ABC Sales Cycle Life Insurance

Building a strong sales process is a proven way to improve your close rate and is perhaps the most important thing you can do as a sales manager. No matter what kind of insurance product you sell, your producers will benefit from having a defined process to follow, starting from when they receive a lead all the way through to closing the sale.

While you may have to experiment to find the best insurance sales workflow for your particular agency, you don’t need to reinvent the wheel. At a high level, most effective sales processes follow certain best practices.

How to get started building an insurance sales process that covers these five key phases:

Prospecting
Preparation
Outreach & Presentation
Address Objections
Close

1. Prospecting - The first step in any sales process is prospecting. The focus of this stage is finding or attracting new prospects who have an interest in the products and services your agency offers. Sales reps use a variety of sources, both online and in-person, to find qualified leads to whom they can reach out and connect. A service like EverQuote can help you and your team excel in the prospecting stage by providing you with high-quality leads who have shown intent to buy. 

2. Preparation - Before you communicate with a lead, consider how you want the interaction to go and prepare for it. This includes planning every step of the process on the way toward the sale, having a script of what you want to say during a phone call, and gathering any sales materials and information you need to either reference or send to the lead.

Being prepared for sales communications increases the chances that they will proceed the way you intend—with a positive outcome. Use templates as much as you can, whether it’s a script for a phone call or for email or text messages. Agencies, especially newer ones, need to practice and refine these materials on a daily or weekly basis to develop a strong sales approach to plug into their insurance workflow process.

3. Outreach & Presentation - Once you’ve sourced qualified prospects and prepared your scripts, it’s time to contact the lead and present your case. For digital leads, we have found that the average sale happens anywhere from one to three weeks after initial contact, so we recommend a 21-day sales cycle that includes 8-10 touches with the client (illustrated below).

It’s very important to contact every lead as soon as possible. When you first receive the lead’s information, call them immediately. If you don’t get them on the phone, call them again within the hour, leaving a voicemail or sending a text message. If you haven’t heard from them by the end of the first day, send an email as well, so they understand why you’re reaching out.

Keep a regular outreach schedule for the first three weeks. If contact has not been made in that time, give the prospect another call right before you hit the 90-day mark. (Twenty percent of closures happen in months two or three.) Often, consumers will be shopping around looking for the best price, and sometimes they may be looking ahead for pricing a few months before intending to buy.

4. Address Objections - Once you get your prospect on the phone, you need to be prepared to address common objections. Having a script or knowing how you will respond makes it easier to continue guiding the conversation forward. Here are ways you can respond to four of the most popular objections in the insurance sales process:
“I’m not free to talk at this moment.”

For a sales person, this should never be considered an objection. Consumers looking for insurance are often busy people, and just because they can’t talk at that moment doesn’t mean they can’t in the future. Ask them for a better time, schedule a call and send them a calendar invite, and follow up before the call. After scheduling the follow-up call, send them personalized information (such as a quote or projected cost savings) by email or text to make them more interested in speaking with you.

“I’m just going to do it online.” - Many consumers don’t understand the value that working directly with an insurance agent brings. Have a 10-20 second response prepared in response to this objection to emphasize the service, consultation, and personalized level of support they can receive from working with you that they won’t receive by only looking to buy online.

“I’ve been called too many times.” - There will always be people who feel they’ve been contacted too frequently, by too many salespeople. Be empathetic. Don’t keep them on the phone, but ask if they’re open to receiving more information or reconnecting at a later date. Respond along the lines of, “Since you took the time to fill this information out online, I wouldn’t be doing my job if I ended the call right now. Could I send you with a little information about what you could be getting, and follow up at a later date?” Then, send them the agreed-upon information by email or text.

“I did not request a quote.” - This one is specific to online leads. When you partner with a quotation. 100% of the information you receive is directly from consumers. Prospects may say this if they don’t feel comfortable talking on the phone to a stranger.

Don’t offer a quote or try to sell right away. When you receive a lead’s information, the first thing you want to do is confirm whatever information you have—such as address or auto make and model—with the consumer. Once you have confirmed their information, and the fact that they are interested in insurance, that validates your call and makes the consumer feel more comfortable talking with you.

5. Closing - All the above stages are building toward a close, when the lead agrees to a mutually-beneficial contractual agreement to work with your agency. While working through the steps above, a salesperson should always assume a prospect will close and this is where the conversation will end.

When speaking with the prospect, always be prepared to transition to the closing step. Have paperwork and logistics ready, and be ready to answer any final questions. If they aren’t closing that day, end the conversation with a clear understanding of the prospect’s intentions and next steps.

Insurance Fraud - Double Death Claim

A 55-year-old woman from Mumbai's Bhayander allegedly faked her death twice in two years. But why, you may ask? To claim insurance worth Rs 1.1 crore, of which Rs 70 lakh had already been paid out. The family managed to deceive four insurance companies.

How did she carry out the fraud - Kanchan Pai, alias Pavitra, bought insurance policies from Max Life, Bharti AXA, HDFC, and Future Generali, totalling approximately Rs 1.1 crore. After purchasing the policies, the family declared Kanchan dead and submitted fake death and cremation certificates to claim the insurance money.

Between 2021 and 2023, the insurance companies disbursed Rs 70 lakh based on these fraudulent claims. The scam came to light when one of the insurers noticed discrepancies while processing an additional claim of Rs 41 lakh, prompting an internal investigation. 

The first reported fake death occurred on October 11, 2021, with Kanchan’s son, Dhanraj, submitting documents that led to a payout of Rs 20.4 lakh after verification. Another insurer settled a claim of Rs 25 lakh for the same ‘death’.

On October 20, 2023, another death was recorded under the name Pavitra, with Rohit, the husband, receiving Rs 24.2 lakh. However, an audit in January 2024 raised suspicions due to inconsistencies like the same address but different names of the insured on Aadhaar and PAN cards, prompting insurers to exchange information and uncover the fraud. Realising their scheme was exposed, the family absconded.

In another case, last year in January, a man with insurance policies worth Rs 7.4 crore faked his death in a car accident. The man had multiple policies and staged a fatal accident to claim the money, highlighting the lengths to which individuals will go for financial gain.

Rising Insurance Premium - India

Rising insurance premiums have become a pressing issue for consumers. HDFC Life, ICICI Prudential, Bajaj Allianz and Max Life Insurance have hiked their term insurance premiums by 4 per cent to 7 per cent in past months. As consumers grapple with these rising costs, understanding the underlying reasons and exploring strategies to mitigate the impact is crucial.

Claims Experience - of insurers is the usually biggest factor behind premium hikes. Based on it, they have to keep revising the premiums periodically. They may revise the premiums themselves. Alternatively, their reinsurers may have increased the reinsurance premiums, after which insurers pass on the increase to customers.

Life Insurance companies are actively working to address the rising cost of life insurance. One key strategy is aligning with the Insurance Regulatory and Development Authority of India (IRDAI)'s push for affordable insurance.

Technology - Insurers are exploring ways to make life insurance more cost-effective through technological advancements. By automating underwriting processes and utilising data analytics, companies can improve efficiency and potentially offer lower premiums.GST rationalisation is another factor that can make life insurance more affordable. 

How can consumers tackle rising premiums?

