and the Enforcement Division, to emphasize both preventive measures and enforcement actions.

As the industry adapts to these new compliance requirements and the introduction of fees, the IA has offered assurances that it will collaborate closely with stakeholders to ensure a smooth transition.

Tik Tok To Tokopedia

A year ago, TikTok’s ecommerce business in Indonesia was thriving. With its viral videos, TikTok had become a worldwide phenomenon, and it was translating its influence into a powerful new revenue stream by letting users buy and sell things while its videos played.

Indonesia was a critical market and the first place where TikTok rolled out this feature. The app, owned by the Chinese tech giant ByteDance, had about 130 million users, nearly as many as it had in the United States. Since its launch here in 2021, TikTok Shop had become one of the most popular places for Indonesians to buy things online.

Regulatory Guideline Change - Then one day, TikTok said it was removing Shop from its app in Indonesia. The government declared that social media platforms would no longer be allowed to process online payments. TikTok was forced to abruptly halt its ecommerce operations.

Some Indonesian officials argued that TikTok was so popular it threatened to monopolise online shopping, while others said it didn’t have the right license. TikTok’s defenders in the industry said the government was acting on behalf of TikTok’s competitors in Indonesia.

The government’s edict did not name TikTok. It didn’t need to. No other app blended social media and ecommerce the way TikTok did.

India Payback - Dealing with official scrutiny is familiar terrain for TikTok. The government in India, once home to the app’s largest audience, banned TikTok in 2020 as payback for a violent border dispute with China. In the United States, TikTok is facing a possible ban that could begin as soon as January after spending years fielding concerns about its influence and security.

But the threat in Indonesia had the potential to deal an especially devastating blow to ByteDance’s ambitions to make a lot of money with ecommerce. ByteDance wanted TikTok to repeat the success of its sister app, Douyin, whose live video shopping business in China topped US$200bil in transaction value in 2022.

Old Wine New Bottle - TikTok executives scrambled for a way to continue to offer ecommerce. Word spread through the Indonesian tech community that TikTok was looking for a local company to team up with. And within weeks, it was ready to buy a stake in Tokopedia, a former startup that had become one of Indonesia’s main ecommerce platforms.

That date had been one of the biggest days for deals on ecommerce platforms in China for years, and the trend had caught on in Indonesia. In recent years, the government promoted it as a day for buying from small businesses.

TikTok Shop restarted as a pilot program under government supervision on Dec 11. As it had before, Shop appeared as a tab within the TikTok app. But now it was decked out with Tokopedia’s logo and signature green branding.

The deeper change was on the back end. When a shopper clicked “Buy”, the checkout process ran on Tokopedia’s system. TikTok Shop was still part of a social media platform. But to satisfy the government, the transaction took place on infrastructure built by an Indonesian ecommerce company.

Tokopedia - was a key player in Indonesia, one half of the Indonesian tech conglomerate GoTo. The companies behind GoTo spent years developing payment and delivery technology that made it possible, in a country of 270 million people and 17,000 islands, to buy things online and receive them in a day or two. The deal integrated these systems with TikTok Shop.

TikTok received majority ownership of Tokopedia, which paid TikTok for the right to operate TikTok Shop in Indonesia. GoTo kept just under a quarter of Tokopedia’s shares, and was promised a cut of profits from future TikTok Shop sales. TikTok paid US$840mil and said it would invest further, up to a total of US$1.5bil, in the combined entity.

Worldwide - where TikTok Shop held nearly 20% of the ecommerce market last year, officials say they are mulling rules for the platform. And the Indonesian government isn’t done regulating the ecommerce industry. This month, Indonesian officials said they had asked Apple and Google to block the Chinese fast-fashion platforms Temu and Shein from app stores in the country.

TikTok Shop is available in eight countries, including the United States and Britain. But the rest are in Southeast Asia, where its transaction value topped US$16bil last year. If the app is banned in the United States, TikTok will depend even more on Southeast Asia to keep its ecommerce ambitions alive.

