Malaysia First Agro Insurance

The Ministry of Agriculture and Food Security, in collaboration with Agrobank, has introduced the Agrofood Takaful Protection Scheme: Paddy Crop Takaful Scheme (STTP), marking Malaysia's first Shariah-compliant insurance for paddy farmers.

The initiative was first announced by Prime Minister Datuk Seri Anwar Ibrahim under the 2024 Budget, with an initial allocation of RM50 million to support farmers. The scheme is open to all registered individual farmers across Malaysia, with registration made easier by allowing the farmers to collect the takaful form at their nearest Area Farmers' Organisation office.

Agrobank said the initiative highlights the government's commitment to assisting farmers in mitigating natural disasters and reinforcing the nation's food supply chain through programmes introduced by the ministry and the bank.

Insurance Agent Is The Victim

Over the past few years, Americans have faced steadily increasing insurance costs. From auto to home and even your business, the premiums seem to be rising faster than the incomes.

Many consumers, frustrated with these hikes, often turn to their insurance agents for answers, or worse, place blame on them. However, it’s important to understand that insurance agents are not the cause of these rising costs. The reality is far more complex and the reasons behind these increases stem from a variety of factors that extend far beyond the control of your local insurance agent.

To understand why insurance premiums are increasing, look at the factors driving these costs. Insurance companies set their prices based on how risky they think it is to insure you or your assets. If the risk goes up, so does what you pay. Lately, a few things have been driving up these risks, which means higher costs for everyone.  

Increased Natural Disasters: It seems the frequency and severity of natural disasters have risen dramatically in recent years. Here in our state, many Kentuckians find it hard to forget our own recent disasters, the west Kentucky tornadoes of 2021 and the east Kentucky flooding of 2022. One year after the tornadoes, the Federal Emergency Management Agency (FEMA) estimated that close to $100 million in insurance payments had flowed into these communities, helping homeowners and businesses rebuild. To offset these costs, insurers increase premiums across the board, especially for home and property insurance.  

Litigation and Legal Costs: The United States has a reputation for being quick to sue. This has a direct impact on insurance premiums. Legal costs associated with defending against lawsuits are rising, particularly in auto and home insurance. When people win big settlements in court, insurance companies have to foot the bill and they do that by raising your premiums. The Insurance Information Institute estimates this “social inflation” rose by 14% in the 2010s. 

Economic Inflation: In addition to social inflation, economic inflation is another contributing factor to rising insurance premiums. As the cost of goods and services increases, so does the cost of repairs and replacements. For example, if the cost of building materials rises, it becomes more expensive to repair or rebuild homes after a disaster, leading to higher home insurance premiums. According to the National Association of Homebuilders, residential building costs have increased 38% since March 2021. Similarly, the rising cost of car parts and labor drives up auto insurance premiums. 

The misconception: Blaming the insurance agent 
Given the frustration that comes with rising costs, it’s understandable that consumers might look for someone to blame and often, the insurance agent becomes the target. However, it’s crucial to recognize that insurance agents are intermediaries between consumers and insurance companies. They do not set the rates; rather, they work within the parameters established by the insurers.  

Insurance agents are there to be your trusted advisor, to help you find the best coverage for your needs at the most affordable price. They can offer advice on how to manage your risks, suggest discounts or recommend policy adjustments that might reduce your premiums. However, they do not control the underlying factors that drive premium increases.   

What can consumers do? 
While the rising cost of insurance is frustrating, there are steps consumers can take to mitigate these increases:  

Partner with an independent insurance agent: By comparing quotes from multiple carriers, an independent agent may be able to find a more competitive rate among their various insurance company partners.  

Increase Your Deductible: By choosing a higher deductible, you can lower your monthly premium.  

Bundle Policies: Many insurers offer discounts if you bundle multiple policies, such as home and auto insurance. 

Take Advantage of Discounts: Ask your agent about any available discounts. Some companies offer them for safe driving, home security systems or even being a loyal customer. 

It’s easy to point fingers when costs rise, but it’s important to understand that the factors driving insurance premiums higher are often beyond anyone’s control, including your insurance agent. By recognizing the true causes and taking proactive steps, consumers can navigate these challenging market conditions more effectively. Your insurance agent is there to help, not hinder. Work with them to find solutions that best fit your needs and budget. 

Malaysia Insurance Industry Potential Growth

Malaysia’s life insurance market is set to exceed MYR77.3 billion (US$17.2 billion) in direct written premiums (DWP) by 2028, growing at a compound annual growth rate (CAGR) of 5.2% from 2024 to 2028. Life insurance sector is expected to expand by 5.9% in 2024, driven by stronger consumer spending linked to economic recovery and favorable regulatory changes focused on digitalization. 

Malaysian economy’s growth - The Malaysian economy grew 4.2% in the first quarter of 2024., up from 2.9% in the previous quarter, primarily due to higher private spending and increased investments. Malaysia’s economy is expected to maintain an average annual growth rate of 4.4% over the 2024-2026 period, providing further support to the life insurance sector.

Malaysian life insurance growth - Linked insurance products saw a 7.8% increase in premiums in 2023, while non-linked products grew by 4.4%. Rising interest rates and improved labor market conditions are driving demand for wealth accumulation products, which will support the growth of endowment insurance at an expected CAGR of 5.1% through 2028.

Regulatory reforms as a key factor for future growth. In July 2024, the Central Bank of Malaysia issued new guidelines aimed at fostering the digital transformation of insurers and takaful operators. These reforms are part of the Financial Sector Blueprint 2022-2026, which seeks to enhance inclusion, competition and operational efficiency through increased digitalization.

Endowment insurance

Is expected to make up 77.3% of life insurance premiums in 2024, remains the largest product line. 