Compare premium: One of the most effective ways to combat rising premiums is to compare quotes from different insurance providers.

Take advantage of discounts: Many insurers offer discounts such as bundling multiple policies, maintaining a claims-free record, or completing safety courses. Consumers should inquire about available discounts that could help lower their premiums.

Utilise top-up plans: Top-up health insurance plans offer additional coverage at a lower cost compared to standard policies.

Review and adjust coverage: Regularly assess your insurance needs. By understanding your financial goals and risk tolerance, individuals can tailor their insurance policies to meet their specific requirements without overspending.

Pay premiums in advance: Some insurers allow policyholders to pay premiums for multiple years upfront, which can lead to discounts. 

Malaysia Launch iMula

More than 40% of Malaysians remain uninsured, and the life insurance penetration rate stands at 58.6% as of 2023. Life Insurance Association of Malaysia (LIAM) claimed 48% of local respondents with dependents lack life insurance, 44% have no medical insurance, and 13% rely solely on company-issued medical cards.

iMula - The collaboration with Financial Education Network and Bank Negara Malaysia (BNM) has allowed LIAM to work closely with partners and affiliates under the network on various outreach programs and initiatives to promote financial literacy and encourage insurance ownership nationwide with Starter Pack Insurance Fund or i-Mula 50 today.

Insurance and takaful industry, in consultation with BNM, conducted a study to design tailored microinsurance products for the low-income market, including the B40 and M40 segments The study identified key risks, such as accidents, health issues, income loss, and bereavement, guiding insurers to develop affordable products that address these needs and promote inclusive growth.

LIAM launched i-Mula 50, an initiative designed to make life insurance more accessible and affordable for 100,000 eligible Malaysians. The RM5 million programme, established by Liam member companies, aims to support first-time buyers to purchase life insurance protection. Under i-Mula 50, 11 life insurance companies will offer 31 affordable protection plans, targeting youths and young families nationwide.

Malaysia’s current per capita policy ownership rate is about 58%. However, this figure does not consider individuals who hold multiple policies. The actual penetration rate falls to the low 40s. While this may not be low for a country like Malaysia, there is a significant potential for growth in this area.

Life Insurance Sales In Hong Kong Surged

Life insurance sales in Hong Kong surged by 12 per cent in the first half to a record high as a buying spree continued among mainland visitors and wealthy individuals in Hong Kong. A world record policy also helped.

New life insurance sales rose to HK$115.9 billion (US$14.9 billion) from the HK$103 billion reported in the same period last year, which itself was a record, according to the Insurance Authority. The level is the highest since the authority was established in 2016 and 16 per cent higher than the total of HK$99.9 billion in the first half of 2019, before the Covid-19 pandemic.

26% Policy Issued - Sales of policies to mainland visitors in the first half amounted to HK$29.7 billion, down 7 per cent from HK$31.9 billion a year earlier. Still, that is higher than the pre-Covid level, when mainlanders bought HK$26.3 billion of life and medical policies in the first half of 2019.

Mainland visitors accounted for 26 per cent of the total life and medical premiums in the first half. Besides mainland visitors, the strong growth was also due to HSBC Life issuing the world’s most valuable life insurance policy at the beginning of this year. The policy, with a protection value of US$250 million, was certified by Guinness World Records in February.

Though the premium was not disclosed, the sale was a major boost to total sales of new life insurance and helped HSBC Life maintain its position as the top life insurer in Hong Kong in terms of new sales in the first half.

Tax incentives - the Hong Kong government created in May last year to encourage wealthy people to set up family offices in the city, along with the introduction of the new Capital Investment Entrant Scheme in May, have made Hong Kong an ideal hub for attracting high-net-worth clients to buy jumbo policies for wealth management and estate planning. .

Other leading players, such as AIA Group and Manulife, also reported good sales growth in the first half.

US Dollar Attractive - Mainland customers like to buy insurance policies in Hong Kong as the products are sold in US dollars or Hong Kong dollars. This helps hedge against a falling yuan, which has weakened 13 per cent against the US dollar over the past two years.

In the first half, 21 million Travellers visited Hong Kong, an increase of 64 per cent from a year earlier, according to data published by the Hong Kong Tourism Board. Two-thirds were from the mainland.

Mainland Chinese tourists last year spent HK$59 billion on life and medical insurance policies in Hong Kong, higher than the level recorded in 2017 and 2019 of HK$43 billion to HK$51 billion, respectively.

The increase in the number of "Hongkongers travelling outside of the city also drove up demand for travel insurance, sending new premiums for accident and health insurance up 12.5 per cent to HK$11.7 billion in the first half, the Insurance Authority’s data showed.

Indonesia Declining Middle Class

A declining middle class population in Indonesia is ringing alarm bells in the country even as the government introduces a raft of measures aimed at supporting this group. More support is needed to bolster this segment of the population to prevent a further drop.

Middle Class Decline - According to the latest numbers from the Central Bureau of Statistics (BPS), the number of people classified as middle class has declined by close to 9.5 million in the past five years. In 2019, the middle class population in Indonesia numbered at 57.33 million. BPS data shows that this has dropped to 47.85 million in 2024.

The World Bank defines those in the middle class as individuals whose expenditure each month - used as a proxy for income - range from 3.5 to 17 times above the poverty line, which BPS data equates to approximately 2 million rupiah (US$130) to 9.9 million rupiah per capita.

The middle class population began to decline after the (COVID-19) pandemic, while the aspiring middle class increased. In line with the decrease in the number of people classified as middle class, the number of those classified as part of the aspiring middle class has increased within the same period of five years.

Those classified as part of the aspiring middle class segment of the population increased from 128.85 million in 2019 to 137.5 million this year. They form 49.22 per cent of Indonesia’s population. These two segments make up about 66.6 percent of the country’s population, and stressed the importance of the middle class for Indonesia's economy, describing it as the driving force for economic growth.

The Golden Indonesia 2045 vision is a long-term plan which aims to make Indonesia an advanced and prosperous country by its 100th independence anniversary. To support the middle class, the government has implemented various initiatives, including social protection programs, tax incentives, the Pre-Employment program, as well as the People's Business Credit scheme, among others.

Post Covid - However, analysts said that beyond the lingering effects of COVID-19, other reasons that have contributed to a decline in Indonesia’s middle class population include weak national economic fundamentals, burdensome government policies, as well as the absence of a robust social safety net.

The weak performance of the manufacturing sector is a significant factor in the shrinking middle class. The downturn in the manufacturing sector has led to widespread layoffs and the decline in the industry's share of the gross domestic product.

Since the beginning of 2024, the Indonesian Confederation of Workers Unions of the Archipelago has predicted that layoffs in the labour-intensive manufacturing sector could affect as many as 100,000 people.

VAT - One government policy that has further strained the public’s purchasing power is the increase in the value-added tax (VAT) rate, which took effect on Apr 1, 2022. The VAT increase contributes to higher retail prices. This added to the higher cost of living situation is further exacerbated by the lack of social safety nets for the middle class, since most of the government's focus is primarily on providing social assistance to the poor.

Unhappy Motorcycle Taxi Drivers

Over 1,000 motorcycle taxi drivers staged a strike in several Indonesian cities on Aug 29 to protest against their low pay, and called on the government to provide them more protection from the practices of ride-sharing companies that are said to be unfair.

