Center Of Influence

The general perception of life insurance agents – based on surveys – is that the opportunities for life insurance agents are diminishing. In many respects, this is indeed accurate. However, for those experienced and technically proficient life insurance agents, there are significant new business opportunities that a large percentage of them are failing to capitalize upon.

The majority of larger cases, where life insurance is used to pay estate taxes, these clients often come from centers of influence. The possibility of providing life insurance for a billionaire, for example, will usually occur because an accountant or attorney or some other professional brings in the life insurance agent. This dynamic offers life insurance agents two ways to generate substantially more revenues with ultra-wealthy clients including single-family offices.

One way is by building stronger and more profitable relationships with centers of influence. By and large, the approach most high-end life insurance agents take is not systematic or strategic. Running around from one professional to another with the “latest and greatest” use of life insurance, while common, is mostly ineffectual. Instead, a very targeted process such as street-smart networking can readily result in life insurance agents being sent a steady stream of high-net-worth clients from other professionals.

Creating solid strategic partnerships with centers of influence will certainly result in connecting with more very affluent clients who need their services. This can potentially translate into increased annual revenues of 70% or more. However, to do meaningfully better requires proactively working with these centers of influence to mine their clientele

Most of the time, the center of influence will run onto a situation – commonly prompted by their ultra-wealthy clients – where life insurance is needed. At these times, they will consider bringing in a talented life insurance agent. For the benefit of everyone involved, by methodically evaluating the high-net-worth clients of a center of influence, almost universally, a sizable number of new and significantly large life insurance needs are uncovered. There are a number of ways to do this, and the using the Whole Client Model is one of those ways.

Recognizing that – while there are vastly different calibers of life insurances agents – life insurance is a commodity. Moreover, there are no truly proprietary strategies, especially in an industry that is known for joint-case work. Consequently, the ability to do a considerable amount of new business is a function of skillful business development. Processes like street-smart networking and the Whole Client Model can be instrumental in enabling life insurance agents to increase their revenues by 70% or more – often much more.

Unit Trust Investment Cheats

Investors who handed over their money to a personal financial consultant from a bank for unit trust investments worth more than RM720,000 were shocked to find out years later that the consultant had absconded with their money.

Raphael Fred, 43, allegedly never even deposited the monies with the bank, and is now missing when his clients wanted to withdraw some dividends upon the maturity of some funds.

Some of his clients started handing over money to him since 2009, as he allegedly helped them open up accounts for the investment.

The bank the suspect worked for also lodged five reports against him for similar offences, ACP Chandra said, adding that the nine victims include contractors, businessmen and housewives.
However, after checking with the bank, they were told that the bank never received any money for any said unit trusts.

Takaful Insurance

CIMB Equities Research has initiated coverage of Syarikat Takaful Malaysia (STM) with a target price of RM4.39  and an Add recommendation. It said on Thursday STM is for investors looking for pure and direct exposure to the fast-growing takaful industry. STM is also one of the biggest players in this segment, competing with Maybank-owned Etiqa.
  

“Potential re-rating catalysts are (1) a strong three-year EPS compounded annual growth rate (CAGR) of 15.6% for FY14-17, (2) a positive industry outlook, and (3) high returns on equity  (ROE) of 20%+,” it said.  

 

STM is the only listed pure takaful operator on Bursa Malaysia. The company can be considered a composite insurer, as it is operating both family takaful (akin to life insurance) and general takaful (non-life insurance) businesses, from which it generated total contributions (premiums) of RM1.4bil in FY14. It also has a small takaful unit in Indonesia.    

 

“We believe the outlook is positive for the takaful industry due to the switch from conventional insurance to takaful products among the Muslim community and an increase take-up rate for family takaful products.

 

“In 2015, we are projecting contribution (premiums) growth of 10%-11% for the general takaful sector and 11%-14% for the family takaful sector,” it said.

 

CIMB Research forecast a three-year CAGR of 15.6% for STM’s net profit in FY14-17. This is expected to be underpinned by an 11.5% CAGR in gross earned contributions, with a CAGR of 12% for the family takaful business and 10.3% for the general takaful business.

 

For the general takaful business, it anticipated an improvement in the gross claims ratio from 72.6% in FY14 to 65% in FY15-16 and 64% in FY17. 