Whole life insurance

The second-largest segment, is projected to account for 7.5% of premiums in 2024, with a growth rate of 2.3% for the year. This increase is driven in part by Malaysia’s aging population, which is expected to see the share of people aged 65 and above rise from 8.1% in 2023 to 8.7% by 2025.

Term life insurance

The third-largest segment, is forecast to represent 4.4% of DWP in 2024. Premiums for term life products increased by 5% in 2023, reflecting changing consumer spending patterns due to inflation.

To address affordability concerns, Malaysia’s government introduced the i-Lindung platform in 2022, offering low-cost life and critical illness insurance to Employees Provident Fund (EPF) members. An expansion of the platform, i-Lindung Phase 2, was launched in February 2024 to extend coverage beyond one year.

Malaysia’s life insurance penetration - Despite the expected growth, Malaysia’s life insurance penetration rate stood at 3.3% in 2023, lagging behind other Asian markets such as Taiwan (9.3%), Japan (6.3%), and Thailand (3.5%).

Malaysian motor insurance growth - In addition, Malaysia’s motor insurance market is projected to grow at a 7.5% CARG, reaching MYR14.2 billion ($3.1 billion) in premiums by 2028. Motor insurance is expected to make up over 45% of the general insurance sector by 2024, with growth driven by higher vehicle sales and rising premium rates.

Vietnam Insurance 2023 Tough Year

After a tough year in 2023, the business performance of life insurance companies hasn’t yet recovered. The companies are still struggling with economic difficulties and the consequences of last year’s confidence crisis. The financial reports for the second quarter of 2024 of many life insurance companies showed a marked fall in profits. Some companies even suffered losses, mainly down to their core business segments.

Prudential Vietnam Life Insurance Co - recently announced its 2024 semi-annual financial report, recording a pre-tax profit of 1.09 trillion dong or about US$44.2mil down 31.79% year-on-year (y-o-y), equivalent to a decrease of 509 billion dong.

The reason for the decline in profits is that Prudential’s original insurance premium revenue in the first half of the year only reached 11.14 billiondong, down 13.22% y-o-y.

AIA Vietnam Life Insurance Co - Meanwhile, a mid-year business performance report released recently by AIA Vietnam Life Insurance Co for 2024, showed that the company’s net insurance revenue hit 6.86 trillion dong while its pre-tax profit reached nearly 581 billion, down about 700 billion dong and nearly half of that compared with the same period last year, respectively. FWD Vietnam Life Insurance Co reported revenue of 1.96 trillion dong from its insurance business in the first six months of the year, down 22.5% compared with the same period last year. The company reported a net profit of 290 billion dong, down 70% compared with the same period in 2023.

Insurance Denied For Genetic Reasons

Life insurers and those offering income protection and permanent disability insurance will be banned from using genetic testing to refuse cover, or hike up charges, for a range of insurance products.

Genetic Tests - The federal government announced on Tuesday it would ban the practice that saw consumers discriminated against if they disclosed the results of genetic tests that predict their likelihood of an inherited disease.

It comes after consultation to address genetic discrimination in life insurance earlier this year. More than 1,000 submissions were received with 97 per cent supporting a total ban. The announcement covers all risk-rated insurance including life insurance, income protection and total and permanent disability insurance.

Australians are increasingly accessing genetic testing to identify their risk of genetic conditions, such as a BRCA breast cancer gene, but there were growing reports of resistance due to how it might affect life insurance eligibility.

Cover Denied For Genetic Reasons - The announcements has been welcomed by customers where many have genetic condition that affects connective tissue which hold organs and other structures of the body in place. Many conditions are normally diagnosed via a genetic test during childhood.

Several experts have been lobbying for laws to ban insurers from using genetic tests to discriminate since 2016. There is a significant concern amongst people around the fact that life insurers can use their genetic results to discriminate against them, so either to deny their cover or increase the cost of their premiums.

Canada had banned the practice since 2017 and the UK for more than two decades. Council of Australian Life Insurers said the industry also backed the change and had put in place an industry standard in 2019 to control how genetic tests are used.

The Financial Services Council (FSC), which previously oversaw the life insurance industry, introduced a self-regulated moratorium in 2019 to prevent genetic discrimination.

Under the guidelines, genetic testing results could not be collected by the insurer for policies up to $500,000. A partial moratorium only protected up to certain financial limits and were not legally binding.

Malaysia Introducing Co-payment Medical Insurance

Some expressed concern and warned Bank Negara Malaysia (BNM) that its new requirement of a co-payment option in health insurance could expose households to financial catastrophe.

Introducing Co-Payment - Deputy Finance Minister Lim Hui Ying told the Dewan Rakyat special chambers last July 1 that BNM would require insurance and takaful operators (ITOs) to begin providing a co-payment option for their medical and health insurance and takaful (MHIT) products by September this year.

Co-payments are additional out-of-pocket payments that insured patients have to pay when they get treatment of covered illnesses – on top of their regular premiums paid before they encounter illness.

According to BNM February 29 policy document on MHIT business, ITOs will be required by September 1 to have at least one individual medical product with co-payment features, with a minimum co-payment amount of no less than 5 per cent co-insurance and/ or RM500 deductible per policy or certificate year. This co-payment feature also applies to renewal of existing MHIT policies or certificates.

So, for example, if an insured patient receives an RM50,000 hospital bill, a 5 per cent co-payment means that the patient has to pay RM2,500 in cash out of pocket – even though they have been regularly paying monthly or annual premiums. What is noteworthy in BNM’s new policy is the absence of a cap on co-payments. 