Drivers wearing trademark green jackets gathered outside the communications ministry and near the Jakarta offices of Indonesia’s largest technology company GoTo and South-east Asia’s biggest ride-hailing and food delivery firm Grab.

Motorcycle taxis are ubiquitous across Indonesia, including in the capital Jakarta, known for some of the world's worst traffic congestion, and the protests prompted some complaints on social media of slow services.

GoTo & Grab - GoTo and Grab offer ride-hailing, food delivery, and other services in several South-east Asian countries, and have a combined market capitalization of about US$18 billion (S$23 billion).

Drivers want ride-hailing firms to increase the share they get for every trip they complete from 80 per cent now and for the government to give special status for their terms of employment so they have more bargaining power over fees. Driver claimed to work for 10 hours every day but made less than 150,000 rupiah (S$12.60) most days. This means the daily income is below Jakarta’s minimum wage of 5 million rupiah.

The companies recognize drivers as partners, so they do not have the legal obligation to set minimum wages, pay social security insurance or limit working hours. 

Igloo Insurance Agent Digital Tools

With the launch of Ignite in the Philippines, Igloo says it aims to support intermediaries in the country with essential digital tools to enhance productivity and contribute to increasing insurance penetration, which currently stands at just 1.75% of the entire population. 

Over the past year, Ignite has expanded its features from nine to 20 advanced tools, improving usability and productivity for sales intermediaries. In a statement, the insurtech noted that this development has resulted in a satisfaction rate exceeding 95%, with users highlighting the “straightforward registration process”, “good coverage of insurance products”, and “simple quote and application process”.

In addition, a survey by tech-powered impact measurement company 60 Decibels revealed that nearly 60% of 305 sales intermediaries surveyed, reported an increase in income since partnering with Ignite, with 76% learning useful skills and 73% acquiring opportunities to advance in their roles.

In response to user feedback, Ignite now includes a new iLearn feature, providing access to training content in various formats such as pdf documents, infographics, videos, and quizzes, to improve insurance product knowledge and selling skills.

Additionally, Igloo has introduced a new Ignite microsite to assist in recruitment, offering valuable content for those interested in full-time or part-time careers in insurance sales. Ignite is also available as a white-label solution for insurers seeking to digitise their sales activities and processes.

Insurance Digital Makeover

Most traditional industries are undergoing a digital makeover due to the increased usage of smartphones and other instant access to information. The insurance sector, once synonymous with stacks of paperwork and lengthy meetings with agents to get quotes, is no different.

InsurTech - an emerging category in the connected economy, is spearheading this digital transformation, with startups leveraging advanced tools and technologies — from artificial intelligence (AI) to big data analytics — to transform how individuals choose and purchase insurance.

The proportion of consumers shopping online for insurance surged from 22% to 27% between 2022 and 2023, while those turning to agents dropped from 42% to 35% over the same period. This reveals a notable trend among younger consumers, who are turning to online communication channels when assessing life insurance options.

While younger individuals are more likely to have auto and health insurance, over 60% of Gen Z and millennial consumers plan to purchase one or more insurance types within the next 12 months, with nearly half eyeing life insurance specifically.

Streamlining & Convenience - One significant way digital platforms are transforming the life insurance landscape is through the simplification of the purchasing process. Websites and mobile apps offer intuitive interfaces that guide users through the process, eliminating the need for complex forms and confusing terminology.

Moreover, with just a few clicks or taps on their smartphones or computers, consumers can compare quotes from multiple insurance providers, assess different policy options, and make informed decisions about their coverage.

By inputting basic information such as age, health status, and desired coverage amount, users can receive tailored insurance options in seconds, enabling them to make informed choices without the need for extensive research or consultation.

Bridging Insurance Agents - InsurTech firms are also transforming the sector with platforms tailored for life insurance agents, enabling agents and their clients to access near-instant quotes, compare, and apply for life insurance and long-term care insurance across multiple major carriers.

The process with an eApplication software that can be completed in just five minutes, and also provides agents with personalized websites which can be integrated into existing sites as white-label widgets. Prioritizing agents’ convenience underscores the industry’s recognition of the crucial role professional guidance plays in the insurance process. 

In fact, despite their preference for online convenience, Gen Z and millennial consumers continue to place significant value on the guidance and expertise of financial professionals, even as they conduct their research and gather information online.

Specifically, nearly half of each demographic value the expertise provided by financial experts when making their ultimate insurance purchase decisions. This preference is rooted in a widespread lack of confidence among young consumers regarding their understanding of insurance products. 

In conclusion - digital platforms are reshaping the life insurance industry by streamlining the purchasing process for consumers, while simultaneously equipping agents with advanced tools and technologies. This convergence of technological innovation and professional expertise is positioning the sector to better meet the evolving needs of today’s connected consumer.

Starbucks CEO Ousted

Starbucks has announced the departure of its Indian-origin chief executive office (CEO) Laxman Narasimhan, who had been with the company for less than a year. Narasimhan, who took over as the chief executive in March 2023, has been replaced by Brian Niccol, the current chief executive of Chipotle Mexican Grill. The change is ‘effective immediately’, and Narasimhan will also step down from his position on Starbucks’ board of directors.

Who is Starbucks’ former CEO Laxman Narasimhan?
Narasimhan’s nearly 30-year career includes him taking on several prominent roles in global companies. Born on May 15, 1967, in Pune, India, Narasimhan holds degrees in Mechanical Engineering, German, International Studies, and Finance, having studied at institutions including the University of Pune and the University of Pennsylvania.

He spent nearly two decades at McKinsey & Company, where he advised businesses in various sectors, followed by a successful tenure at PepsiCo, where he held several high-profile positions, including global chief commercial officer.

Before joining Starbucks, Narasimhan served as CEO of Reckitt, where he focused on expanding the company’s e-commerce presence and supporting the workforce during the Covid-19 pandemic.

He also gained a reputation for prioritising work-life balance was highlighted in a recent interview, where he mentioned his practice of not working past 6 pm — a stance that resonated with many but may have been out of sync with the demands of leading a global brand like Starbucks.

Why was Laxman Narasimhan ousted as Starbucks CEO?
This sudden leadership change comes as the coffee giant grapples with declining sales and increasing pressure from activist investors. Under Narasimhan’s leadership, Starbucks has struggled to maintain its market position, with the company reporting two consecutive quarters of declining comparable sales. The situation was further exacerbated by a disappointing earnings report in April, which highlighted the impact of weakening consumer sentiment and difficult market conditions in China. This has been a tough year for Starbucks, with its stock price falling by 20 per cent before the announcement of Narasimhan’s exit.

This change also comes at a time when Starbucks is working to finalise contracts with its unionised stores, an area where Narasimhan had been seen as more open to unionisation efforts compared to his predecessor.

Starbuck, among other major US-based companies, including McDonalds, had also faced significant controversy towards the end of 2023 tied to the Israel-Palestine conflict. There were many cries of boycott against the global coffee chain due to Starbucks’ alleged ties to Israel. This opposition to the coffee chain also affected its partnerships, most notably South Korean boy band NCT. NCT reportedly lost millions of followers in the month of May upon announcing its collaboration on merchandise with the firm. The news also led to fresh cries for boycott.