TGI Friday Blames Covid

Casual American dining chain TGI Fridays filed for Chapter 11 bankruptcy yesterday in the US state of Texas. The bar and grill chain — known for serving up hamburgers, chicken wings and signature cocktails — said its dozens of restaurants in the United States and abroad would remain open to customers while the company uses the restructuring process to “explore strategic alternatives in order to ensure the long-term viability of the brand.”

TGI Fridays Inc, which filed for bankruptcy, owns and operates 39 restaurants in the United States. Not included in the Chapter 11 process are 56 franchise TGI Friday’s locations in the United States and 40 other countries, which are independently owned, the firm said.

Manocha said the Covid-19 pandemic and the company’s capital structure were the primary reasons for its financial issues.

Tokio Marine Paused Southeast Asia Operation

Japanese general insurance giant Tokio Marine has paused the sale of its $1bn Southeast Asia life insurance business, partly due to a dispute with a Malaysian partner over an expiring bancassurance agreement. 

The sale has attracted interest from Japanese and Middle Eastern buyers, said the first source. Tokio Marine last month filed a lawsuit against RHB Bank in Malaysia, seeking to enforce its right of first refusal over the 10-year that is due to expire by 31 December 2024

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Tokio Marine also asked RHB for details of the final bid that RHB has agreed to accept from other parties for a new deal, and applied for an interim injunction to prevent RHB from finalizing an agreement with other parties.

Given the pending dispute, buyers were unable to make offers that would meet Tokio Marine's valuation expectations. Some buyers had separately offered to buy only part of Tokio Marine's Southeast Asia life insurance business, but the insurer insisted on selling it as a whole.

The paused sale comes as Tokio Marine has been reviewing its businesses to boost profitability. The Tokyo-headquartered company divested its Tokio Marine Highland's U.S. construction division to Intact Insurance Group in August 2022.

Founded in 1879, Tokio Marine was Japan's first non-life insurance company and it has since expanded into life insurance and now has a presence in 46 countries besides. International businesses contribute 75% of its profits and Japan 25%, its website shows.

Consumers Disrupting Unilever Indonesia

Unilever will make "drastic" changes in Indonesia as Indonesian consumers boycott multinational brands in response to the war in Gaza and exacerbate the business' existing distribution problems.

Unilever, which makes Dove soap, Knorr stock cubes and Ben & Jerry's ice cream, said in February that fourth-quarter sales growth in Southeast Asia had been hurt by shoppers in Indonesia boycotting brands of multinational companies "in response to the geopolitical situation in the Middle East."

Unilever would aim to make its brands "more contemporary" given the "significant societal change" going on. He said he expected to see an improvement in the next six months. Unilever Indonesian business has underperformed for nearly a decade. Investors are unlikely to believe the turnaround this time will be any different storms we've seen in the past?

Unilever's Indonesia unit reported an 18% revenue drop in the third-quarter, driven by a decline in volumes. A revamp of the distribution system was underway to stabilize prices and the group's efforts were already yielding some results.

Automated Underwriting

The Harel Group continues to invest in innovative solutions to meet the diverse needs of insurance agents and policyholders. The new and exclusive tool within the "Optiweb" system provides agents with an innovative solution that delivers immediate online responses regarding the acceptance conditions for the requested insurance and the personal premium the client will need to pay, including any medical additions if applicable. This occurs immediately upon completing the sales process and answering the health declaration.

Acceptance conditions for the insurance candidates are confirmed at the time of signing the proposal, all in a single process. Additionally, if a candidate needs to submit documents based on their personal medical situation to determine acceptance conditions, feedback is provided, detailing the required documents, along with an option to attach these documents within the same process. This development enhances the professionalism of the agent and significantly shortens the proposal handling time until policy issuance, allowing agents to allocate additional resources to customer service.

Harel representatives noted that the automated underwriting relies on existing underwriting capabilities within Harel's core system. The core process can weigh the various declarative and historical underwriting characteristics of insurance candidates, combined with business logic and agent benefits, thus enabling precise underwriting pricing during the sales process.

