eFishery In Deep Water

Homegrown aquaculture unicorn eFishery has laid off an undisclosed portion of its workforce and announced a shift in focus as a possible result of a lack of domestic demand for fisheries products. Nailul Huda, director for digital economy at the Centre of Economic and Law Studies said that the company might have found that the local market lacked sufficient appetite for its products. The firm was also facing tight funding.

The company did not disclose the number of people impacted by the layoffs, claiming that it was still in the process of calculating the figure. It vowed to assist the laid off employees, including by helping them find new jobs.

Local Demand - It seems the local market is not absorbing as much as the company expected. Company will not sell domestically but to countries like China, Thailand and others, as they also need food sub-bases from Indonesia.

The firm said the move was part of a shift in strategy that also included plans to pursue growth through overseas markets. The unicorn pledged to focus on developing both upstream and downstream parts of its business this year, including product penetration and digitalization.

Operation In India - In October 2023, eFishery established a new office in Kakinanda, India, a city that accounts for some 85% of the country’s fish production. eFishery might shift focus to foreign markets, partly because of the lack of local players in Indonesia. The fishery market is large and unorganized in Indonesia.

In May of last year, eFishery officially earned the title of unicorn, a term for start-ups with a valuation of US$1bil or more. It was the first start-up in the global aquaculture industry to cross that threshold. At the time, it had valuation of some US$1.3bil. It raised another US$200mil in a Series D funding round the following July.

After the funding round, eFishery said it aimed to target over one million aquaculture ponds in Indonesia by 2025 and to export fully traceable antibiotic-free shrimp products overseas.

Founded in 2013, eFishery seeks to provide a marketplace for fish and shrimp feed and financing for producers. The company also serves as a platform for business-to-business sales of fresh fish and shrimp products.

Prudential Malaysia Equity Dilemma

Prudential Corp Holdings Ltd and The Prudential Assurance Company Ltd to wholly own the insurance operation in Malaysia (Prudential Assurance Malaysia Bhd (PAMB) have failed to set aside earlier decisions by the High Court and Court of Appeal. The Federal Court on Tuesday ruled that Detik Ria Sdn Bhd had no obligation to sell its 49% stake in Sri Han Suria Sdn Bhd, which owns PAMB.

In addition to retaining its equity interests Detik Ria is expected to receive all benefits from the 49% stake including dividends, if any, and the dispute may be resolved further in the High Court, the apex court ruled.

RM2.7 Billion Dividends - Detik Ria had submitted in court that the dividends paid in the period under review amounted to RM2.72 billion, and hence Detik Ria should be given 49% of that sum or RM1.3 billion. The exact sum is being disputed.

Sri Han Suria is 50.99% owned by Prudential Corp and 49% by Detik Ria, while the remaining 0.01% is held by PCA IP Services Ltd. A check on Companies Commission of Malaysia shows that Detik Ria is jointly owned by 10 entities, each holding a 10% stake. They are: Berjaya Capital Bhd (a 100%-owned unit of Berjaya Corp Bhd (KL:BJCORP) as at Oct 2, 2023), Ekuiti Spektrum Sdn Bhd, Seahouse Capital Sdn Bhd, Antara Merdeka Sdn Bhd, Pentas Sentral Sdn Bhd, Arah Juara Sdn Bhd, Cangkat Selasih Sdn Bhd, Persada Majestik Sdn Bhd, Serata Setia Sdn Bhd, and Gabungan Majestik Sdn Bhd.

Court Decision 2020 - When the matter first entered court in 2019, Detik Ria was at the time equally owned by Tan Sri Abdul Rahim Din and Tunku Datuk Seri Shahabuddin Tunku Besar Burhanuddin. The High Court in its decision in 2020, upheld by the Court of Appeal in 2022, ruled that there was nothing wrong in the enforcement of two put and call options agreements entered into by Prudential Assurance and Detik Ria, which would have allowed the disputed 49% stake to be passed to Prudential Corp.

