Covid - Inoculate Or Full Hospitalization Cost

The financial cost of remaining unvaccinated ⁠against COVID-19 is rising. Health insurance providers are now asking people who contract the disease to share the cost of treatment, which can get expensive if it requires a lengthy hospital stay.

Early in the pandemic, most private insurers waived cost-sharing for patients under their plans or even covered the full cost of treatment. In November 2020, nearly 90% of insured individuals would have had their out-of-pocket costs — including copays, coinsurance or payments toward a deductible — waived if they had been hospitalized for COVID-19.

Inoculated or pay - with effective coronavirus vaccines widely available, most insurers are no longer waiving those costs. The change reflects a broader push by U.S. companies to nudge workers into getting inoculated in hopes of holding down medical expenses. To that end, Delta Air Lines this week said that it would charge unvaccinated employees an extra $200 a month for health coverage. Today, by contrast, more than 70% of the nation's largest insurers are no longer waiving COVID-19 treatment costs. Another 10% of plans plan to phase out cost-sharing by the end of October.

Insurer profits - soared during the pandemic, as consumers skipped routine care and delayed elective procedures. Health insurance companies were spending so much less than expected because during pandemic. No one went to the hospital, elective procedures were delayed and insurers had more money than they were supposed.

Vaccines are preventive medicine - The rationale is simple: Subsidizing COVID-19 patients' treatment runs counter to efforts to encourage Americans to get preventive care for the disease. The hospitalization rate of unvaccinated COVID patients is 29 times that of vaccinated patients. Now that COVID-19 is largely preventable for most adults and employers are pushing people really hard to get vaccinated, it makes a lot less sense for those employers to be giving people who do get infected a break.

Still, patients won't be responsible for the full cost of treatment, which can reach up to $50,000 for a severe case. Fully insured patients hospitalized with pneumonia — which involves similar treatment as for people with COVID-19 — typically end up owing around $1,300, for example. The cost of hospitalization for COVID-19 is tens of thousands of dollars, but most people admitted to hospital, even if they're paying cost-sharing, are only responsible for a fraction of that. It's not like they're hit with a big bill.

BJAK Online Life & Medical Insurance

BJAK has expanded its insurance offerings from auto to life and medical on its website. Bjak is the first in South-East Asia to offer instant customization and online purchase for life and medical insurance policies that were previously only available through agents.

Customers can now customize plans according to their needs for medical coverage, critical illness and life coverage easily using the platform. The online application can be completed in five minutes. As physical meet-ups are not allowed during lockdown, Bjak offers a seamless, transparent, end-to-end service for customers to customize and purchase instantly.

Bjak offers free health screening, unlimited doctor consultations, medicine delivery and a dedicated 24-hour claim service to address customer issues that are commonly faced in the industry. Bjak is also the first to employ in-house licensed agents with no-commission to offer customers unbiased advice and support. On top of that, all claims are processed by insurance experts.

The platform presently offers full comprehensive policies from two major insurance partners, including term-life and investment-linked products. Bjak is in talks with three more leading insurers and its agencies to offer more policies on the platform.

Buying Car - Dealer To Agency

The automotive retail business is being disrupted. Many automotive brands no longer believe in the need to have dealerships to reach out to the market, partly because of the digital revolution and declining margins in the industry. This disruption has been happening in several countries around the world, or at least automakers have already stated their intention to do away with dealerships. In Australia, marques such as Mercedes-Benz and Honda have decided to take this route.

In Australia - Mercedes-Benz has announced that it will do away with dealerships and adopt an agency model in 2022 after trialing it with the EQC SUV. Honda turned to the agency model in July, with up to half of its dealerships in Australia being axed. In Europe, Volkswagen AG announced that all of its dealer partners have signed a new retail agreement, starting with its all-electric ID range. It is believed that the company will start using the agency model in 2023.

Industry observers are of the opinion that the agency model will be brought to Malaysia soon. This would mean car dealers will have to accept a different arrangement in the future, one that will change their relationship with the original equipment manufacturers (OEM).