Who will replace Narasimhan as Starbucks CEO?
The decision to bring in Niccol as the new CEO appears to be driven by investor concerns, particularly those voiced by activist funds such as Elliott Investment Management. The fund, which has a stake in Starbucks, had been pushing for changes to boost the company's share price. Niccol, who has been at the helm of Chipotle since 2018, is credited with driving significant growth and increasing the chain’s profitability, making him an attractive choice for a company in need of revitalisation.

Hanwah Life Acquires Nobu Bank

Hanwha Life Insurance has become the first domestic insurance company to venture into overseas banking.

The company announced on April 24 that it will acquire a 40 percent stake in Nobu Bank held by Lippo Group, the sixth largest conglomerate in Indonesia. The process of equity investment will be finalized through contract signing between the two parties and approval from regulatory authorities in both countries. Currently, Lippo Group is the largest shareholder of Nobu Bank, but after the agreement, Hanwha Life will become the largest shareholder.

This marks the first time for a domestic insurance company to venture into overseas banking. Earlier this year, the Financial Services Commission allowed insurance companies to own foreign banks through amendments to the Enforcement Decree of the Insurance Business Act.

Established in 1990, Nobu Bank is a mid-sized bank ranked within the top 30 locally. With total assets of 2.3 trillion won (US$1.67 billion) as of the end of last year, it owns 115 branches across Indonesia. The bank has a workforce of 1,247 employees. Its main products include personal mortgage loans and working capital loans for small and medium-sized enterprises. It reported a net profit of 12 billion won last year.

Indonesia, along with Vietnam, is renowned for its high growth potential in Southeast Asia. With a population of 270 million, Indonesia ranks fourth in the world. In 2022, its gross domestic product (GDP) growth rate reached 5.3 percent, outpacing South Korea’s 2.6 percent and the global average of 3.1 percent.

Hanwha Life’s successful investment in Nobu Bank is largely attributed to the leadership of Kim Dong-won, Chief Global Officer (CGO) and President. Kim, the second son of Hanwha Group Chairman Kim Seung-youn, assumed the role of CGO in February last year and has been spearheading Hanwha Life’s overseas operations ever since.

President Kim has focused on building a network with global leaders by attending the World Economic Forum, also known as the Davos Forum, six times. The contract this time was also initiated by a conversation between Kim and John Riady, CEO of Lippo Group, at the Davos Forum in January this year.

Hanwha Life and Lippo Group have maintained a friendly cooperative relationship. Hanwha Life acquired a 62.6 percent stake in Lippo General Insurance, the 14th largest non-life insurance company in Indonesia, in March last year. Hanwha Investment & Securities, a sub-subsidiary of Hanwha Life, is also awaiting regulatory approval after signing an acquisition agreement with Lippo Group affiliate Ciptadana Securities and Ciptadana Asset Management in June last year. With these developments, Hanwha Group has completed its portfolio of a comprehensive financial company in Indonesia, covering life insurance, non-life insurance, banking, and securities.

Hanwha Life plans to use Indonesia as a base to pursue its expansion strategy in Southeast Asia. In the future, it aims to maximize synergy by utilizing Nobu Bank’s bancassurance channels to sell products from Hanwha Life Indonesia and Lippo General Insurance.

Hanwha Life’s first overseas subsidiary, Hanwha Life Vietnam, became the first domestic insurance company this year to receive cash dividends of approximately 54 billion won from its overseas local subsidiary.

Asuransi Jiwasraya Disbanded

The Indonesian government will disband troubled state insurer PT Asuransi Jiwasraya in September after clinching a deal with policyholders. The country’s oldest insurer reached a deal with 99.7% of policyholders to transfer their policies to insurance holding firm PT Asuransi Jiwa IFG.

The transfered policies were valued at 38 trillion rupiah ($3.2 billion), local news outlet Antara reported, citing a Financial Services Authority official. Jiwasraya was founded as a Dutch-owned entity in 1859 and was nationalized by the Indonesian government in 1960.

A 2016 audit revealed violations of investment guidelines that eventually led to a negative equity of more than 28 trillion rupiah, prompting the government to begin work to rescue the company. Its near collapse hurt more than 7 million clients across the country.

Nestle CEO Sudden Departure

CEO Mark Schneider was ousted in a sudden decision by the world's biggest foodmaker as a result of the group's underperformance. Nestle announced Schneider's departure late on Thursday following a board meeting and appointed company veteran Laurent Freixe as its new CEO. This put an end to a near eight-year tenure by Schneider, a 58-year-old German, the first company outsider to lead Nestle in nearly a century.

Nestle shares hit a record high in January 2022 as the group enjoyed a pandemic-driven boom, but they have been on a downward slide since May 2023 after a series of mishaps, earnings misses and guidance downgrades. There were also worries about slowing product development, with new and revamped products taking longer to be devised and rolled out, with the accompanying marketing campaigns. The virtuous circle of introducing products, which generated cash for new products, was slowing down. That was a real concern.

Nestle's price-to-earnings ratio, used to gauge the relative value of a company's stock, is 17.7, down from more than 25 in June 2022. That is higher than the consumer goods industry average of 10, but below rival Unilever's 18.5.

Analysts said uncertainty about whether Nestle could reach its 2024 and 2025 targets and concerns the new CEO may reduce profit guidance as he focuses more on sales growth than margins, were among the factors weighing on the stock. So far in 2024, Nestle's shares have lost 10.3% of their value, trailing Danone's 3.9% gain and lagging Unilever's 29% increase.

Industry analysts have said Nestle has been too reliant on price increases, which have hit sales volumes as cash-strapped customers turned to cheaper brands.

Indonesia Medical Claim Spiked

Health insurance claims are on the rise in Indonesia, jumping by 29.6% to IDR5.96tn ($386m) in the first quarter of this year, according to the Indonesian Life Insurance Association (AAJI).
The data shows that health insurance claims have been rising by 25% to 30% since mid-2022.

This has exceeded the medical inflation rate of 13% in Indonesia in 2023. Insurance, Guarantee & Pension Fund Supervision unit of the OJK deputy commissioner and caution insurance companies to be able to undertake risk profiling and mapping.

Indonesian Life Underwriters Association said that the current trend of rising claims in the life insurance industry is an alert to the industry to increase synergy between underwriters and claims management. He says that such synergy is currently still not optimal and can be improved as risk categorization by underwriters will guide the claims management department in processing claims.

Era Of Smiling & Dialing Is Over

Life insurance is a subject upon which neither prospects nor Agents care to dwell. Product designs can be complex, and events that trigger benefits don't evoke pleasant images, unlike retirement planning advertisements that contain sailboats and strolls on the beach.

However, the need for life insurance exists across a large segment of consumers who generate income and borrow money. Finding ways to increase life insurance sales reverts back to some time-tested methods and involves a few new wrinkles to help agents tap evolving markets.

Know Your Stuff
Find a key product (attractive & saleable) and learn it inside and out. Prospects are impressed with Agents who possess a thorough knowledge of the contracts they promote. Unit-linked policy designs and riders are complex, but educating yourself on features, benefits, and sub-accounts helps move sales opportunities forward. Aimlessly pivoting between products may muddle the presentation.