However, the Federal Court, in a unanimous decision, ruled that section 67 of the now-repealed Insurance Act 1996 was breached, when two put and call agreements entered into by the companies in 2002 and 2009 were carried out without the finance minister's approval.

Bank Negara Malaysia Approval - The court below erred in its decision that recognised the agreements despite such agreements being carried out without the minister's approval under Section 67 of the Insurance Act 1996. It erred in relying on the approval from Bank Negara Malaysia (BNM).

Prudential Corp and Prudential Assurance are required to return any benefits receiveds under the two agreements, which includes the dividends paid out from Sri Han Suria. Detik Ria was directed to return a sum in excess of RM109.205 million, being the part payments for its 49% stake in Sri Han Suria, with 5% interest running from September 2019.

Prudential Corp and Prudential Assurance was directed to pay costs of RM200,000.

Minister’s Approval - Section 67 of the Insurance Act requires acquisitions or disposals of shares in a licensee company above 5% to obtain the approval of the finance minister. The approval of the minister was not obtained in 2018 for the acquisition. Approval from the minister has to be gained before the disposal of the stake. Here, it is agreed that only BNM gave approval to complete the acquisition of the options shares in June 2019 and not the minister.

This resulted in the agreement to be void, and hence Detik Ria was right to rescind it. The company had subsequently filed a counterclaim when the two Prudential companies filed the suit.

They said that their clients had made the application to BNM to complete the acquisition of Detik Ria’s 49% stake in Sri Han Suria in 2018 in accordance with the Financial Services Act 2013, and had accordingly obtained the approval from the central bank in June 2019.

It was only in 2018 that BNM with the approval of the Ministry of Finance had agreed to put forward the two options to fulfil the divestment requirements, namely either a disposal of shares in excess of 70% to domestic investors directly or via an initial public offering, or by cash contribution to a special insurance development trust fund. 

Allianz Offer To Acquire Income Insurance

Many Singaporean expressed concerns that Income Insurance will stop prioritizing the needs of Singapore workers are warranted because the goals of German insurer Allianz may not fully align with the original mission of the Singaporean company.

Mr Tan Suee Chieh, former CEO of NTUC Income Co-operative, also weighed in, calling it a "breach of good faith" given that the assurance from NTUC Enterprise to remain as majority shareholder was used to alleviate concerns about the corporatization in 2022.

The sentiments are of course valid as many Singaporean still want a social enterprise to offer (life insurance, general insurance) products. Singaporean think of Income Insurance as a co-operative of NTUC rather than a corporate entity. They fear that it will no longer prioritize the needs of Singapore workers, especially those who are middle- to low-income.

Those concerns are justified since Allianz is a large multinational corporation. Over time, the new entity’s focus might shift from social good to profit maximization. But on the flip side, the proposed acquisition could also help Income Insurance stay competitive and expand coverage.

Advantages & Benefits - Contrary to public concerns about higher premiums and reduced access to policies, Allianz is likely to preserve Income’s value proposition of providing accessible, comprehensive, and affordable insurance solutions to maintain its prominent position in Singapore.

Last week, Allianz announced that it would offer S$40.58 per share for 51 per cent of shares in Income Insurance. The total transaction value would be S$2.2 billion. The deal is pending regulatory approval.

Tahoe Life Update

The Insurance Authority has appointed PwC as Tahoe Life advisers on management of assets and properties, investment strategy and declaration of benefits to policyholders.

This is the first time the IA has appointed a consultant for an insurance company. The appointment of advisers is a further step taken to augment the internal controls and corporate governance of Tahoe Life for better safeguarding of policy holders, adding that it will "not affect daily operations of the company or impact on the terms and conditions of in-force policies.

Tahoe Life was acquired by Tahoe Investment for HK$10.6 billion in 2017 and failed to be sold at US$1 billion (HK$7.8 billion) in 2020 amid financial difficulties of its parent. It was prohibited by the IA from operating new business in 2021 and Dah Sing Banking also suspended its distribution agreement with it last year.

Nongfu Water Disruption Against Competition

China’s richest man is at risk of losing the pole position he’s held for almost three years, with his wealth slipping the most among billionaires worldwide as intensifying competition and public relations challenges plague his bottled water giant.