It also encourages consumers to take a more active role in their consumption of health care services. This, in turn, will help to reduce fraudulent medical claims and contain medical cost inflation that has risen by 36.3 per cent cumulatively from 2020 to 2022. In the longer term, it aims to ensure that the cost of medical insurance and takaful remains affordable.

Beginning next year, ITOs are no longer permitted to design new medical reimbursement insurance or takaful products without the minimum co-payment feature.

Household out-of-pocket payments on health expenditures currently approaching 35 per cent, would and will jump.”

Impact On Middle Class - Neither BNM nor the Ministry of Finance (MOF) appear to have made public announcements on this major co-payment policy that will likely hit the middle class – set to be implemented in just two months – on the rise of medical insurance premiums.

Co-payments will not apply for emergency treatment (including in accident cases), outpatient treatment for follow-up treatments arising from critical illnesses such as for cancer or kidney dialysis, or treatment sought at a government health care facility.

Co-payment policy as aimed at incentivising “more responsible usage of health care services” to reduce costs on insurance providers, citing medical inflation and the “buffet table syndrome” as the main drivers of a rise in health insurance premiums.

“This action will also be able to reduce false claims and subsequently reduce overall costs, besides increasing the long-term sustainability of MHIT products. Based on the experience of several countries, MHIT products with co-payments have lower insurance premiums or takaful contributions compared to products without co-payment features,” said the DAP lawmaker.

The “buffet table syndrome” describes policyholders with zero co-payment coverage or full riders, who are unwell and sick availing themselves of medical treatments and medication in the belief that they should maximise their insurance policy coverage. This increases the average claims per insured and subsequently leads to higher insurance premiums.

Health Care Inflation - what was the real cause of Malaysia’s 12 per cent health care inflation rate that is approximately five to six times higher than the general inflation rate and is among the highest in the Asia-Pacific region.

Malaysia, like many upper middle income countries, is experiencing an increase in the demand for health care due to an increasing proportion of the population who are above the age of 60, more people living with three or more chronic illnesses, and a need for better and improved quality of care. More people are needing inpatient care.

The Galen Centre also pointed out that medical bills imposed by private hospitals continue to be unregulated.

Health Care Provider Overcharging - The difference in fees imposed by private hospitals for patients paying out-of-pocket and those utilizing an insurance policy, can be 100 per cent more expensive for those with a medical card. Insurers are forced to pay what has been charged.

The vast difference in bills are likely contributing to higher insurance premiums and costs, more than the ‘buffet table syndrome’. Over-consumption can definitely be cause for blame, but so can over-charging, resulting in patients and policyholders paying rapidly escalating fees and premiums over time.

Will co-payment address the problem of overcharging such as for the use of a wheelchair, a pillowcase, or three-ply masks? What are we doing about regulating these charges imposed by private medical facilities?”

Cancel Policy - It is expected people to cancel their health insurance policies with the introduction of co-payments and go to the public health care system instead, thus increasing demand on already overloaded government hospitals and health care clinics.

This would be a tragedy and reverse the gains made over the past decade in insurance coverage. For the moment, this policy is not retrospectively applicable to those who have existing policies, but this could change. 

Rising Premium From Extreme Climate Change

Late winter and early spring has been marked by wild weather sweeping large parts of Australia, damaging homes and businesses and causing power outages. Such unpredictable weather is also occurring around the world and driving huge rises in premiums to the point where the future of insurance is in doubt.

In 2022, floods, hurricanes, hailstorms, winter storms and droughts amounted to more than A$149 billion in insured losses globally with losses growing five years prior. The full impact and cost of the latest events in Australia will not be known for some time, but it can be expected to be significant.

Extreme weather
As one of the world’s most climate exposed nations, Australia is at the forefront of extreme weather effects on insurance premiums. In the “great deluge” of 2022, flooding in Queensland and New South Wales amounted to A$5.56  billion in insured losses from 236,000 individual claims. 

As extreme weather generates ever-greater losses, insurers are reluctant to provide cover in higher risk locations. Increasingly they are not offering policies, making insurance unavailable, or raising premiums to unaffordable levels. One insurer reported between 2020 and 2023, their average household premium rose by 56%. And the situation is worsening.
Insurance stress

Rising Premium

In 2022, 10% of Australian households faced extreme insurance stress, defined as paying more than 4 weeks gross household income for a policy.

By 2024, this rose to 15% of Australian households, with the most stressed households facing premiums of up to 9.6 weeks, or 18% of their gross income.
Households facing insurance stress are paying more than a month in gross income on premiums.

This measure of insurance stress is based on gross household income. Yet premiums are paid from net income after tax. Many households simply cannot afford insurance with the Insurance Council of Australia estimating 23% of households are uninsured, 

In June 2024, the Australian Bureau of Statistics noted insurance is one of the main contributors to rising living costs across all household types. Unsurprisingly, when needing to pay energy bills, put food on the table, and fuel in the car, many Australians have little choice but to let insurance lapse or buy less insurance than they need to recover after a weather event.

Why we can’t rely on insurance
Even for those who are insured, widespread loss from extreme weather means they cannot necessarily rely on their insurance claims to bounce back from disaster.

Large numbers of claims can result in lengthy settlements, as insurer resources are stretched by the complexity of assessing damage, and the increased demand on trades and services, including temporary accommodation.

Excess demand following widespread loss has effects beyond emotionally charged claims processes, as insurers are using cash settlements to resolve claims quickly.

Cash settlements can be offered when the homeowner is underinsured and the policy will not cover full repairs, when there is a lack of trades and services to complete the work, or when homeowners are desperate to get some compensation to help them move on from disaster.

However, there are serious financial implications for homeowners in accepting cash. Recent research reveals cash settlements are often under-quoted and homeowners lack appropriate knowledge and experience to accurately assess the offer.