Dealers is considered an unnecessary cost. If customer can buy directly from the brands, why do you need a dealer?” A dealer typically makes a 6% to 8% premium on the ex-factory price of a car. A research firm noted that the ongoing Covid-19 crisis is leaving severe and lasting effects on the automotive retail and distribution cost for OEMs, as it costs them billions of dollars to prop up their retail partners. With retail revenues expected to decline between 20% and 30% this year, dealers require support from the OEMs. These support measures increase the OEMs’ cost of distribution by 10% on average.

OEMs that employ direct and online-focused sales models can achieve cost of distribution of below 10% of gross revenues, compared with between 25% and 30% by OEMs with traditional sales and distribution channels.

Agency sales model to be the best answer. Acting as a ‘golden mean’ between direct and indirect sales, agency models allow OEMs and dealers to benefit from a more centralized sales model, creating efficiencies in the overall system. Altogether, the cost of distribution for OEMs can be decreased by one to two percentage points in the short term and up to 10 percentage points in the long term.

For an automotive manufacturer in an increasingly competitive environment, earning more by removing the middlemen is something they must consider in order to stay afloat. And the middlemen they can easily control are the dealers.

In Volkswagen model, it lays the contractual foundation for integrating the online business with the showroom-based business. With the agency model, customers can order vehicles directly from the group and select their preferred dealer for personalized customer care and local services.

Under the agency model, dealers will assume the role of an agent to sell cars to private customers and small commercial enterprises, according to Volkswagen. These agents will look after the acquisition, sales consultation, organizing of test drives, transaction process and vehicle handover in coordination with Volkswagen.

The preferred dealer chosen by the customer at the beginning of the sales process receives the same commission and bonus as it would in the showroom, even if the vehicle is purchased online directly from the automaker.

Volkswagen decides on the vehicle price, thus dispensing with complicated price negotiations. Dealers can therefore count on calculable compensation regardless of whether the customer buys the vehicle online or in the showroom.

The agency model differs from the dealership model in that the agents do not have to invest in a showroom or hold inventory. Without these investments, the agents do not have to worry about making a return on investment as they only have to sell the cars. This means the car prices will also be fixed by the OEMs, rather than being differently priced from one dealer to another due to their respective cost structure. So, from a customer’s point of view, the cost of a model will be the same across the market.

The OEMs will provide the agents with the demo cars for customers to test drive. The agent may also be able to lease the demo car from the OEM for its customer to test drive. In an agency model, the agent will only be paid commissions.

One of the pioneers of this model is Tesla, as it does not have a dealership showroom. Anyone who wants to purchase a vehicle can do so via its website. While Tesla does have stores, they are small pop-up stores in a mall that the brand owns, more as a showcase than a dealership.

Can this be done in Malaysia - While the agency model sounds fair and workable, will it work in Malaysia and what will happen to the investments already made by the dealers? The millions of ringgit sunk in to develop the showrooms’ sales, service, spare parts and other systems will have to be recouped somehow.

According to an industry observer, a car showroom can cost around RM20 million (Proton) to RM50 million for luxury brand. 

Dealer Termination without compensation - This is where it could get tricky, especially for the dealers. That is because most dealership agreements in Malaysia are renewable on a yearly basis, according to industry insiders, who also point out that there is no compensation clause in those agreements. If an OEM wants to change the dealership model to an agency model, they won’t have to pay any compensation for the millions of ringgit in investments that the dealers have put in to build the dealership.

Indeed, the move out of the dealership model has been in the works for quite some time. Even some major Malaysian dealerships have started to move out or indicated that they want to move away from this business segment over the last few years.

While it is unclear whether OEMs in Malaysia will move to the agency model, what is clear is that this is the way forward for automotive companies globally, with many brands taking steps towards this direction. Hence, auto dealerships in the country should prepare for an eventual disruption in the industry.

Revenue Group Buys Into VSure Tech

Revenue Group Bhd is expanding into the insurance sector with the purchase of a 25% stake in VSure Tech Sdn Bhd (VTSB) for RM12mil cash consideration. Revenue said its unit Revenue Harvest Sdn Bhd (RHSB) was buying a 2.5% stake in VTSB for RM1.20m from 14 vendors and 23% of the enlarged VTSB for RM10.80mil. Upon completion of the proposed transactions, VTSB will become a 25% associate company of RHSB and indirect 25% associate company of Revenue.