Zhong Shanshan, chairman of Hangzhou-based Nongfu Spring Co, has lost US$13 billion so far in 2024 with a fortune of US$54.8 billion. That keeps him a whisker above Colin Huang, founder of online shopping platform PDD Holdings Inc. Huang’s fortune stands at US$47.3 billion.

Changing Market - The potential changing of the guard reflects a consumer sector that’s increasingly complex for businesses to navigate, as the economy slows and competition from upstart brands intensifies.

Besieged by a price war in its core bottled water space, Hong-Kong listed Nongfu has also found itself on the wrong side of growingly nationalistic and health-conscious Chinese in recent months. This has led to an almost 20% plunge in its share price since Feb 1, compared to a roughly 6% rise for PDD, with its dirt-cheap products and aggressive deals.

Recent issues with Hong Kong’s consumer watchdog regarding product quality, heightened competition in the sector amid decreased consumer spending, and a boycott earlier this year due to concerns over business practices are likely to have contributed to these apprehension.

Most of Zhong’s fortune is derived from stakes in the beverage company and pharmaceutical business Beijing Wantai Biological Pharmacy Enterprise Co.

Roller coaster - Earlier this year, the company — and Zhong himself — were barraged by criticism after the February death of Zong Qinghou, founder of key rival Hangzhou Wahaha Group Co.

Online sympathy after his passing morphed into a takedown of Nongfu, with some comments deriding its bottled water packaging as looking Japanese in design, and others recapping what they alleged were tricks Nongfu had used to gain an advantage over Wahaha.

Users alleged that Zhong’s son holds a US passport and questioned the family’s allegiance to China. In a blow to Nongfu, Wahaha sales spiked. While Nongfu refuted some of the claims and said it had taken legal action against people who instigated malicious rumours, many Chinese internet users remained unmoved.

In April, China Resources Beverage Holdings filed for a Hong Kong listing, a move set to provide additional resources for its bottled water brand C’estbon — one of Nongfu’s major competitors.

Soon after, Nongfu introduced a new purified water in direct competition with C’estbon, pushing prices to the floor. The product is being sold at less than 1 yuan per 550-millileter bottle on Alibaba Group Holding Ltd’s Tmall, less than half its normal retail price.

Even as Nongfu reported stronger than expected earnings last year thanks to robust sales of its ready-to-drink teas, the proportion of revenue from packaged drinking water dropped to 47.5% — from 54.9% in 2022 — underscoring the rise in competition in the bottled water sector.

Latest Headwind - Hong Kong’s Consumer Council last week said Nongfu’s water had been found to contain the maximum limit of bromate, which could pose health risks when overconsumed.

Shares plunged by 7.3% in two trading days before the council clarified that its early findings had come as a result of evaluating Nongfu’s water against criteria used for a category to which it doesn’t belong. Shares bounced back after the watchdog apologised, but wiped out gains again on Friday.

To shore up confidence, Nongfu announced earlier this month that Zhong intended to buy up to HK$2 billion (US$256 million) of the company’s shares via Yangshengtang Co, a holding company he controls. On July 9, Yangshengtang bought about 3.5 million shares.

Global Tech Outage & Insurance Claims

Insurers could face a raft of business interruption claims after a worldwide tech outage crippled industries from travel to finance on Friday. A software update by global cybersecurity firm CrowdStrike appeared to have triggered systems problems that grounded flights, forced some broadcasters off air and left customers without access to services such as healthcare or banking.

Insurers are bracing for hundreds, if not thousands, of claim notifications from organizations that are impacted by the CrowdStrike event. However, not all businesses would get insurance cover for their lost time and money. A typical business interruption policy within a regular commercial insurance program would not provide coverage against losses stemming from Friday's outage. And not every cyber insurance policy likely has coverage for business interruption; such coverage would have to be bought separately at extra cost.