Develop the habit of conveying policy benefits to potential buyers in plain terms. Rather than using industry jargon and acronyms, discover a way to engage prospects without sacrificing transparency. Buyers need to know what they're getting. Less confusion at the point of sale aids in sales successes, as well as policy retention.

Hone Your Presentation Skills
Putting prospective clients at ease in an appointment setting translates into improved closing ratios. Before launching into a formal presentation, finding some common interests is an effective way to connect with potential buyers. The sales track should be organized, simplified and most importantly, brief.

Avoid dominating the conversation in the sales meeting. Through open-ended questions, involve the prospect in the process and retain interest through interaction. Agent needs to be more authentic in their communications. Candid discourse between advisors and potential purchasers helps ease anxiety and facilitate sales.

Have A Story
Many seasoned Agents have relatable stories that humanize the life insurance purchasing process. The tales don't necessarily have to center around tragedy. After all, life insurance policies have living benefits, as well: providing liquidity for an emergency fund or supplementing retirement income.

On the other hand, some buyers are moved by emotion. Parents want to see their children attend college and spouses wish to ease the fiscal burden for their partners. Most Agents have had to deliver a check that helped to stabilize the lives of beneficiaries. Be prepared to tell your story when the proper circumstances arise.

Create A Partnership
It's true that the best advertising is free. Word of mouth goes far in building a client base. Going it alone can be cumbersome, especially when your strengths may extend to financial products and services other than life insurance. If this is the case, pursue a symbiotic relationship with an Agent who specializes in life insurance sales. The partnership may spawn a small referral network from which sales increase and split commissions flow. Adopting a team approach and creating synergies lets clients know that you are a committed fiduciary. 

Leverage Social Media
Successful life insurance sales remain a numbers game. The more prospects you solicit, the more likely you are to close deals. With the crush of digital advertising, social media platforms such as Facebook offer an effective means for inexpensively marketing services to thousands of buyers within your geographic area. Nearly 29% of consumers say they prefer to buy life insurance online.

Take advantage of the fact that most people own mobile devices and log in frequently during the day. The era of "smiling and dialing" is over.

Productive Salesman & Inept Manager

Managers play a crucial role in shaping an employee’s experience. Research shows that nearly 70% of the variability in employee engagement can be predicted by their managers’ behavior, decisions, and personality traits. In other words, whether people are happy, energized, or miserable at work depends mostly on their boss—and whether or not they’re an incompetent manager.

Employee Quit Their Boss Not Their Job
The impact of managers on employees often skews more detrimental than empowering. Many employees quit their boss, not their job. Research suggested that more than 50% of employees quit to escape an incompetent manager.

There are several reasons of managers being incompetent. One of the most glaring is inept individuals advancing their careers and climbing the organizational ladder to "fail upwards". 
Some incompetent managers get ahead due to their overconfidence or narcissistic traits. Some individuals can get ahead through their powerful connections, political skills or purely by some luck theory can’t explain.

Failing As Manager

It Is not uncommon for individuals who perform well in their jobs as individual contributors to fail to perform as expected when given managerial or leadership responsibilities, much like great individual athletes can disappoint after retiring and transitioning to team coaches or managers.

The core premise of the principle is simple: “In an organizational hierarchy, every employee tends to rise to his level of incompetence.” That is, people get promoted until they are no longer worthy of promotion, which means that their actual potential is where they end up minus one level, or the role before their stagnation.

The Peter Principle
The Peter Principle is an old concept, but it still explains some of the biggest problems in organizations: The presence of incompetent managers who frustrate their subordinates and the leaks and silos in talent development.

Many workers have experienced working with someone who ended up as your boss without having the leadership or management skills to manage people. According to the original example from the authors’ book, in a pill-rolling factory, a high-performing factory worker, once promoted to their first managerial role, would stay there until the end of their career because they did not have the people skills to manage effectively. Remember, these workers were promoted based on how fast they produced roll products but didn’t know how to manage other workers.

Sales Organization

A research done on promotion practices in 153 different sales organizations over six years, covering nearly 40,000 workers considered for promotion to managerial positions.

First, they found that companies still prioritize employees’ prior performance (individual sales performance in this case) over their managerial potential in their promotion decisions. It seems little has changed since the 1960s when many factories promoted workers into managerial roles based on manufacturing efficiency rather than managerial potential.

Second, they discovered that new managers’ pre-promotion sales performance was negatively related to their effectiveness as managers, such as in team management and creating collaborative commissions. High-performing sales workers often turn out to be less effective or incompetent managers.

Promotions focusing on past performance can lead to employees reaching their level of incompetence. This practice can be costly for organizations and individuals by promoting managers with inadequate skills or stripping promotion chances from those with excellent managerial skills who fall a bit behind in a cutthroat sales competition.

The core mechanisms of the Peter Principle are useful and insightful by showing that incompetent managers sometimes emerge not solely due to toxic characteristics or nepotism, but also because of inefficiencies in organizational incentive systems. The principle suggests that merit-based incentive systems can be problematic by promoting unprepared or unsuitable people into managerial positions in some cases.

Managing Change Management

Change management is a systematic approach to dealing with the transition or transformation of an organization's goals, processes and technologies. The purpose of change management is to implement strategies for effecting and controlling change and helping people to adapt to change.

Change management activities range from individual projects to large programs, such as digital transformation that introduces many new processes and applications. Change efforts often involve management teams and other stakeholders. Department-level management and employee buy-in is essential.

To be effective, a change management strategy must do the following:

-  Consider how a change will impact processes, systems and employees.
-  Include planning and testing the change, scheduling and implementing it as well as 

   documenting and evaluating its effects.
-  Provide documentation to maintain an audit trail if a rollback becomes necessary and 

   ensure compliance with internal and external controls, including regulatory compliance. 

What Are The Benefits Of Change Management

Taking a structured approach to change management helps organizations mitigate disruption, reduce costs, reduce time to implementation, improve leadership skills, drive innovation and improve morale. In addition, there are ways change management can add structure to IT and operations:

-  Improved documentation of enterprise systems.
-  Greater alignment between suggested change and what gets implemented.
-  Better starting point for automation initiatives.
-  Clearer understanding of why systems were made.
-  Ability to reverse-engineer changes made to existing business processes and infrastructure.
-  Better ability to identify what can be safely eliminated or updated.

Change Management For Project Management

Change management plays an important role in project management because each change request must be evaluated for its impact on the project. Project Managers - or the senior executives in charge of change control must examine how a change in one area of a project could affect other areas and what impact that change could have on the project as a whole. 

Project areas that change control experts should pay particular attention to include the following concerns:

Scope - A change request could affect the project scope

Schedule - A change request could alter the project schedule.

Costs - Labor is typically the largest project expense and changes that increase time to 

complete also raise project costs.

Quality - Change requests might affect the quality of the completed project. For example, accelerating the project schedule can affect quality when work is rushed.

Human Resources - A change request might entail bringing on additional or specialized labor. Also, when the schedule changes, key resources might be moved to other assignments.

Communications - Change management is interactive. Approved change requests must be communicated to the appropriate stakeholders at the right time.

Risk - Change requests must be evaluated to consider risks they pose. Even minor changes can have a domino effect on the project and introduce logistical, financial or security risks.