VTSB operates a digitalized insurance platform and also provides management and consultancy services over the Internet and insurance technology (insurtech). The proposed transactions would enable it to take a stake in VTSB and enable it to further expand and develop a more robust business-to-business-to-consumer (B2B2C) environment.

This will be via the provision of innovative products and services to Revenue’s customers, such as on-demand insurance, catering to the special needs of individual and businesses, which will then further complement Revenue’s core business, i.e. electronic transaction processing.

The total consideration of RM12mil was after taking into account of the audited loss after taxation (LAT) of VTSB for the 12 months period for the financial year ended May 31, 2020 of RM206,134; and the unaudited LAT for the 10 months period until March 31, 2021 of RM237,881.

It also included the vendors guarantee of two years combined projected earnings before interest and taxation of RM3.70mil for financial year ending May 31, 2022 and FY23 and the future prospects of VTSB in the enlarged Revenue.

Lifepal - Indonesia InsureTech

Jakarta-based Lifepal offers to simplify the process for Indonesians with a marketplace that lets users compare policies from more than 50 providers, get help from licensed agents and file claims. Liepal claims it is the country’s largest direct-to-consumer insurance marketplace, announced today it has raised a $9 million Series A. The round was led by ProBatus Capital, a venture firm backed by Prudential Financial, with participation from Cathay Innovation and returning investors Insignia Venture Partners, ATM Capital and Hustle Fund.

Lifepal was founded in 2019. The new funding brings its total raised to $12 million. The marketplace’s partners currently offer about 300 policies for life, health, automotive, property and travel coverage. Indonesia’s insurance penetration rate is about 3%, but the market is growing along with the country’s gross domestic product thanks to a larger middle-class.

Market Player - Other venture-backed insurtech startups tapping into this demand include Fuse, Pasarpolis and Qoala. Both Qoala and PasarPolis focus on “micro-policies,” or inexpensive coverage for things like damaged devices. PasarPolis also partners with Gojek to offer health and accident insurance to drivers. Fuse, meanwhile, insurance specialists an online platform to run their businesses.

Lifepal Target Market - Lifepal takes a different approach because it doesn’t sell micro-policies, and its marketplace is for customers to purchase directly from providers, not through agents. Based on Lifepal’s data, about 60% of its health and life insurance customers are buying coverage for the first time. On the other hand, many automotive insurance shoppers had policies before, but their coverage expired and they decided to shop online instead of going to an agent to get a new one.

Lifepal’s target customers overlap with the investment apps that are gaining traction among Indonesia’s growing middle class (like Ajaib, Pluang and Pintu). Many of these apps provide educational content, since their customers are usually millennials investing for the first time, and Lifepal takes a similar approach. Its content side, called lifepal Media, focuses on articles for people who are researching insurance policies and related topics like personal financial planning. The company says its site, including its blog, now has about 4 million monthly visitors, creating a funnel for its marketplace.

While one of Lifepal’s benefits is enabling people to compare policies on their own, many also rely on its customer support line, which is staffed by licensed insurance agents where approximately 90% of its customers use it.

Complicated Product - insurance is complicated and it’s expensive. Most people want to take their time to think and they have a lot of questions that need good customer support. Liepla enables self-research while providing support is similar to the approach taken by PolicyBazaar in India, one of the India's largest insurance aggregators.

To keep its business model scalable, Lifepal uses a recommendation engine that matches potential customers with policies and customer support representatives. It considers data points like budget (based on Lifepal’s research, its customers usually spend about 3% to 5% of their yearly income on insurance), age, gender, family composition and if they have purchased insurance before.

Lifepal’s investment from ProBatus will allow it to work with Assurance IQ, the insurance sales automation platform acquired by Prudential Financial two years ago. Lifepal’s “three-pronged approach” (its educational content, online marketplace and live agents for customer support) has the “potential to change the way the Indonesian consumer buys insurance.