Some cyber insurance policies exclude non-malicious events, and there are waiting periods and deductibles that businesses will have to consider before making a claim with their insurance carriers. Economic damages could reach tens of billions of dollars in such events, and added the outage should be considered an example of an "event that can produce what could be defined as an insurance catastrophe.

The event could also bring with it legal claims for CrowdStrike and Microsoft. A defective update by CrowdStrike, designed to protect Microsoft Windows systems, triggered the global IT outage.

Airlines (and other industries) might have rights under their contracts that allow them financial or other remuneration based on the CrowdStrike outage. The outage caused major issues for travelers around the world – grounding planes for hours.

Travel insurer anticipates an increase in travel insurance claims, with the most from travel delay and missed connection policies. More than 1,600 customers may be impacted as they depart for or return from trips on Friday. 

Industry experts also said that force majeure would not apply for the event.Force majeure clauses in contracts remove liability for unforeseeable and unavoidable catastrophes that prevent participants from fulfilling obligations.This is exactly what cyber insurance is meant to cover. ... This is not something that is outside of our control. 

Mandatory Motor Insurance

Indonesian government is preparing to require vehicle owners to participate in a mandatory insurance scheme, which many see as part of a larger effort to enlarge the country’s insurance industry. The scheme, called third-party liability (TPL), will provide coverage of vehicle damage caused by accidents.

As of now, the government is preparing the implementing regulations that must be done no more than two years after the law was passed in 2022. It is estimated the mandatory insurance premium could cost Rp 250,000 (US$15.5) per year. The limit [for the coverage] could be around Rp 50 million. The Indonesian General Insurance Association (AAUI) has stated that the premium would not be burdensome for car owners, arguing that those who own a four-wheeler have more than enough purchasing power to afford it.

The plan was stipulated in the 2022 law on financial sector development and strengthening (PPSK). The regulation is expected to apply to both two-wheelers and four-wheelers, but there is not yet clarity on whether the former will have different premium pricing.

Extension - The law also includes other mandatory TPL insurance that could apply to home fires and natural disasters. Similar stipulation is also available for mandating that workers participate in a pension fund.

The OJK defended the policy on Thursday, saying that it would greatly help lighten the financial burden of Indonesians involved in accidents, according to a statement on Thursday.

April International has partnered with Lifepal, an insurtech broker in Indonesia. The collaboration aims to broaden the distribution of APRIL’s International Private Medical Insurance (IPMI) solutions tailored for individuals and families.

Under this partnership, Lifepal will manage the distribution of APRIL International's IPMI products, which operate on a community-rated basis. This ensures that claims made throughout the year do not lead to targeted premium increases for individual clients upon renewal, emphasising affordability and stability.

Clients in Indonesia can choose from two coverage options: ASEAN region (excluding Singapore) or Worldwide excluding the USA. All plans feature comprehensive coverage, including provisions for emergency evacuation, repatriation, and treatment for critical illnesses like cancer and heart disease.

Poor Leadership

Key poor leadership can affect their teams and organizations. These everyday slip-ups are important to watch out for. If we focus on these areas, leaders can steer their teams and organizations in the right direction for success. Plus, it's a great way for those aiming to take the lead to pick up the skills needed to navigate today's challenging business landscape.

1. Lack of strategic vision and planning
Many leader dives into their roles without a clear game plan. They may have set unclear goals, mismanage resources or focus too much on immediate gains rather than long-term success. Having a strategic vision is crucial, but it often gets overlooked. Planning ahead and setting clear, achievable goals can steer the ship in the right direction.

2. Treating people like numbers
In top-down power structures, employees are considered to be objects or expenses rather than assets; there is little concern for their happiness or well-being since the motive for hiring them was purely productivity and profit. In these pressure cookers, there's little evidence of leaders displaying compassion and empathy and seeing employees as valued human beings. As a result, you'll encounter high levels of stress, turnover, absenteeism, and burnout.

3. Stifling innovation
In a world that's constantly changing, sticking to the same old ways can hold a company back. Leaders who resist new ideas and don't encourage creativity can stifle progress. Embracing innovation and being open to fresh approaches can help the organization stay ahead of the curve and adapt to new opportunities.