Procurement - Changes to the project can affect when, where and how materials and contract labor are procured.

When an incremental change is approved, the project manager documents the change in one of four standard change control systems to ensure all thoughts and insight have been captured with the change request. Changes that aren't entered through a control system are labeled defects. When a change request is declined, this is also documented and kept in the project archives.

Types Of Organizational Change

Change management can be used to manage many types of organizational change. The three most common types are the following:

Developmental Change - Any organizational change that improves previously established processes and procedures.

Transitional Change - Change that moves an organization away from its current state to a new state to solve a problem, such as implementing a merger and acquisition or automating a task or process.

Transformational Change - Change that radically and fundamentally alters the culture and operation of an organization. The result of transformational change might not be known ahead of time. For example, a company may pursue entirely different products or markets.

Popular Models For Managing Change

One of the popular model is ADKAR & Kotter's 8 Steps. 

ADKAR

Prosci founder Jeff Hiatt created the ADKAR model. It consists of five sequential steps:

-  Awareness of the need for change.

-  Desire to participate and support the change.
-  Knowledge of how to change.
-  Ability to implement desired skills and behaviors.
-  Reinforcement to sustain the change.

Prosci 3-Phase Process

This expands on the ADKAR model and includes three phases: preparing for change, managing change and reinforcing change. It provides a comprehensive framework for managing change initiatives.

Kotter's 8-Steps For Leading Change

Harvard University professor John Kotter's model has eight steps:

-  Create a sense of urgency.
-  Build a guiding coalition.
-  Form a strategic vision and initiatives.
-  Enlist a volunteer army.
-  Enable action by removing barriers.
-  Generate short-term wins.
-  Sustain acceleration.
-  Institute change.

What Are The Challenges Of Change Management

Companies developing a change management program from the ground up often face challenges. Besides a thorough understanding of company culture, the change management process requires an accurate accounting of the systems, applications and employees that changes are likely to affect. Additional change management challenges include the following:

Resource Management

Managing the physical, financial, human, informational and intangible assets and resources that contribute to an organization's strategic plan becomes increasingly difficult when implementing change.

Resistance

The executives and employees most affected by a change might not be amenable to it, resulting in a backfire effect. In many cases, this happens because people perceive that change will result in extra work. Transparency, training, planning and patience can help quell resistance and improve overall morale. Additionally, care should be paid to address and manage the emotional journey of employees during change.

Communication

Companies often fail to consistently communicate change initiatives or include employees in the process. Change-related communications plans require an adequate number of messages, the involvement of enough key stakeholders to get the message out, and the use of multiple communication channels.

New Technology

The application of new technologies can disrupt an employee's entire workflow. Companies can improve adoption of new technology by creating a network of early learners who champion the new technology to colleagues.

Multiple Points Of View

How individuals perceive the impact of change depends on their own personal view of it, from their own perspective – their ‘hilltop’. Leaders and managers will be looking at the change from their own personal hilltops in the organization, and what they see below may be different from what members of their staff may see who are elsewhere in the organization – on their hilltops – and looking down, and their views may differ from person to person. In any change initiative, success criteria may differ for people based on their roles in the organization and incentives. Managing the impact of these factors is challenging.

Scheduling Issues

Deciding whether a change program will be long or short term and clearly defining milestone deadlines is complicated. Some organizations believe shorter change programs are most effective. Others believe a more gradual approach to change reduces resistance and errors.

Importance Of A Change Management Plan
As a conceptual business framework for people, processes and the organization, change management increases the success of critical projects and improves a company's ability to adapt quickly. Business change is constant and inevitable. But when poorly managed, it can cause organizational stress as well as unnecessary and costly rework.

By standardizing the consistency and efficiency of assigned work, successful change management assures that the people affected by changes aren't overlooked. As changes to work occur, change management helps employees understand their new roles and build a more process-driven culture.

Change management also helps companies remain dynamic in the marketplace and encourages future growth.

Principles Of Change Management
Three principles of organizational change management build on the three stages of change management. 

Unfreeze The Current Stage

Change Agents need to identify what precisely they want to change. They must formulate a "why" that other participants are likely to buy into. In essence, they need to reverse-engineer the future state and translate this benefit to other possible participants. Then they get people to participate in the new idea. This could include executive sponsorship for a big change or co-workers for a departmental change.

Change The System

At this stage, change agents and any collaborators can put the change into practice. The change agents must work with collaborators to communicate the idea and bring other participants on board. It is important to pay attention to any pushback and find areas of shared understanding to either help move the change forward or shift its implementation in response to feedback. Tension might be high as everyone gets used to the new system. It's important to be respectful of their feelings and ideas.

Refreeze

Eventually, people get used to the new system, or they revert to what was working before. At this stage, it is important to declare that the change is over whether accepted or rejected. Even if the change was rejected, declaring it over gives everyone a chance to relax. It is also helpful at this stage to document what happened for future reference.

Conclusion
In general, most people don't like change, even if it's for the better. Some of the best practices to mitigate resistance to change:

-   Clarify the goal of the change being made and identify how it can benefit others.
-   Listen to objections and find ways to address them.
-   Take the time to build consensus rather than bulldoze dissenters.
-   Consider feedback as a guide rather than an obstacle.
-   Celebrate success at the end to encourage further change
-   Be willing to backtrack when the change doesn't meet desired goals.

PasarPolis Growth in South-east Asia

Indonesia-based insurtech firm PasarPolis claimed that it is now poised for profitable growth and is preparing for its next major step: expansion into Singapore. The firm said in a statement that building on its successes, it aims to further expand regionally, targeting new markets such as Singapore and consolidating its position as a dominant force in Southeast Asia’s.

Innovations & Expansion - The company said it remains committed to continuous innovation, with plans to introduce new products and enhance existing offerings to cater to evolving market demands. It also emphasized that the firm is on track to become profitable, leveraging technology, data analytics, and strategic partnerships to drive sustainable growth, profitability, and market leadership in the insurtech sector.

It is noted that the firm anticipates a 50 percent compound annual growth rate (CAGR) over the next four years and plans to fully underwrite all products within this period. According to the statement, the firm continues to strengthen its position in the region with impressive milestones in Vietnam and Thailand.

Expanding beyond Indonesia into Southeast Asian markets like Vietnam and Thailand, the firm said it has solidified its position as a regional leader in the insurtech industry, focusing on profitability, sustainability, and innovation.

It noted the operations in these markets have proven highly effective, driven by strategic partnerships and a customer-centric approach. These achievements highlight the firm’s successful strategy of collaborating with ecosystem partners for impactful market entry and expansion.

It is noted that since its expansion into Thailand and Vietnam in 2019, PasarPolis has achieved millions in policy sales, underscoring its commitment to democratizing insurance and leveraging technology to address the unique needs of local markets.

PasarPolis said this success further demonstrates its dedication to innovation and customer-centric solutions in transforming the insurance landscape across Southeast Asia.

Revenue Growth - PasarPolis reported impressive financial performance, achieving a 2 times revenue growth since its last funding round until 2023, while consistently maintaining positive gross margins. Its gross written premium (GWP) surged by 250 percent in the fiscal year, showcasing significant growth for the company.