Furthermore, the system allows Harel's underwriting department to construct and update underwriting rules to improve automation rates without relying on additional developments. The externalization of core engine rules to digital channels is facilitated by a middleware layer based on MULE SOFT products, allowing real-time traffic through secure APIs to Harel's innovative production simulator, Optiweb, developed using cutting-edge technologies (React/Node) and implemented on AWS cloud technologies.

Strategic Planning - Be Organized

Many business leaders feel like they come close to drowning every day in a never-ending flood of emails, paperwork, meetings, and last-minute demands. Just trying to keep up with it all keeps them from the projects they’re supposed to be leading to move their companies forward.

It would be beneficial to change your tactics and adopt an organized approach. You will find yourself not only getting more things done but getting the right things done. "Being organized” is just another way of saying you’re on top of everything, which determines much of your success—from big issues like forecasting company growth and executing company initiatives to small tasks like calling someone who can help you get the big jobs done.

1. SMART GOAL SETTING
Most people in business have goals, but not everyone sets them effectively. Goals are mostly vague and poorly defined, with no sense of why they matter or how to measure them to determine success. The worst mistake is just having too many goals. Three is the perfect number. Fewer than that lacks challenge, and more than that is little more than a “to do” list.

Be sure to give each goal a series of actionable items—we call them “lead measures” because they lead to the ultimate goal. These are the actions you take daily and make yourself and staff accountable for.

2. STRATEGIC PLANNING
Every company needs a strategic plan—a vision that declares where they want to be in one year, three years, five years, and beyond. It is recommended to have a one-year and a three-year plan. If it’s over one year, it goes on the three-year list and we do it all over again.

The plan should include the goals (and lead measures) that support the strategic plan and make it happen. Do both goal setting and strategic planning each year, spending weeks with our entire staff and figuring out what needs to be delegated and to whom. Success is predicated on the distribution/deliveries being successful. Without clear direction, training, owner manuals, ongoing support, and other organizational tools, it doesn’t happen.

3. DELEGATING ADVERTISEMENT
Hire people who excel at it to help keep me on track. If you’re more of a big-picture thinker, this is essential. But even if you’re good at keeping up with the details, you still need to delegate some of the work to others. First, you simply can’t do everything, no matter how hard you try. Also, there may be others on your team who are better at certain projects than you are. They deserve a chance to show leadership, and the company will probably benefit when you utilize them.

4. TAKING ACTION
It’s possible to be too organized; some people spend all their time planning and outlining every little thing when they should go out and do it. This is a sign of fear, or at least uncertainty. The more you plan because you “just want everything to be perfect,” the longer you can delay putting yourself and your work out front for everyone to see—and judge.

Clear the clutter. Get everything off your desk except the project you’re working on now; piles of paperwork are a nagging reminder of everything you have to do. Focus on one thing at a time, and don’t keep everything else where it’s a constant distraction.

Who Is Judy Faulkner

Epic Founder and CEO Judy Faulkner signed a pledge to give away the majority of her money to charitable causes. Ms. Faulkner joined "The Giving Pledge," a commitment by some of the world's wealthiest individuals to donate the bulk of their fortunes to philanthropy. Through this pledge, Ms. Faulkner plans to donate 99% of her assets estimated to be $7.7 billion.

However, much of Ms. Faulkner's wealth is tied up in Epic stock, where she holds nearly half the company's shares. To prevent a large sell-off from destabilizing the company, she created a trust to oversee the gradual sale of her shares. Epic repurchases approximately $100 million worth of stock each year, which is then distributed to employees, while the proceeds are directed to her charitable foundation, Roots & Wings.

Launched in 2020, Roots & Wings is run by Ms. Faulkner's daughter, Shana Dall'Osto, and has quietly donated $200 million to 320 organizations over the past five years. The foundation operates on a model called trust-based philanthropy, which offers nonprofits unrestricted, multi-year grants with minimal reporting requirements, allowing them to pursue their own missions without strict oversight.