 

“We think that STM should trade at a premium valuation compared to its peers in Malaysia due to its (1) proposition as the only pure direct exposure to the takaful sector, (2) position as a composite insurer, (3) our projection of swift EPS growth, and (3) superior ROE of 24%-27%,” it said.

Aging In Malaysia

Malaysia’s racing against time to become a developed nation but with a growing population of singles, couples having fewer kids and people living longer, there’s a high chance we’ll be an aged country before then. And, we are far from ready to grow old. Malaysia is fast becoming an aged nation. And it isn’t ready. In 2006, we hit the ageing status and by 2030, we’ll be aged. Lack of care centres for the aged, infrastructure and money are why we’re struggling.

“Making policies and implementing them takes time. And, you can’t save money overnight,” he warns, stressing that not enough retirement savings and low financial literacy are big challenges.
Sixty-eight percent of members aged 54 have savings lower than RM50,000 which can only last five years assuming they spend RM820 per month. The full EPF withdrawal age is 55 but the average life expectancy is 75.

Malaysians must face facts. We’re living longer so we must work longer, he says.

“The new poverty line income is RM930. So, how long do you think RM50,000 will last now with rising healthcare costs?” he asks, adding that the price of surgery spiked by about 14% from 2006 to 2013.

He cautioned against withdrawing the EPF early for expenses that don’t build assets. In the old days, investing in your child’s education brings returns. Nowadays, it’s not a sure thing that they will take care of you, he says, matter of fact.

“Withdrawing money for investment is also risky because one in 10 new businesses fail.” He believes that financial literacy is the key to facing the challenges of an aged nation. That’s why the EPF launched our Retirement Advisory Service last year.

“We also need a holistic social security master plan. The critical illness insurance penetration is too low here. There must be better coverage for those in the informal sectors.
“We need to get moving now.”

He says the lack of retirement products for those in the active ageing (55-70), passive ageing (65-80) and frail (over 80) categories are a major challenge. The lack of specialised services, care givers and geriatric doctors are challenges needing attention. Also urgent are a legal framework, standard operating procedures and enforcement to manage abuse cases and prevent centres from becoming a dumping ground for abandoned seniors, and aged-friendly infrastructure.

YALO for Life

You Only Live Once. #YOLO. Life only comes once, be it funny, exciting, mysterious or sad and that is the theme of the largest social video production ­challenge for university ­students. An initiative by Life Insurance Association of Malaysia (LIAM), the first Malaysian Youth Video Awards is to raise awareness of financial protection among youths in Malaysia.

This message consistently comes to mind when the younger Malaysians drive recklessly or during an employment interview. The youth seem to feel they can live forever.

In September, the top 10 production team would release videos for the public to view.
For more information, log on to www.youthvideoawards.com.

On-line Life Insurance Malaysia

U for Life Sdn Bhd, which introduced online life insurance premiums for as low as RM9.85 a month, sees potential in what it thinks is an under insured market in Malaysia, with a goal of developing more insurance products in the future.

U for Life is 60%-owned by the world's third-largest reinsurance company Hannover Re and 40% by New Zealand-based Intelligent Life Ltd. Intelligent Life specialises in designing and deploying distribution systems for the life insurance industry featuring electronic underwriting and straight-through-processing. Using this platform, a fully underwritten life insurance policy can be quoted, underwritten, paid for and issued online in 10 minutes.

Policies offered by U for Life is underwritten by Tokio Marine Life Insurance Malaysia Bhd, a member of the Tokio Marine Holdings, Inc in Japan.

He said there is a clear protection gap in Malaysia where the average protection is RM500,000 to RM700,000 and the average sum insured is RM34,000. "We want to increase the number of Malaysians who have life insurance from 56-75% to support what the government wants to do (by 2020) and that's the key element of the (U for Life) stakeholders."

He said the concept of U for Life is to make the product as affordable as possible by keeping it to its necessity, which is the protection element. "Sometimes a life insurance product comes with different elements like investment and protection so when you have all these components coming together, the price becomes higher. If we strip it down to just protection, it becomes more affordable."

U for Life was first introduced in May and the company is still looking at the initial results. It will also look into customers' feedback to determine how things will pan out, such as products that customers require and the suitability of the online platform.