As a result, this can leave homeowners without enough money to fix their property, potentially leaving them with an unlivable home and large debt.

Economic impacts
A lack of affordable insurance also has significant negative consequences for Australia’s economy. Home insurance is usually required to take out a mortgage. However, about 5% of Australian households with a mortgage are experiencing insurance stress. 

Such insurance-stressed homeowners are in a precarious financial situation following extreme weather losses, as they have insufficient funds to repair their home and/or repay their mortgage. Potential homeowners are also affected, as they may be unable to get a mortgage in higher-risk locations, as banks anticipate insurance will be unavailable or unaffordable.

With as many as 1 in25 homes across Australia expected to be uninsurable by 2030 and one in seven homes in the most at-risk localities, this looming mortgage crisis will have wide-reaching implications beyond home ownership. Mortgages are critical for business lending, to support the rental market and ensure viable communities.

A bleak forecast
The compounding effects of insurance stress, extreme weather, and pressure on banks to take account of climate exposures is likely to limit lending to small business, constrain housing supply, and affect jobs, especially in higher-risk locations.

This complex situation is already evident across cyclone-exposed northern Australia, where the impact of rapidly rising premiums, or a lack of insurance availability, means small business owners, such as tourism and hospitality operators, struggle to meet licensing and regulatory requirements. 

Indonesia Dwindling Middle Class

According to the Indonesian Statistics Bureau (BPS), there used to be 57.33 million middle-class Indonesians in 2019, representing 21.4 per cent of that year’s 267 million population. The latest BPS data, which was issued on Aug 28, however showed that the number of people categorised as middle-class has dropped to 47.85 million in 2024, or 17.1 per cent of the country’s current population of 289 million.

What is Middle Class - The BPS defines the middle class as those having a per capita expenditure of between 2 million and 9.9 million rupiah per month, or 3.5 to 17 times the World Bank’s poverty line.

The majority of those who used to be in the middle-class range have since been downgraded to the aspiring middle class. According to the statistics bureau, the number of aspiring middle class - those who earn 1.5 to 3.5 times the poverty line or between 874,398 and 2.04 million rupiah a month - rose from 128.85 million in 2019 to 137.5 million this year. They form 49.22 per cent of Indonesia’s population.

The dwindling of the middle class has raised red flags . Their declining number and purchasing power could trigger an economic slump as demand for goods decreases.

In 2018, middle-class consumption accounted for 41.9 per cent of total household consumption in Indonesia. By 2023, this figure had dropped sharply to 36.8 per cent, aligning with an overall slowdown in household consumption, according to data from the Institute for Economic and Community Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI).

Wealth Inequality - And as the middle class shrinks, the country is experiencing an annual gross domestic product increase of around 5%, which also paints a picture of widening wealth inequality in Indonesia.

Some experts even warned that Indonesia could suffer the same fate as Chile, another country which saw steady economic growth but a declining middle-class population. Social inequality and price hikes paved the way to years of protests and unrest in the South American country between 2019 and 2022.

Gojek Gone In Vietnam

Indonesian ride-hailing and delivery company Gojek has announced it will stop operating in Vietnam starting Sept 16 after 6 years in the market. Gojek said the decision, made by its parent company GoTo after assessing its market presence in Vietnam, aims to strengthen business operations and aligns with the company’s long-term growth strategy.

Gojek was founded in 2010 with a focus on delivery and ride-hailing services, and its app was launched in January 2015 in Indonesia. The firm has grown to become Indonesia’s leading on-demand service platform.

Go Vietnam - Gojek entered Vietnam in 2018 as GoViet, which merged with the Gojek brand in 2020. It offers two-wheel (GoRide) and car (GoCar) rides, food delivery (GoFood) and parcel delivery (GoSend), and operates in Ho Chi Minh City, Hanoi and Binh Duong and Dong Nai provinces.

Gojek’s announcement to exit Vietnam also came near to a year after it expanded its business in the country. In October 2023 - Gojek has just announced its expansion to Binh Duong (Di An, Thuan An, Thu Dau Mot) and Dong Nai (Bien Hoa) provinces, neighboring cities of Ho Chi Minh City.

Go Thailand - Gojek has previously pulled out of Thailand in 2021 and is focusing on its home market and Singapore. According to earlier report, Malaysian budget carrier AirAsia Group announced then it will buy Gojek’s Thailand business in a stock swap, giving Gojek a 4.76 percent stake in the airline’s lifestyle platform.

AirAsia will acquire Gojek’s business in return for $50 million worth of shares in AirAsia SuperApp, valuing the division at around $1 billion.

In Indonesia, Gojek’s gross transaction value increased by 18 percent year-on-year in the second quarter of this year while its number of completed orders rose 24 percent to reach record levels. It also saw a 3 percentage point increase in market share in Singapore.

Life Insurance Traditional Selling Method Is Unproductive

Why do all those new insurance agents quit? New Agents quit because the only training and coaching they get from their company is how they can make a quick insurance sale! New agents quit because the insurer never trained them on the keys to success in selling insurance!

Somewhere around 80% of new insurance agents appointed by insurers fail and quit within their first 12 months of getting their license. And then within 5 years, 80% of the remaining new insurance agents will struggle and quit! That is a 90% failure rate for new insurance agents.

Poor Training - Insurers normally train insurance agents on all the products they want them to sell. Then the insurers (and agency leaders) will train the insurance agent to ask a few questions and learn a sales presentation that just sells a product. Insurers and agency leaders will give them an appointment script. And tells them to set an appointment with the leads they buy or the people they know! And within a year most new agents are frustrated, broke, and have no option but to quit selling insurance.