In 2020, Roots & Wings granted $15 million to 115 organizations. By 2024, Ms. Dall'Osto projects the foundation will donate $67 million to 305 organizations, with plans to increase that amount to $100 million annually by 2027.

Changes In Distribution - Kills American Tire Distributors Inc

American Tire Distributors Inc., which sought bankruptcy protection in 2018 after the defection of two major manufacturers, has filed for Chapter 11 again as it considers a sale process to cut debt.

The company made the voluntary filing in Delaware with $1.9 billion of debt, according to a court document. It has entered into a restructuring support agreement with lenders “that contemplates transitioning ownership of the company through a competitive sale process".

The lender group, which represents 90% of the company’s term loan, is providing a so-called stalking horse bid, meaning that it’s subject to better offers, should any materialize, according to the filing. The cohort includes Guggenheim Partners Investment Management, KKR & Co. Inc., Monarch Alternative Capital, Sculptor Capital Management Inc. and Silver Point Capital.

American Tire will continue to operate across its nationwide network. It has received commitments for $250 million in new financing from the lender group, and access to $1.2 billion from lenders under an asset-based lending facility, according to the release.

The company was thrown into disarray in 2018 when the makers of Goodyear and Bridgestone tires decided to deal directly with consumers through their own networks. In what a company executive at that time described as an almost simultaneous blow, Sears Holdings Corp.’s auto centers agreed to install tires bought on Amazon.com.

Profits got a temporary boost after the pandemic, as a sharp decline in auto sales triggered a surge in demand for used cars and replacements parts, such as tires. But margins rapidly narrowed and the company suffered as customers moved toward lower-priced products, the company’s chief restructuring officer said in a court filing.

Bamboo Spirit & Management

Bamboo spirit and Chinese management philosophy have helped many Chinese companies stay resilient and grow rapidly like bamboo. However, the effectiveness of this approach has largely depended on the decisiveness and personal charisma of the business leaders deploying these philosophies and strategies.

Here are some steps all business leaders can take to make Chinese management philosophies work for their organizations:

1. Think about the long-term, while constantly developing new short-term tactics. The external environment is complex and ever-changing, so make sure long-term vision and strategic direction are clear. Prioritizing flexibility and rethinking short-term tactics can help companies maintain vitality and competitiveness – even in the face of a crisis.

2. Build flexibility and resilience. Flexibility and resilience should not rely on a few individuals, but should be built upon an effective organizational structure, management mechanisms and corporate culture. Firms that establish flat, agile and platform-based organizational structures can respond quickly to market changes. Scenario planning can also help to identify uncertainties and create contingency plans, spreading a mindset of flexibility across the organization.

3. Foster continuous learning. CEOs and top executives must be open to the Confucian idea of maintaining a zeal for learning. In addition to learning from leading companies in your field, others with strengths in specific domains can also offer great benchmarks for analysis.

4. Value collaboration. Avoid dictatorial decision-making by being open to diverse viewpoints. Be ready to relinquish power and use collective decision-making. This can also help to avoid errors of personal judgment.

5. Shoulder social responsibility. Finally, Chinese management philosophy suggests companies should promote the harmonious growth of both the business and of society.

All business leaders should consider thinking about these management philosophy ideas and keep the bamboo and its strengths in mind when making important decisions or changes. Using the metaphor to nudge your thinking might help you approach business and leadership issues more effectively.

High Policy Surrender - Restructuring Agent Commission

Private-sector life insurers are preparing to adjust commission structures for distribution channels, following regulations that came into effect on 1 October requiring insurers to offer higher surrender values for endowment policies.

Leading life insurance firms are set to meet next week with the Life Insurance Council, an industry association, to establish a uniform commission framework. Options under consideration include clawbacks, commission deferrals, and outright reductions.

The objective is to maintain consistency in commission payments or sales remuneration across the industry and mitigate disruption for distributors. With clawbacks of commissions from agents if a policy is reduced early, insurers wish to discourage mis-selling and to ensure that they explain insurance policies fully to prospective buyers.

India’s biggest insurer, the only state-controlled Life Insurance Corporation of India, has reduced the first-year commission rate on its policies to 20% from 25% and the bonus rate to 8% from 10%.