4. Inadequate talent management
Great teams are built by leaders who know how to attract, retain, and develop talent. Poor leaders often face high turnover rates, underperforming teams, and a lack of future leaders within the organization. Effective talent management is about creating a strong, resilient team that can take the business to new heights.

5. Too much ego
Many people exhibiting "hubristic pride" were found to be narcissistic, reflecting feelings of arrogance, grandiosity, and superiority. They also experienced more interpersonal conflicts and, ironically enough, were prone to shame. Truth is, these people hurt businesses in many ways. In my own observations as an executive coach, I have seen these outcomes in leaders exhibiting hubristic pride:

- Taking credit for other people's work, thereby distancing themselves from others.
- Exaggerating stories and accomplishments because the simple truth doesn't get enough of      a reaction.
- Feeling entitled to star treatment because of their position or title.
- Lacking accountability and failing to exercise active and respectful listening.

6. Resistance to learning and adaptation
The business landscape is always evolving, and leaders need to keep up. Those who resist learning new things or adapting to changes can quickly become outdated. Embracing continuous learning and being open to feedback can help leaders stay relevant and lead their teams effectively.

7. Ethical lapses
Leaders who engage in unethical behavior can cause serious harm to their organization. When questionable decisions for financial gain or personal benefit are made, employees are aware. If they know, you've already lost the battle for respect. But if you lead by example and show integrity in your decision making, it says a lot about you as a leader.

8. Inability to address mental health issues
Leaders need to be attuned to their team's well-being. Ignoring mental health concerns, failing to manage conflicts, or not fostering an inclusive work environment can negatively impact the team. Addressing human-centric issues is essential for creating a positive and productive workplace, especially in high-pressure environments.

PESOS Training Module

PESOS is particularly suited to clients who have a strong need for hands-on experience when learning, or who might be more analytical by nature and like to have something empirical to hang on to, rather than a more illustrative or imaginative approach.

PREPARE: The coach needs to prepare by identifying the client’s need, and gaining an understanding of what behavioural changes might be required to address this need; also preparation of any materials that might be necessary or useful to gain the desired outcomes.

EXPLAIN: The coach will now explain to the client that they are now going to demonstrate (SHOW) certain behaviours or behavioural patterns. The objective is to give the client a clear understanding of the issues and behaviours that are being addressed before they see the demonstration.

SHOW: The coach now demonstrates the skill or behaviour required, as previously explained.

OBSERVE: The client attempts to replicate the demonstration they have observed, while the coach makes notes to be used in feedback.

SUPERVISE & SUPPORT: The coach provides feedback on how the client’s performance compares to the explanation and demonstration. At this stage it is as much about building the client’s confidence in their ability – or eventual ability – to employ these behaviours as it is about the actual replication of the behaviours. If it is appropriate, then at this stage it is possible to provide ideas for future development.

This model might be particularly useful in a situation such as when working with a person of a highly analytical nature who exhibits poor interpersonal communication skills, but perhaps lacks the ability to see the effects that this behaviour pattern might have on others.

Improving Insurance Penetration - Indonesia

Indonesia insurance industry is experiencing growth, but the growth of premiums in the conventional insurance sector over the past five years has been relatively modest, averaging only 1.89% per year. As for Sharia insurance contributions, despite its market share remains relatively small compared to conventional insurance premiums.

Low Penetration - Comparing to gross domestic product (GDP), insurance penetration in Indonesia is relatively low amongst ASEAN countries at 1.4%. To illustrate, Singapore;s penetration rate is 12.5%, whilst Malaysia’s and Thailand’s are at 3.8% and 4.6%, respectively.

The biggest barrier to insurance penetration in Indonesia is the geographic landscape. Indonesia is an archipelago with diverse demographics across its many islands, making it cost-inefficient to open branches in different cities.

The non-life or general insurance sector, had a slightly different view. In non-life insurance, asset accumulation is crucial; people would not buy insurance if they have nothing to insure.