Frustrated And Quitting Sales - The first reason new insurance agents quit is they only set a few sales appointments with the leads they buy and/or the people they know. And they will close just a few insurance sales. Most insurance sales will be around $600 in commissions. Eventually, they will run out of the people they know. And they will have to buy more and more insurance sales leads. Lead costs alone per week would be around $500! Many new agents quit selling insurance because they are broke and can’t afford to buy more sales leads.

Hard Work - The second reason new insurance agents quit is initially they will need to set 10 or more sales appointments to close 3 or more sales per week. So to set 10 or more insurance sales appointments, they will need to talk to 100 or more people. This means they will make 200 or more phone dials to talk to 100 people. And that means they will spend a lot of time and money every week to make just 3 insurance sales of $600. Most new agents quit selling insurance because they have to work too hard for the money they make.

Lapsation - new insurance agents quit is that they will end up with a lot of not-taken and lapsed policies. Because they never learn to sell insurance the right way. This will mean they have to pay back a lot of their insurance commissions. These new agents are forced to quit because their lapses are more than their current insurance commissions!

Between the negativity of calling 200 people to set 10 appointments and then people lapsing their insurance policies. Plus, with the expense of the insurance sales leads! Most new insurance agents get frustrated and burned out within a year or so… and will quit the business.

MCIS Decline Claim On Non-disclosure & Material Misrepresentation

The High Court here has dismissed a suit brought by the estate of a man against an insurance company for breach of contract to pay close to RM2 million to the beneficiaries of three policies.

Material Misrepresentation - The Court determine that MCIS Insurance Bhd had established, on a balance of probabilities, that the deceased man, D Jachiswaran, materially misrepresented and failed to disclose crucial information regarding his medical history, occupation and income details in his insurance proposal forms. The Court also ordered R Siva Prakash, the executor and trustee of Jachiswaran’s estate, to pay MCIS RM40,000 in costs.

The Court determined that the non-disclosures and misrepresentations by the deceased were deliberate and reckless, entitling the insurance company to nullify the policies under Paragraph 15 of Schedule 9 of the Financial Services Act 2003.

The defendant fulfilled its statutory duties by asking clear questions and adequately informing the deceased of his disclosure obligations. The Court said based on the expert evidence, the signatures on the proposal form for one of the three policies, P4 (for RM1.5 million), were forged, rendering the policy void ab initio (from the beginning). 

While the defendant’s investigation process had some shortcomings, these were not significant enough to invalidate its decision to repudiate the policies. The Court said the insurance company’s overall conduct in handling the claims was reasonable and justified and did not amount to bad faith. The defendant did not engage in unconscionable conduct in repudiating the policies as its actions were based on established principles of insurance law,

The plaintiff (executor and trustee) had failed to rebut these findings with credible evidence.
The suit was filed three years ago following the insurance company’s refusal to pay out three life policies.

The issue before the Court was whether the deceased failed to disclose material facts about his health and income in the policy proposal forms, enabling the defendant to nullify the policies. Secondly, the defendant alleged that the signatures on one of the proposal forms were forged.

3 Policies - According to the facts of the case, the deceased took out three policies with the insurance company between 2016 and 2019. The deceased passed away on March 30, 2020, due to multiple injuries sustained in a road traffic accident. On Aug 8, the same year, the plaintiff submitted a claim to the defendant for all the policies.

Two were life assurance policies with payer benefit riders on the lives of the deceased’s two children with a total payable amount of RM405,818. Jachiswaran had bought a RM1.5 million life insurance policy for himself.

On April 21, 2021, the defendant repudiated the claims on the policies and treated them as void. In the suit, the plaintiff had sought to enforce the policies for the children and for RM1.5 million to be paid out.

DBS Wealth Planning Manager Scam Clients

A man has been charged after he allegedly duped four people into transferring $348,000 in total to his personal bank accounts, and tried to cheat two others of $240,000. Pang Yu Heng, 27, who was a wealth planning manager with DBS Bank at the time of the alleged offences, was charged on Sept 5 with four counts of cheating and two counts of attempted cheating.

The Singaporean is accused of cheating each of the four victims of between $24,000 and $190,000. DBS claimed that his employment was terminated in June 2023. DBS have also reached out to our customers who’ve been impacted to provide our support.

Pang allegedly promoted fictitious fixed deposit products to his customers, promising high interest rates. In June 2023, officers received a report from a local bank about his alleged offences. He is accused of cheating his first victim of $74,000 over two occasions between early March and April 11, 2022. He allegedly used a similar method to cheat three others from around March 15, 2022, to March 1, 2023. In addition, he is said to have tried but failed to cheat two people of another $240,000 in total in January and March 2023.

For each count of cheating, an offender can be jailed for up to 10 years and fined.

Singapore Declining Number Of Insurance Agent

Deputy Prime Minister and Minister for Finance (Singapore), Lawrence Wong, disclosed a notable decline in the number of insurance agents within the labour force over the past three years. According to the reply provided during the Parliament Sitting on 2 April, the figures indicated a consistent downward trend, according to the Monetary Authority of Singapore (MAS)

In 2021, the total number of life and composite insurance agents stood at 15,205, which decreased to 14,546 in 2022, and further down to 13,934 in 2023. Similarly, the count for general insurance agents also witnessed a decline from 4,105 in 2021 to 3,777 in 2023.

Age, gender, and nationality breakdowns were furnished specifically for life and composite insurance agents. It was noted that the majority of these agents were below the age of 40.
Furthermore, there was an equitable distribution in terms of gender, with approximately an equal number of male and female agents.

Notably, around 90% of these agents were Singapore citizens, whilst the remainder primarily consisted of permanent residents.