Insurance For Aging Population

One in five elderly are not keen on life insurance ownership , yet nearly a third of East Asia’s population and almost a fifth of Southern and Western Asia’s population is projected to be aged 65 years old and up by 2060 – about 1.2 billion people.

Asian market regards public health care very high, however, some aged markets (South Korea, Japan and Taiwan) had lower confidence, mainly due to the already weak public systems.

Life insurance had the lowest overall level of interest (83%) for ageing populations, compared to private health (97%) and critical illness (CI) insurance (96%). In terms of previous habits, over a third (35%) of Asians said they owned life insurance, whilst 29% owned private health and 35% had CI insurance.

On a per-market basis, Japan and India have the largest share of life insurance ownership (58% and 54%, respectively).

many procrastinated on purchasing in life insurance due to portions of the coverage being excluded or declined based on pre-existing conditions. On top of that, a third of respondents indicated that premium prices were unaffordable for all three types of plans.

Icon Group Pyramid Scheme

Thai police have arrested 18 people, including three celebrities, and seized luxury sports cars and millions of dollars in connection with a pyramid scheme selling health and dietary supplements, officers said today. The arrests came after more than 1,000 people filed online fraud allegations against The iCon Group, a company they said had lured them into buying products and making financial commitments.

The company’s founder and CEO, Warathaphon “Boss Paul” Waratyaworrakul, was detained on Wednesday along with a top TV host and an actress who had allegedly helped convince victims to join the scheme.

Authorities said they had frozen 125 million baht (RM16 million) held in the bank accounts of the company’s four executives and confiscated luxury vehicles including Porsches and Ford Mustangs. Police were looking into bank accounts and cash transfers linked to the suspects to find out if any more people were involved.

The company allegedly lured its victims by offering cheap online sales courses. Once enrolled, it coerced them into making further purchases and financial commitments ranging from 2,500 baht (RM320) to 250,000 baht (RM32,000), which was used to advertise for new recruits.

Some of the victims — who ranged from low-income workers to a high-earning footballer — had paid more than 600,000 baht (RM77,000) to the company, according to local media. Police are yet to tally the total amount swindled.

Thailand is no stranger to public fraud cases. A “Forex-3D” scheme last year tricked thousands into investing in a fake foreign exchange trading platform. The world’s longest non-life sentence, according to the “Guinness Book of Records”, was imposed on Thai pyramid scheme fraudster Chamoy Thipyaso, who was jailed for 141,078 years in 1989. However, she was released after only eight years behind bars despite having conned some members of the royal household.

CEO Of New China Life Insurance - Arrested

Li Quan, former chairman of New China Life Insurance Co Ltd has been arrested for suspected embezzlement and bribery, marking him as the latest high-profile figure caught in a sweeping anti-corruption campaign targeting China’s financial industry.

Li is accused of serious violations, including severe breaches of Communist Party discipline and abuse of power, following an investigation by the National Supervisory Commission that concluded in late September.

Li is accused of ignoring regulations by accepting invitations that could compromise his impartiality, breaching organisational principles to benefit others in hiring processes, and profiting from inappropriate financial activities through his position at a state-owned enterprise.

 Li was expelled from the Communist Party and his illegal gains have been confiscated, according to the statement.

Who Is Li Quan - Born in 1963, Li held various senior roles in the financial sector after obtaining a master’s degree in economics from the People’s Bank of China Graduate School in 1988.

From 1988 to 1990, he served as a business manager in the banking department of China Rural Trust and Investment Corporation. Between 1991 and 1998, he worked at Charoen Pokphand International Finance Co, where he held positions including general manager of the funding department and assistant general manager.

He spent 12 years at Bosera Asset Management Co before moving to NCL in 2010. At NCL, he took charge of the asset management branch, according to mainland media outlet Caixin.

In 2019, Li became president of NCL in charge of day-to-day operations. He was appointed chairman in 2022. However, he abruptly resigned in August 2023, citing age-related reasons, just before the allegations surfaced.