Globally, most non-life insurance markets set a high average GDP per capita, around $5,000-$6,000, but Indonesia has not reached that level yet, so there is no expectation on a drastic increase in non-life insurance.

Others  highlighted the low levels of financial literacy and inclusion in Indonesia as a significant reason for the low insurance penetration. Indonesian tends to align Sharia finance in terms of banking, not insurance, and there are still debates among religious scholars about insurance, adding to the challenges to introduce Sharia insurance’s product.

Increase Penetration - It is widely believed that adopting technology will improve the rate of penetration in the insurance sector. Many insurers now start with direct digital channels.

AI can assist in assessments and claims, as practiced by some insurer. But decisions should be made by people. AI can help, but human interaction remains crucial for customers.

Distribution channel depends on the targeted product segment. Online channels are suitable for easy, standardized products, but more complex products need explanation.

Vietnam Backsplash Against Unit-Linked Policy

Vietnam - Sales of newly issued investment-linked insurance policies have plummeted considerably, reflecting broader challenges in the sector and highlighting the need for increased transparency in insurance products.

Plunging Sales - Data revealed last week from the Insurance Supervisory Authority under the Ministry of Finance (MoF), sales of newly issued investment-linked insurance policies have plunged over 40 per cent, significantly impacting the insurance sector’s performance in the first four months of the year.

The total revenue from new insurance premiums in the life insurance market fell nearly 32 per cent on-year to approximately $291.6 million. Bao Viet Life Insurance led the market in new premium revenue with nearly 18 per cent market share, followed by Dai-ichi (15 per cent), Prudential (15 per cent), and Manulife (10 per cent).

Investment-linked insurance - continues to hold the largest share, contributing nearly 70 per cent of new premium revenue in the life insurance sector. However, sales of this product category fell sharply by 42 per cent on-year to around $200 million. In terms of the number of contracts, this product accounted for more than half of the new contracts sold in the past four months.

Investment-linked insurance had previously experienced rapid growth due to the profitable investment effect in a low-interest-rate environment, coupled with the expansion of bank distribution channels. However, last year’s major industry crisis has made this product increasingly difficult to sell.

Good Product Poor Selling Practices - Essentially, this product offers optimal cash flow for insurance participants. However, widespread, non-transparent selling practices and ignoring customers’ risk appetites have turned this once-premium product into a less attractive option for consumers.

With investment-linked insurance becoming less accessible, companies are shifting their focus to traditional products such as mixed insurance and term insurance. In the first four months of the year, new sales of mixed insurance surged 255 per cent to approximately $23.52 million, and term insurance increased by over 65 per cent to around $18.6 million.

In the same period, agents were paid $19.6 million in commissions, an 8 per cent increase on-year. Of this, commissions for original insurance brokerage reached $15.76 million and for reinsurance brokerage $3.84 million.

Two Products - There are two popular products: universal life insurance and unit-linked insurance. Universal life insurance provides policyholders with returns based on the actual annual investment interest of the fund, but guarantees a minimum interest rate corresponding to the minimum account value. Conversely, unit-linked insurance allows customers to choose an investment fund that aligns with their profit expectations and risk tolerance.

This package does not offer a guaranteed interest rate. Customers fully benefit from and bear all risks associated with the investment. Many unit-linked investment funds have achieved average returns of 8-14 per cent per annum over the past decade, comparable to open-end funds.

Banks Should Not Sell Insurance - At a National Assembly discussion last month, Pham Van Hoa, a deputy from the Mekong Delta province of Dong Thap, expressed support for the stance that banks should not be allowed to engage in the sale of insurance.

The high commission rates for life insurance agents are the primary reason for the widespread practice of forcing loan customers to purchase life insurance at many commercial banks,” Hoa said. “However, when customers seek to claim their benefits, they face significant obstacles from the insurers. Obtaining insurance payouts has become an arduous task for many, with some individuals even forfeiting their benefits due to the exhausting process.”

Several regulations have been introduced to prevent the coercion of insurance purchases through banks and to ensure accurate product advice. For instance, banks acting as insurance agents must clearly inform customers that insurance products are not part of the bank’s financial offerings.