Monetary Authority of Singapore (MAS) and the General Insurance Association of Singapore (GIA) do not differentiate between full-time or part-time employment status of insurance agents. Furthermore, they do not collect information regarding the academic qualifications of agents, although it was emphasized that all agents are required to meet minimum educational qualification standards.

Shortage Of Life Insurance Agent

According to a US Chamber of Commerce report, the number of life insurance agents aged 55 and older has increased 74% in the past 10 years, while less than 25% of the industry is under age 35. The Bureau of Labor and Statistics estimates that over the next 15 years, 400,000 positions in the industry will go unfilled as those older workers retire with nobody to replace them.

The talent shortage - is rapidly becoming one of the most pertinent emerging risks in the industry, leaving companies across the board struggling to transfer their seasoned agent's expertise to younger agents while devising strategies to attract and retain the next generation of underwriters, brokers and claims professionals.

“While climate change, cyber risks, AI and other emerging and ongoing risks are undoubtedly more critical, the talent issue underpins everything. If we don’t attract and retain the best talent, I don’t know how we can solve these massive challenges as an industry.

What’s Causing the Shortage - the life insurance industry has not done a great job of representing itself as purpose-driven. Younger generations want to feel that their careers are meaningful and impactful, and the industry has to paint a picture of a how a career in insurance fits those criteria.

Insurers excel at selling the value of their products, but fall short in selling the value of our industry itself. But now, people entering the workforce want to be convinced of what they’ll be a part of. This is where we need to improve — in telling our story better, conveying what we do and why it’s important. 

The industry has also only become more purposeful and targeted in its recruitment efforts within the past five to 10 years. Attracting new talent for years to come will require more proactive and intentional outreach.

What Can the Industry Do Better - Younger workers also want to work for companies that offer flexibility and work-life balance, that aren’t afraid to adopt new technology, and that allow employees to explore their interests, develop their knowledge and apply their expertise in different ways. In other words, they want to see career paths that don’t pigeonhole them into one specific role.

McGrath said the industry can deliver on all these wants. Here’s what companies can do to demonstrate their value and strengthen their recruitment efforts.

1) Collaborate
When underwriters, brokers and claims people work together to educate younger people about insurance careers, they can highlight just how interconnected the industry is and show how many opportunities exist to explore personal interests and leverage expertise in different ways. Working together not only highlights different opportunities in the field, but also lightens the load for individual companies in their recruitment initiatives.

2) Start Early
Identifying and attracting talent for the long haul requires going beyond college graduate programs. It starts with educating high schoolers about the benefits of an insurance career.
An exciting development is the rise of apprenticeship programs. Apprenticeships take it a step further by engaging with high schools to bring in young talent and generate excitement about insurance careers, regardless of whether they pursue higher education. Companies also need to be consistent with outreach and education initiatives year-round, seeking out job fairs and career days outside of Insurance Careers Month in February.

3) Highlight Technology
With the advent of AI and machine learning, the insurance industry offers more and more potential career paths focusing on data management and technology development and implementation. By demonstrating how technology is embedded in different processes, companies can shed the long-standing image that insurance is slow-moving when it comes to modernization.

4) Emphasize Relationships
Ask any insurance professional and they’ll tell you that insurance is a people business. Relationships matter. Communication skills are critical. Jobs in insurance are about more than data collecting, number crunching and contract wording. Excelling in this industry is centered around understanding a client’s needs and working collaboratively to build solutions.

5) Identify the Purpose
Again, it all comes down to showing younger people what good they help to achieve by working in insurance. The whole purpose of the industry is to build resilience — to help individuals, businesses and indeed whole cities recover and move on from disasters big and small. Insurance enables organizations to take risks and therefore fosters growth. Without insurance, economies couldn’t function optimally.

A career in the insurance industry is truly purpose-led. We have the ability to help people at their most vulnerable, which is incredibly meaningful. No matter what role in the industry someone chooses to pursue, they contribute to this overall mission.

Consolidating Indonesia Insurance Industry

A third of the total number of insurance companies in Indonesia (excluding Shariah business units or windows) have a capital of less than IDR250bn ($16m). They are unlikely to meet new minimum capital requirements by the deadline of 2026, and so will likely be involved in M&As.

Financial Services Authority (OJK) accordingly is incentivising more M&As for existing and new companies that want to enter the Indonesian market since depending solely on organic growth to meet the new requirements seems impossible.

This action is in the right direction because it is better to have bigger companies competing against each other than taking on market share of the smaller players. Having few large players is also easier to regulate.

In 2023, the OJK issued a regulation imposing higher minimum capital requirements to incentivise smaller players to either consolidate or be sold to larger companies to create better efficiency and scalability.

A struggling insurance industry - Currently, there are 148 insurance companies (conventional and Shariah) comprising of 58 life insurers, 78 general insurers, eight reinsurance, and four non-commercial/social insurers (i.e. BPJS).

Despite the large number of insurers, insurance penetration in Indonesia has decreased steadily from 3.03% in 2019 to 2.64% in 2023. A number of factors caused this including the economic slowdown caused by the COVID-19 pandemic, poor investment governance, and accepting riskier business.

Minimum Capital Requirement For Insurance Companies
Type	Current (since 2016)	First stage by 2026	Second stage by 2028
Figures in IDR bn			KPPE 1	KPPE 2
Conventional insurance	150	250	500	1,000
Conventional reinsurance	300	500	1,000	2,000
Takaful	100	100	200	500
Retakaful	175	200	400	1,000

There is still much upside potential for the industry in the long-term, but in order to unlock value, M&A or consolidation is needed to scale up and grow efficiently.