PasarPolis’ full-stack insurtech ecosystem thrives by integrating seamlessly with partners. Following a fruitful partnership with e-commerce giant Shopee in Indonesia, the firm has extended this collaboration to offer insurance protection to users in Thailand and Vietnam. 

In Indonesia, the firm offers gadget and cracked-screen insurance through Shopee, providing accessible and affordable protection for electronic devices. In Vietnam, the partnership has expanded to include comprehensive gadget insurance and product liability coverage, ensuring customers can safeguard their purchases with ease.

Meanwhile, Thailand has seen the successful launch of digital electronic protection, a first in the country, which has garnered significant consumer adoption and satisfaction. These achievements demonstrate the scalability of PasarPolis’ platform, enabling easy expansion into other major markets with minimal investment.

Besides Shopee, PasarPolis also partners with other notable brands in multiple markets, such as VFS Global – the world’s largest outsourcing and technology services specialist – in Indonesia and Thailand.

Other key partners in the region include VNtrip, Sendo and Chotot.

1 Million Policies - Since expanding overseas, PasarPolis has sold nearly one million policies in each market, Thailand and Vietnam, reflecting the strong demand and successful adoption of its innovative insurance solutions.

South Korea Insurance Fraud Rising

South Korea National Police Agency reported that the number of insurance fraud cases reached 1,600 last year, a slight increase from 1,597 in 2022. The number of individuals detained in connection with the crime reached 6,044, a 24.6 percent increase from 4,852 the previous year. A total of 107 people were arrested, up 18.9 percent from 90. Insurance fraud amounted to over 1.11 trillion won last year, a 26.7 percent increase from 880.9 billion won in 2019.

Falsifying Claim - A nurse and a doctor at a medical clinic in Daegu and two insurance firm sales representatives were indicted without physical detention last month. Also indicted were 94 people who falsely claimed insurance payouts. All of them face charges of insurance fraud for their involvement in netting a combined 1.1 billion won ($802,743) in payouts between 2018 and 2021.

The clinic staff, according to the police, sent a portion of the payouts to patients registered as having undergone surgery or costly treatments in medical records they falsified. The years of fraud were uncovered after a group of insurance firms filed a report with the police, suspecting orchestrated efforts by the small clinic that reported repeated cases of high payout claims for conditions that are not so common.

New Law - Expectations are growing that cases similar to this would become less frequent deterred by the implementation of a new law governing the penalties for insurance fraud. The long-awaited revision allows financial authorities to refer potential cases for investigation at the first signs of attempted fraud. Previously, the actionable offense was claiming payout after defrauding someone .

Some says the revision is toothless because it falls short of recovering fraudulent proceeds. Also lacking is tougher punishment for industry insiders as part of overall strengthened penalties, a measure long advocated by the insurance industry.

The ceiling for the fine for insurance fraud was raised to 50 million won, up from the previous 20 million won. But insurance fraud does not lead to a prison term as frequently as non-insurance fraud does.

Reports Of False Claims Or Staged Accidents - will trigger an immediate investigation, corroborated by data provided by the health ministry-supervised, state-run NHIS and employment benefit system for previous track records. Insurance fraud is hard to identify, especially when organized with each of the gang members knowing exactly what to do to make it look like an accident or pass the scrutiny of insurance firms.

Malaysia Insurance Industry Update 2024

The life and family takaful and non-life sectors are expected to see slower growth in 2024 due to inflationary pressures. In addition, both are adequately capitalized to absorb some margin compression and potential shocks.

Both have a stable outlook on the Malaysian insurance and takaful sector, which is supported by steady growth in insurance demand, with capitalisation robust and claims under control.

Slower Growth 2024 - It is forecasted that a slower year-over-year new business (NB) expansion of 3.5%-4.0% in 2024 (2023: +4.2%) in the life and family sector as consumers face rising costs, anticipating the planned reduction of RON95 petrol subsidies and noting that policy surrenders and forfeitures have already crept up.

Medical claims - have also surged recently, trimming the earnings of life insurers and family takaful operators, with repricing exercises being implemented to counteract this shift. Bank Negara Malaysia (BNM) advices insurers and takaful operators to include cost-sharing provisions in new individual medical and health products. This could partially stem medical inflation though we view this to happen over the longer term.

Motor Insurance - Car sales has led to projections of general insurance and takaful sector premiums growth at 5% this year, slowing down from 9.4% seen in 2023, with margins at their thinnest in a decade and expected to remain compressed amid intense competition.

Capitalization - will stay strong as sufficient buffers are in place to withstand potential shocks. Industry capital adequacy ratios as at end-December 2023 were over 200% (required minimum: 130%).”

Digitalization - efforts by existing industry players and upcoming digital insurers and takaful operators (DITOs) will help enhance customer experience and move insurance penetration closer to the central bank’s target of 4.8%-5.0% of GDP.

BNM recently launched a licensing and regulatory framework for DITOs which will promote greater innovation within the industry and help narrow the protection gap especially among the underserved segments. This encourages the adoption of new and emerging technology-based solutions, with licensees expected to advance in three core areas: inclusion, competition and efficiency.

In the medium term, the entry of DITOs would intensify competition while also complementing existing players targeting the underinsured and uninsured. The application period for said licenses is to open in January 2025 and close in December the following year, with no limit set for the number of DITO licences to be awarded.

Financial market volatility continues to heavily influence the returns of insurance and takaful operators, particularly those in the life/family takaful sector given substantial investment assets held. It is expected that family takaful to continue to make up between 40% and 50% of NB premiums, especially as the Islamic banking sector continues to outpace its conventional counterpart in line with the “Islamic first” strategy adopted by various banks.

Life Insurance Agent & Ghost Customers

Desperate to achieve her sales targets, a financial adviser  forged multiple signatures in registering insurance policies for multiple victims. Lai Mei Lin, 32, was sentenced to eight months’ jail on Aug 6 after she pleaded guilty to a total of five charges – two charges of unauthorized access to computer material and three relating to forgery. Four additional charges over similar offences were taken into consideration during her sentencing.

Ghost Customer - At the time of the offences, Lai had held the position of assistant vice-president and was working as a unit manager with Manulife Financial Advisers. In December 2019, Lai met a former colleague and proposed using his personal details to register for an insurance policy. Lai told him that he would not have to pay for the policy as she would do so.

Lai told him that she wanted to hit her sales target and was willing to spend money to complete policies. He gave her his personal details, including a copy of his NRIC. On Dec 20, 2019, Lai registered an insurance policy with her former colleague’s particulars using a company account belonging to a financial representative she was supervising.

Lai logged in to her down-line's account to register the insurance policy for her former colleague. With neither Lai’s former colleague nor Tan physically present, Lai then dishonestly affixed eight false signatures to various documents before submitting them to herself for approval.

After Lai arranged for payment of the policy premium of $7,031.20 on behalf of her former colleague, Manulife Financial Advisers paid Lai, Tan and Lai’s branch manager a total of $8,354.30 in commission, overriding fee and bonus payments.

Surrender Policy - On Dec 20, 2020, Lai filled in a surrender form with her former colleague’s details and a fake signature purportedly signed by him without his knowledge, and submitted it to her company. In a similar manner, Lai caused three other policies to be registered under three different people’s names. One of them involved another financial representative she was supervising.