 "There's also definitely a possibility for us to expand into other insurance products," said Iskandar.
U for Life offers life insurance protection of RM100,000 for only RM9.85 per month, banking on simplicity, instant and affordability.

Who Is Tan Hui Linn

Tan Hui Linn, a survivor of an acid attack in Penang some years ago. In Tan, we are introduced to a 23-year-old lady who has risen from a heartrending experience to become a gutsy, more confident and happier person; a suitable role model for youths from all races. 

 

In October 2009, Tan Hui Linn's face was badly injured and she was blinded in her right eye after an acid attack on her and her mother at their home. Tan’s father, a Penang Municipal Council licensing officer, was later charged in two different courts with the murder of his wife and causing grievous hurt to his daughter. 

 

After sitting for her SPM exam, Tan received several scholarship offers and she opted to enrol in an accountancy course at Sunway College. Earlier this year, she completed her sixth and final corrective surgery in Seoul.

 

Despite her limited vision, Tan was among those who graduated from the Sunway TES Centre for Accountancy Excellence in April; a moment the gritty lass fervently wished she could share with her mother. Currently, according to The Star on July 21, Tan Hui Linn is enjoying her work as an auditor upon joining an accounting firm in Penang last May.

Malaysia Silent Killers

They are called silent killers – they kill 40 employees a day or render them incapable of working.
This gamut of non-communicable diseases (NCD) cost Socso RM627,401,831 last year in invalidity payments and survivors’ pension. Human Resources Minister Datuk Seri Richard Riot said 8,912 Socso members became invalid and 5,554 died as a result of the silent killers.

“This is a loss to employers and directly leads to a decrease in productivity. Families will be affected as well,” said Riot in a recent interview. He said Malaysia was facing an epidemic of NCD – a high prevalence of obesity, diabetes, hypertension and hypercholesterolaemia among adults, especially those aged above 40 years.

This was also reflected in the claims for invalidity or survivors’ pension made to Socso, where almost 34% and 50% of the claims respectively were due to NCD. Riot said the high prevalence of NCD was part of the reason why Socso introduced the Health Screening Programme (HSP) in 2013, offering members comprehensive health screening vouchers once they turn 40.

However, out of the 2.1 million vouchers distributed since 2013, only 429,633 members have used them up to June 29 this year. Of the 206,000 vouchers distributed this year, only 5.6% or 11,601 were used. Of the 387,028 people who underwent the HSP from January 2013 to Dec 31 last year, 67% had not undergone a comprehensive health screening before.

The HSP found that 39% were overweight, 34% were obese, 27% were hypertensive, 9% have diabetes and a whopping 62% have hypercholesterolemia, that is an abnormally large amount of cholesterol in the blood.

The HSP provides screening for breast and cervical cancer with pap smear and mammogram tests.
The pap smears identified 464 women with abnormal results that needed further investigation. The examination showed highly suspicious findings for 139 of them and cancer in six women.
According to the mammograms, 988 women had suspicious results that needed investigation while 164 showed signs of highly suggestive malignancy.

MLM Kills

A recent incident which was reported in Kajang. Some 20 members of a multi-level marketing (MLM) scheme stormed the house of their recruiter after she disappeared for a week with about RM1mil of their money. Unable to find the recruiter, the group instead decided, and then proceeded to abduct the recruiter’s mother instead.

Kajang OCPD Willey Richard said the recruiter, a 25-year-old woman, had been running a pyramid scheme for about a year and recruited her agents via Facebook. “She ran away with her husband and children. This was not her first time getting threats from her agents.” “Previously, she returned a few hundred thousand ringgit to her agents after they threatened her. Some of them invested the money back into the scheme,” he explained.

Following the abduction, the recruiter’s younger sister lodged a police report regarding the incident and the police found the mother at a bus stop in Bentong, Pahang, all within a day.

The case has been classified as Section 506 of the Penal Code for criminal intimidation and Section 365 of the same code for kidnap or abduction to wrongfully confine people. According to the police, upon recruitment, the agents would invest between RM100 to a few thousand ringgit in the scheme and about 10 agents have lodged police reports against the recruiter. They were lured by promises that they would see high returns on their investment within a month.