ATIC New York Taxi Insurer Insolvent

The headquarters of American Transit Insurance Co. in Freeport, a few miles into Nassau County. The 52-year-old, family-owned firm is vital to how New Yorkers zip around the city. American Transit, also known as ATIC, insures roughly 60% of New York City’s more than 117,000 commercial taxis, livery cabs, black cars and rideshare vehicles.

It’s insolvent - ATIC has for decades been the dominant player in New York City’s commercial car insurance market, the largest in the country, offering cabbies premiums far lower than other insurers. In the second quarter, it posted more than $700 million in net losses.

The losses follow years of warnings from industry analysts, and disagreements between ATIC and its third party actuary. The company’s reserves have been considered deficient for decades and the problem has come to a head as the company wrestles with larger claim sizes driven by bigger settlements as well as jury and arbitration awards. A potential ATIC failure would mean tens of thousands of taxi drivers without insurance, throwing the city’s complex transit ecosystem into turmoil.

The insurer’s losses grew so large that they have crossed a threshold known as a “mandatory control level event". 

Too Big to Fail - There is a perception that they are too big to fail; There would be a large void in the ability to get a taxi or an Uber or a Lyft or a limo in New York as all of these vehicles would suddenly be without insurance.”

The only other insurance carriers that would be able to pick them up currently would possibly struggle with the volume of business. In that case, “every taxi driver or limo driver is going to have a significant increase in their insurance premium” as rates adjust to reflect real risk. That could upend an industry already battered by headwinds including increased competition and plunging medallion values.

The premiums that they were charging were not commensurate with the risk they were taking on. It raises questions over ATIC’s ability to pay claims. Uber Technologies Inc. sued ATIC in federal court in February, accusing the insurer of “a pattern and practice of failing to adhere to reasonable claims-handling practices and failing to reasonably resolve claims,” resulting in 23 lawsuits brought against Uber and its drivers over crashes involving bodily injuries. That left the ride-share giant to pay “substantial amounts” to defend itself.

In 2021, a actuarial consultant found the company was roughly $500 million short of the money considered necessary to cover its unpaid losses and loss-adjustment expenses. That kind of determination is exceptionally rare. ATIC’s responded to S&P that he didn’t agree with Huggins’ opinion because of the “unique nature” of the New York market.

If corrective action is not successfully implemented by the company and further adverse development continues, the possibility exists the company could be placed in some form of receivership or liquidation.

Multi-level Selling Life Insurance

The case of a life insurance agent in Alberta who was fined for selling a policy on an insured in intensive care is notable for both its paltry penalty and the gaps it has revealed in training and compliance.

The Alberta Insurance Council fined a life agent $500 for misrepresentation after she submitted an application for a life insurance policy in 2022, when the insured was in intensive care with a brain injury following cardiac arrest. The insured died about a week and a half later.

No Medical Exam Policy - The whole life policy was a “simplified issue product,” which doesn’t require medical testing and is an option for people with critical health conditions.

The agent met with the prospective policyholder — who was also the would-be beneficiary — via Zoom. (A marketing specialist had generated the sales lead through social media.) The policyholder was an in-law of the insured, and the life agent wrongly assumed someone in the background was the insured. The policyholder told the life agent the insured didn’t speak English, but the policyholder would translate questions and answer on the insured’s behalf.

According to the decision, the agent was aware the insured had diabetes but on the application failed to accurately respond to questions about the diabetes, as well as the insured’s heart failure and hospitalization.

In investigating the death claim, policy underwriter discovered the insured had been hospitalized several times since 2017 because of congestive heart failure and also had chronic kidney disease.

Agent - The agent failed, in her role as an insurance agent, to ensure that the insured understood the questions on the insurance application and that the answers being provided by the policyholder were accurate to the responses provided by the insured, as there was a language barrier present between the agent and the insured.  The agent did not take appropriate steps to verify the identity of the individual present with the policyholder during the … Zoom meeting.

While the penalty for the single offence could have been up to $5,000, the council decided on $500 “[g]iven the evidence that the agent has no previous discipline, fully engaged with the AIC, acknowledged guilt, was genuinely remorseful, took voluntarily active steps including undertaking relevant continuing education courses, and given the exceptional circumstances in this case.”

Training or Lack of It - If there was no responsibility on the insurance intermediary to ensure accuracy of information, then the insurer would presumably be assuming risk on which it had no basis of information, as is the case here. Therefore, it is not unreasonable to expect a high standard of due diligence to be practised by insurance intermediaries when soliciting and finalizing insurance documents.”

The Financial Services Regulatory Authority of Ontario (FSRA) said last year that it took enforcement action against dozens of life agents contracted with WFG and two other MGAs following a review the regulator conducted from May 2022 to April 2023. The review looked at firms that tie compensation to recruitment, creating the potential to focus on recruitment to a greater extent than agent suitability and customer needs analysis.

Among other things, the report found gaps in agent training and supervision, and a failure to follow best practices. Of 46 WFG life agents examined by FSRA, 39 (85%) were cited for best practices issues.

In FSRA’s review of the multi-level-marketing firms, a 2021 questionnaire of the 46 WFG life agents found that 19 (41%) placed business with ivari (56% cited iA Insurance, 46% cited Equitable Life Insurance Company of Canada, and 11% cited Manulife Assurance Company of Canada).

Understanding Contestability Period

The life insurance contestability period refers to the time after policy approval when an insurer can still investigate claims. In some cases, this may result in claim denial, forcing Policyholders to seek legal recourse if they wish to attain coverage. In short, this contestability period is a window of opportunity for insurers to determine if any information given on the application was false or incomplete.