Crackdown On Systemic Corruption - Li’s case is part of a broader crackdown on systemic corruption within China’s financial sector over the past few years, which has seen a handful of senior officials ensnared in similar scandals.

In 2022, the Central Commission for Discipline Inspection (CCDI), China’s top anti-corruption watchdog, published a report that listed “relying on finance to exploit finance” as one of six major problems found during an inspection tour of 25 financial institutions.

The phrase “relying on finance to exploit finance” describes unethical practices by financial sector professionals or institutions who leverage their status for personal gain through illegal activities. This behavior, characterized by rent-seeking and irregular operations, undermines the fairness and development of financial markets.

The CCDI report identified integrity risks – and credit risks in particular – in several Chinese financial institutions, including China Development Bank, Agricultural Bank of China, and Industrial and Commercial Bank of China.

On Thursday, former central bank deputy Fan Yifei was sentenced to death with a two-year reprieve for bribery. He was found guilty of illegally accepting gifts and property worth over 386 million yuan (US$54.55 million) by leveraging his senior roles at the central bank and other financial institutions, including China Construction Bank.

Last year, Zhang Huayu, the former vice-president of China Everbright Bank, was sentenced to 12½ years for taking bribes and misusing his position of influence.

Cai Esheng the former vice-chairman of the now-defunct China Banking Regulatory Commission, was handed a death sentence with a two-year suspension for charges of bribery and power abuse.

In 2021, Lai Xiaomin former chairman of China Huarong Asset Management, one of China’s top four state asset managers, was sentenced to death for accepting 1.79 billion yuan in bribes as well as corruption and bigamy.

The same year, Hu Huaibang, former Communist Party secretary and chairman of China Development Bank, was sentenced to life behind bars for taking a total of 85.5 million yuan in bribes between 2009 and 2019.

Public Bank Buys LPI Capital

Public Bank Malaysia’s second-largest lender by market value will buy a 44.15% stake in LPI Capital from the family of its late founder Teh Hong Piow for 1.72 billion ringgit ($400 million).

LPI Capital Bhd (LPI) is an investment holding company. The company underwrites a range of general insurance products for individuals and businesses through its subsidiary, Lonpac Insurance Bhd (Lonpac).

The bank will pay 9.80 ringgit for each LPI Capital share held by Teh’s family and their investment vehicle Consolidated Teh Holdings, representing a 25% discount to the last traded price of Lonpac Insurance’s parent before trading was suspended on Wednesday. The transaction will require Public Bank to buy the rest of LPI Capital. PBB shares dropped 4.8% to 4.35 ringgit, while LPI shares slipped 3.2% to 12.58 ringgit in late morning trading on Friday in KuaLa Lumpur.

Separately, the estate of PBB’s late founder (who passed away in 2022 at the age of 92) plans to sell a portion of their shares in Public Bank shares over a five-year period, his daughter, Teh Li Shian, was quoted as saying in local media reports.

The family along with its investment firm Consolidated Teh Holdings, owns about 22% stake of the bank. That accounts for the bulk of their net worth of $5.4 billion, making them the third richest family in Malaysia.

Singapore Oppose Allianz-Income Deal

The Singapore government plans to stop a proposed deal by Allianz SE to buy a majority stake in a homegrown insurance firm, three months after the transaction sparked a backlash from the public. The government assessed the proposal and decided it wouldn’t be “in the public interest” for the Income Insurance Ltd deal to proceed in its current form.

The government isn’t satisfied that Income can fulfil its social mission as a co-operative after the acquisition and is open to any new arrangement which Income may wish to pursue, whether with Allianz or any other partners, so long as the concerns highlighted are fully addressed.

In July, the German company said it planned to buy at least 51% of Income from NTUC Enterprise Co-operative Ltd to strengthen its presence in Asia. The proposed S$2.2 billion (US$1.7 billion) transaction drew criticism after it was announced.