Part of Lifepal’s funding will be used to build products to make it easier to claim policies. Upcoming products include Insurance Wallet, which will include an application process with support on how to claim a policy—for example, what car repair shop or hospital a customer should go to—and escalation if a claim is rejected. Another product, called Easy Claim, will automate the claim process.

Ace Your Interview

No matter how many job interviews you’ve been on, or how well you think on your feet, most people are rarely as prepared as they should be. Here are five obvious things too many people forget to do before the big job interview:

Learn about the company’s story, products and services - People miss this one all the time: They go into an interview without a strong understanding of what the company does.
Just knowing the basics isn’t enough. Learn all you can about the company — its history, leadership team, current successes and challenges. If possible, get the company’s products and services: Buy them, try them and talk to people who use them.

And use your head in the interview. If you’re meeting with PepsiCo and you’re offered a beverage, don’t ask for a Coke. Greater knowledge about the company’s customers will also help you present your skills and experiences in context. You’ll appear more relevant to the hiring manager, and the more relevant you are, the better the connection you’ll make.

Research who you’re going to meet and prepare some icebreakers - When your interview is arranged, get the names and titles of everyone you’ll meet. You can even ask the coordinator if there’s anything they think you should know about those people. The goal isn’t just to research who they are, but to look for connection points, e.g., you both worked at the same company several years ago.

If you can’t find anything in the interviewer’s profile, look for current themes. Maybe the company just announced a new product, or the CEO was recently on CNBC with positive news about the company.

Have meaningful questions to ask - Midway into the interview, the hiring manager asks, “What questions can I answer for you?” Replying with “I’m good, thanks!” shows a lack of preparedness, interest and engagement. Your questions should be smart and strategic, probing the job responsibilities and goals or how the department functions. The questions you ask also show the interviewer how you think. For example:-

i: Why is this position open?
ii: How can I contribute in ways that go beyond the job listing responsibilities?
iii: Can you give examples of people who previously held this role but were a bad fit? And why?

At the end of the interview, don’t ask about “next steps.” If you did well, the hiring manager will let you know soon enough. Instead, tell them how much you love the company, enjoyed the conversation and are interested in the position.

Put your phone on silent - You’d be surprised by how many times I’ve seen this happen. From the hiring manager’s perspective, a phone going off during an interview is a short but lethal sin; it shows carelessness and a lack of respect. Turn your phone off or put it on silent before you reach the front door of the building. Should you forget, and your phone pings a message or rings with an incoming call, never answer it.

Pick the right clothes and do a ‘mirror check’ - Don’t procrastinate on this: Plan your outfit ahead of time. Try it on. Make sure it’s clean, pressed and still fits. Not every job interview requires professional attire, but you still should present yourself as well-groomed and put together. When in doubt, ask people in your network who currently, or used to, work at the company about what’s considered appropriate. Sometimes the person arranging the interview will tell you.

The day of the interview, do a “mirror check” before you leave. Anything stuck in your teeth? Breath fresh? Hair combed? Shoes polished? On the way to the interview, don’t buy or bring anything that could spill on you. Just ask the guy who flew from Chicago to New York the morning of his interview. He ordered tomato juice; there was turbulence.

Aeon Acquired Broker License

Aeon Credit Service (M) Bhd said it has obtained Bank Negara Malaysia (BNM)’s approval to acquire insurance and takaful broking firm Insurepro Sdn Bhd for RM1.7 million. Insurepro’s primary business focus is to provide comprehensive insurance services to strategic and specialized industries in Malaysia.

It said the acquisition, which is expected to be completed in October, will allow the group to distribute both commercial and personal insurance products, including life insurance products by leveraging on the Aeon Group Retail network and Eco system.

Currently, the overall income earned from the insurance is less than 5% of the company’s total income. The newly acquired subsidiary will be transformed into a digital insurtech company, with its main strategy being the direct-to-consumer approach.

With the new Insurtech availability in the market, the group said Insurepro can offer vast insurance and protection schemes to consumers via online tools with more pricing and product options as an advantage of being a broker.