What Is the Life Insurance Contestability Period
The life insurance contestability period typically lasts two years from the date of policy approval. During this time, an insurer has the right to investigate any aspect of a policyholder’s health that could have been misrepresented on their application. If it finds that information was intentionally withheld or falsified by the applicant, it can deny coverage or void the contract entirely.

The purpose of the life insurance contestability period is twofold:It serves as a deterrent against fraud by allowing insurers to thoroughly vet applications. It helps insurers spot any misrepresentation and helps control the cost of insurance due to misrepresented claims.The contestability period exists on most types of life insurance policies, including term life and permanent life insurance policies.

Why Is the Contestability Period Important
The life insurance contestability period is an important part of the process as it allows the insurance company to investigate a beneficiary’s claim and verify its accuracy. This guarantees that the policyholder will receive a fair payout if their claim is accepted, and prevents fraudulent claims from being paid out. This also helps to keep premiums affordable for policyholders.

Additionally, the contestability period safeguards the integrity of the insurance company and ensures that it is not taken advantage of by claimants. By giving the insurer time to investigate all aspects of a claim, it can ensure that only legitimate claims will be paid out. Ultimately, this helps make sure that policies remain affordable for everyone involved.
What Happens If You Are Caught Lying on a Life Insurance Application?

If you are caught lying on a life insurance application, the consequences can be severe.

Depending on the specific details of the case, your policy could be canceled. Furthermore, insurance companies may deny future coverage for years and even initiate legal action against you if you have been dishonest about your information. If convicted of insurance fraud, you could face hefty fines and jail time in some cases. It is important to remember that any dishonest behavior in relation to a life insurance application can lead to serious repercussions that could last for years.

Common examples of dishonesty occur during the medical exam process where applicants may not share the entire truth. Or, they purposely apply for no-exam life insurance to try and hide a medical condition. If the insurer finds medical records that contradict the original information on an application, it may result in the denial of the death benefit to the beneficiary.

Misconceptions About the Contestability Period
Many people assume that the contestability period is short and it may be hard for the insurance provider to challenge them. However, the truth is that the contestability period lasts two years from the date that the policy was issued. During this time, an insurer can challenge any claims made by the policyholder if they deem them to be incorrect or invalid. On the flip side, policyholders can request a review of their policy in order to ensure that they are getting the coverage amount they need and deserve.

Another misconception about the contestability period is if the insurance company cannot find something that you didn’t disclose, there is no more recourse for the insurance company. While this is not quite as common, it does happen. Here is an example: An insured stated on the application they were a non-smoker. Twenty years later, the insured died due to lung cancer. When the insurance company investigated the claim, it found that the person was smoking before and during their application for life insurance. The result was a reduction in the claim. The insurance company essentially went back 20 years and charged the appropriate smoker rating plus interest to the policy which substantially reduced the death benefit the beneficiaries received. This is an example of material misrepresentation and caused a change that affected the insured’s loved ones in a meaningful way.

One final example of a misconception about the contestability period is that agents can manipulate information to get the client the best deal. The insurance agent has a contract with the insurance company to represent its products to you, so they have an obligation to tell the truth.

How To Navigate the Contestability Period Successfully
The key to navigating the contestability period successfully depends on providing accurate information and disclosing all relevant information during the application process. This includes providing detailed answers about any pre-existing medical history or lifestyle factors which could affect your risk level, such as smoking cigarettes or participating in extreme sports or activities like skydiving. It is also important to make sure that any additional paperwork requested by the insurer is completed fully and returned promptly so that their investigation process can continue without delay.

Contestability Period vs. Incontestability Clause
The contestability period and the incontestability clause are two important features of a life insurance policy. The contestability period is typically two years from the date of application, during which time the insurance company has the right to investigate any information on the application that may be deemed inaccurate or fraudulent. If any inaccuracies or fraud are discovered, it can deny coverage or rescind the policy.

An incontestable clause states that after a policy has been in force for a certain amount of time (usually two years), it cannot be challenged by an insurer on any grounds unless there is definite proof of fraud at that time. Once an insurance policy becomes incontestable, even if a material misrepresentation was made when applying for coverage, it cannot be challenged.

Not every life insurance policy has an incontestability clause that removes a challenge to a claim, in whole or in part, if fraud is discovered.

Suicide Clause and Contestability Periods
The suicide clause typically states that if an insured individual takes their own life within a certain period of time after signing up for the policy, then the beneficiaries will not receive any benefits from the policy. This clause is usually in place to prevent fraud as it prevents anyone from taking out a life insurance policy solely to benefit their beneficiaries in the event of suicide.

This clause normally has a two-year window and overlaps with the contestability period, during which insurers can investigate any misrepresentations or inaccuracies on a policyholder’s application. This means that even if all relevant information was accurately disclosed at the time of application, if an insured party commits suicide within this two-year period, then the insurer can deny the claim. If a suicide occurs outside of this timeframe, it will be treated like any other cause of death.

The Bottom Line
Understanding the two-year contestability period is essential for anyone looking into obtaining life insurance coverage. It is important for applicants to disclose all relevant medical information, as well as facts about their lifestyle, accurately and honestly to avoid potential claim denials down the road during this two-year window after policy approval.

6,000 Motorcyclists Accidental Death A Year

Malaysia - we lose more lives from accidents road accidents compared to Covid-19. Malaysia is among the Southeast Asian countries facing this issue, especially involving motorcycle riders. Although the death rate per 100,000 people came down from 27% in in year 2000 to 22.5% in 2019, it’s still among the highest in the world. Motorcycle riders and their pillions made up 65% of road accident deaths last year (2023)

There are over 6,000 road accident deaths involving motorcyclists every year, and the burial space required for that is almost the size of six football fields.