TEMU Barred From Indonesia

Indonesia will uphold its ban on e-commerce platform Temu due to fears it could disrupt the country’s micro, small and medium enterprises. The global online marketplace is operated by PDD Holdings, which also owns the popular Chinese online retailer Pinduoduo. 

Indonesian authorities have been on alert for Temu’s entry into Southeast Asia’s largest economy in recent months. Its business model of selling products directly from factories to consumers goes against Indonesia’s trade regulation requiring an intermediary or distributor. Ministry prefers the digital space to be filled with things that make society more productive and profitable. If it is detrimental , our micro, small and medium enterprises will be destroyed if left unchecked.

Ministry of Cooperatives and SMEs - claimed that - allowing Temu in Indonesia could hurt the economy and society. Temu cannot enter because it damages the economy, especially Indonesian micro, small and medium enterprises. The Ministry of Cooperatives and SMEs previously said Temu had thrice tried to register to operate in Indonesia.

Since September 2022, it has tried to register with the Ministry of Law and Human Rights for trademark rights, said Mr Fiki Satari, Special Staff for Creative Economy Empowerment at the Ministry of Cooperatives and SMEs, in August.

Its registration was not approved because there was already a business using the name. Temu’s application became a topic of discussion after the company appeared at the 2024 E-commerce Expo held on Sep 24 and 25 in Greater Jakarta.

Temu, which is available in about 60 countries, entered Southeast Asia last year, beginning with the Philippines last August and Malaysia last September. It expanded into Thailand in July this year.

In October last year, Indonesia also banned TikTok Shop, citing the need to protect smaller merchants and user data. But the short-form video giant bought 75% stake in Indonesia ecommerce player Tokopedia in January, marking its re-entry into the market.

Singapore Wealth Planner Duped Customers

A man has been charged after he allegedly duped four people into transferring $348,000 in total to his personal bank accounts, and tried to cheat two others of $240,000.

Wealth Planner - Pang Yu Heng, 27, who was a wealth planning manager with DBS Bank at the time of the alleged offences, was charged on Sept 5 with four counts of cheating and two counts of attempted cheating. The Singaporean is accused of cheating each of the four victims of between $24,000 and $190,000. His employment was terminated in June 2023.

Pang allegedly promoted fictitious fixed deposit products to his customers, promising high interest rates. In June 2023, officers received a report from a local bank about his alleged offences. He is accused of cheating his first victim of $74,000 over two occasions between early March and April 11, 2022.

He allegedly used a similar method to cheat three others from around March 15, 2022, to March 1, 2023. In addition, he is said to have tried but failed to cheat two people of another $240,000 in total in January and March 2023.

He is expected to plead guilty on Oct 17. For each count of cheating, an offender can be jailed for up to 10 years and fined.

Prudential Singapore Duped in $470,000 Claim

An insurance agent allowed a friend, who was then working with a similar company, to make fraudulent claims, and the company was then duped into paying out more than $1.88 million in total.

3 Counts Of Cheating $470,000 - Benjamin Song Junde, 40, who was working with Manulife (Singapore) at the time, was sentenced to a year, six months and two weeks’ jail on Oct 3. He had pleaded guilty to three counts of cheating and a money laundering charge. Eight other charges were taken into consideration during sentencing.

Song derived nearly $470,000 in personal gain from the offences linked to the three proceeded cheating charges.At the time of the offences, his friend, Charn Sze Choong, 38, was working as a claims assessor with Prudential Assurance Co Singapore. His case is pending.

Bookie - Song acted as a “bookie” for Charn’s gambling activities. Charn would place online poker and soccer bets through the accused, and would settle his gambling winnings and debts with the accused on a net basis each week.

Song was also insured by Prudential under five policies which his wife held, and Charn was aware that Song was insured under them. Charn started entering fictitious outpatient insurance claims (FOICs) under the policies in Prudential’s Life Asia claims management system. Charn would then approve the FOICs in the system in his capacity as a claims assessor.

Prudential was deceived into believing that the claims were legitimate, and the company then made payouts into various bank accounts. These included Charn’s own bank accounts and those linked to Song, said the prosecutor.