On April 29, 2022, Tan made a complaint to Manulife Financial Advisers regarding Lai and the company conducted an investigation, only to find it inconclusive then due to Lai’s lack of cooperation.

Walgreens To Close More Store

Walgreens is set to close a substantial number of its roughly 8,600 locations across the United States as the company looks to reset the struggling pharmaceutical chain’s business. The company didn’t announce a specific number of store closures, but it is planning “significant” closures of underperforming stores across America as part of a multiyear optimization program.

Changes Are Imminent - Company CEO said that “changes are imminent” for the roughly 25% of stores that aren’t profitable and Walgreens’ strategic review will “include the closure of a significant portion of these underperforming stores. Company is at a point where the current pharmacy model is not sustainable and the challenges in our operating environment require we approach the market differently.

The closures would focus on locations that aren’t profitable, too close to each other or stores struggling with theft. The changes would take place over the next three years. The company will consider additional closures if performance doesn’t improve. The “vast majority” of employees working at affected stores will be offered jobs elsewhere.

Stock Plunges On Weak Outlook - Walgreens’ shares fell 20% to its lowest level in decades. The company also said in its earnings statement that it has slashed its full-year profit outlook.

Walgreen continues to face a difficult operating environment, including persistent pressures on the US consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins. Company results and outlook reflect these headwinds.

Inflation has taken a big bite out of the drug store business – both at the front-end and the back-end of pharmacies. Shoppers are “becoming increasingly selective and price sensitive on their selections. Operating environment to remain challenging” in the US and doesn’t “expect an improvement.

Sales rose 2.6% to $36.4 billion for the quarter. That might not “look unreasonable, but this is running below inflation and, across some segments of the business, represents a loss of market share.

Particularly concerning for Walgreens was its retail sales falling 4% for the quarter. But that isn’t surprising because it’s front-of-store struggles have been “exacerbated by the cost-of-living crisis which has seen customers curtailing the volume of products they buy and shopping around more for the best deals and bargains.

Walgreens slashed prices on more than 1,000 items in May following rivals in an effort to lure back inflation-weary shoppers turned off by high prices. But the company said Thursday that would hurt its profitability.

Struggles For Drug Stores - Major drugstore chains, including CVS and Rite Aid, have struggled in recent years because of declining profits from filling prescriptions. They’ve declined because of lower reimbursement rates for prescription drugs and new competition from Amazon.

The front end of drugstores, where they sell snacks and household staples, also face pressure from larger competitors, including Target and dollar stores.

Walgreens’ store assortment will change and it has removed eight national brands and instead started selling similar items produced by its house brands or “preferred partners.”

Although drugstores benefited during the pandemic from people getting Covid-19 vaccines, fewer consumers are visiting stores to shop. Prescription volumes are also falling because people are getting fewer elective procedures.

GLP-1 drugs, which include Ozempic and Mounjaro to treat weight loss and diabetes hasn’t been a boon for the chain. Wentworth told the Journal it’s losing money on filling those prescriptions.

Pivoting the business model hasn’t helped, either. Walgreens will no longer have a majority stake in VillageMD, a primary care network that the chain once had major plans to open full-service doctors’ offices in hundreds of its stores. Walgreens said the value of its ill-fated VillageMD merger has fallen so much, it was forced to take a massive $6 billion writedown on its balance sheet.

In the past few years, CVS has closed about 900 locations and Rite Aid, which entered bankruptcy in October, closed more than 100. 

RHB Policy Accident Claim - Unenforceable

A widow has been denied leave to appeal a ruling barring her from bringing a claim against an insurance company over a construction site accident in which her husband lost his life almost five years ago.

Grant Of Leave Rejected - A three-member Federal Court bench said the four legal questions posed by S Jachintha did not warrant the grant of leave to appeal under Section 96 of the Courts of Judicature Act 1964. To secure leave, the applicant was required to satisfy the court that the appeal raises novel legal and constitutional questions of public importance for the first time.

The decision effectively affirmed the Court of Appeal’s ruling that a construction area does not fall within the definition of a road under the Road Transport Act 1987 (RTA).Section 2 of the RTA provides that a road means any public road and any other road to which the public has access

On Nov 23, 2019, Jachintha’s husband N Lingappan, a lorry driver, was involved in an accident at a construction site in Banting, Selangor. RHB was the insurer of a tipper truck owned by Twe Lai Poh, which was driven by Rahman Sahaba.

The mishap occurred when Rahman was attempting to unload earth from the lorry. Its bucket tumbled over and struck the lorry driven by Lingappan, who died in the accident. Two years ago, his 33-year-old widow filed a negligence suit in the sessions court in Sepang.

RHB Intervened In The Suit. The insurance company also filed an originating summons at the High Court in Kuala Lumpur seeking a declaration that the policy was unenforceable because the accident did not take place on a road

.On Oct 25, 2022, the High Court declared that the insurance company had no liability under Section 91(1)(b) of the RTA. Jachintha’s appeal to the Court of Appeal was dismissed, giving rise to her application to the Federal Court.

Allianz Failed to Decline Claim

The High Court here has upheld a lower court decision in favor of a bankrupt who had purchased insurance, saying the onus was on his insurer to carry out due diligence. The court also said that any contract entered into good faith was legally binding even when one party was bankrupt.

Allianz Declined Claim - The High Court ruled that Allianz General Insurance Company (Malaysia) Berhad must now honor a policy it sold to 58-year-old mechanic Chong Hing Fook, who lost his left thumb in a workplace incident more than six years ago. Chong had to have his left thumb amputated after a car jack failed, causing a car tyre to land on and crush it on May 20, 2018, at TDS Tamil Enterprise in Gurun, Kedah.

Chong, who had purchased the policy from Allianz on March 13 that same year, had sought treatment at a private hospital in Sungai Petani, with the insurer covering the RM11,279.65 surgery. However, when he claimed for the remainder of the sum and permanent disability benefits, the insurer declined on grounds that his failure to disclose his bankruptcy when purchasing the policy was a material non-disclosure.

Bankrupt - Allianz found that Tan had been declared a bankrupt in 2004. According to court filings, the insurer argued that had they been aware of Chong’s financial standing, they would have not insured him from the onset.

The insurer also claimed that Chong had failed to secure the permission of the insolvency director-general prior to applying for the policy. Chong subsequently filed an originating summons against Allianz, and the sessions court here ruled in his favor in 2022.

Allianz Underwriting - In its ruling, the lower court found that Allianz failed to conduct due diligence on Chong and failed to question him on his bankruptcy status. 

Citing Sections 38 and 54 of the Insolvency Act 1967, sessions judge Nasir Nordin ruled that being a bankrupt did not prevent a bankrupt from entering into a bona fide (good faith) transaction.

Section 38 states that a bankrupt can maintain an action for damages in respect of an injury to his person without the previous sanction of the insolvency director-general, while Section 54 provides that a bankrupt’s transactions are valid if entered in good faith.

The court also considered various provisions in the Financial Services Act 2013, particularly Section 5 and Schedule 9, which outlines the insurer’s duty to perform due diligence and ensure all necessary information is obtained before considering the insurance proposal form submitted by Chong.

The High Court upheld the sessions court’s ruling and dismissed Allianz’s appeal.