Banks are banned from advising or selling investment-linked insurance products within 60 days before or after loan disbursement. This is designed to prevent bank employees from using approval authority to pressure borrowers into purchasing insurance.

Expensive to Insure EV

Marine Safety Insurance (Thailand) said that it has halted its current insurance premiums for new EV customers, including those who own transferred cars, and would now consider new premium rates on a case-by-case basis. The changes in its electric vehicle (EV) insurance policy came into effect on July 1.

The auto insurance provider said it would continue to provide insurance for EVs, but said the move to revise its rates was influenced by the fluctuating market prices of new and used EVs, which it said impacts the insurance value. The company added that existing customers who want to renew policies would continue to receive standard coverage, but it would now base renewal premium rates on claim records.

Expensive Repairs - Wide fluctuations in EV prices and high claim values have reportedly led insurers to rethink how to offer coverage. General Insurance Association recently cautioned its members about EVs. It noted that spare parts in some cases were 50-60% more expensive than for combustion-engine cars, and many damage claims were for 90-100% of a car’s value. Experience in many countries has shown that even minor collision damage to an EV’s battery pack can result in the entire unit needing to be replaced. The battery pack typically accounts for about half the cost of an electric vehicle.

Two insurers had reportedly decided to discontinue offering policies for EVs. TAIA planned to meet with global EV makers, who are also association members, as well as the Thai General Insurance Association (TGIA) to look into the issue. TGIA is asking its members to present their methods for calculating EV insurance premiums.

Cancellation Of Policies - the Office of the Insurance Commission (OIC) said no insurers have officially announced the cancellation of their EV insurance services. The regulator said that a total of 23 insurance companies still provide EV insurance in the country.

Price War - among manufacturers, mostly Chinese ones, is further complicating the issue for car owners as well as insurers, the report adds. For example, an insurer that assesses the replacement value of a car at, say, one million baht and prices the premium accordingly might find the same model being priced new at 750,000 baht a few months later, and so would have to acknowledge the higher sum if the vehicle was in a serious accident.

BNM Recommends Cost-sharing Medical Claim

Bank Negara Malaysia (BNM) and insurers are working on new insurance plans with cost-sharing provisions amid rising healthcare costs that will inflate claims and lead to higher premiums for consumers.

Medical claims payout increased 26% in 2023 following a 34% surge a year earlier, according to the Life Insurance Association of Malaysia (LIAM) that represents 16 foreign and local life insurers. The higher medical claims are expected to add pressure on premium increases in the future.

Alternatives Suggested - Policyholders are provided options to manage the cost of their insurance premiums,” LIAM president Raymond Lew wrote in the association’s latest annual report. “These include lowering their premium by converting it to a cost-sharing plan and reviewing or altering their policy benefits to suit their situation.

Repricing of premiums is a standard feature of medical reimbursement coverage but insurance policies become unsustainable when the premiums collected are insufficient to cover the expected claims expenses.

Policyholders have sought or resumed medical consultations as Malaysia recovers from the Covid-19 pandemic, leading to a sharp rise in medical claims in 2022 and 2023.
Medical claims are surging

Claims Data - from 2018 shows that hospital supplies and services accounted for 60%-70% of claimable surgical and non-surgical treatment costs in Malaysia. The costs are not regulated and are increasing faster than other hospitalisation costs. The total claims payout in 2023 climbed 14.9% to RM15.4 billion in 2023 from RM13.4 billion in 2022, driven by an increase of 41.4% in disability payment and 26.2% in medical claims. 

New business total premium, meanwhile, rose 11.6% to RM13.4 billion in 2023 from RM12 billion in 2022, thanks to strong growth in group policies and investment-linked policies.

That includes understanding the necessity of every medical procedure, option for daycare instead of admission to hospital, request for itemized billings, and opting for co-payment to promote responsible usage of medical and health insurance and to reduce pressure on premium increases, it said.

Policyholders, meanwhile, are urged to educate themselves on their medical policies, explore alternative treatments, question unreasonable billing, and consider optimal medical treatments.