New Distribution Channel For Insurance

Insurance agents in Florida and beyond are finding that some of their toughest competition now seems to be coming from firms that aren’t really insurance agencies at all – at least not in the historical sense of the word.

Payroll and staffing firms - particularly those involved in the recently announced merger of Paychex and Paycor, two of the largest payroll companies in the United States. That merger followed the 2024 acquisition of WorkForce Software by Automatic Data Processing, which is ranked as one of the largest payroll and employee management firms in the world.

While signing up businesses to supply workers or to manage their employee pay, taxes and benefits, the firms also often enroll the employers in workers’ compensation and other insurance coverage.

Through the years, many insurance agencies have partnered with payroll companies to provide commercial insurance for employers. With the merger, Paychex seems to be pushing a growth plan – marketing insurance and “one-stop shopping” to more and more businesses.

5,000 new customer per month - The association has polled insurance carriers that write business with Florida agents and with payroll firms. The data suggest payroll companies are adding as many as 5,000 insurance accounts per month. That’s 5,000 clients that are either having their agent of record changed or are purchasing workers’ comp through their in-house insurance agency, meaning retail insurance agents are losing 5,000 accounts.

Rotten eFishery

Investigators hired by the board of eFishery have determined the Indonesian startup is in far worse shape than they previously thought, and that investors are likely to get back less than 10 cents for every dollar they invested. 

Substantial Losses - The company, which deploys feeders to fish and shrimp farmers in Indonesia, incurred several hundred million dollars in losses between 2018 and 2024 and misrepresented its financial figures for years.

The fallen startup, whose financial backers include SoftBank Group and Singapore’s Temasek Holdings, had been a star of Indonesia’s startup scene. eFishery was valued at US$1.4 billion in 2023 after it raised US$200 million from Abu Dhabi’s 42XFund and some of its earlier investors.

Poor Management - In all, global investors ploughed around US$315 million into eFishery’s preferred shares over five funding rounds. In late 2024, the company was rocked by allegations of misconduct and inflated sales and profits, which led to the dismissal of its co-founders Gibran Huzaifah and Chrisna Aditya.

It is estimated that eFishery had around US$50 million in cash as of around mid-February, and recommended that much of the business be wound down. That’s bad news for preference shareholders, all of whom would be paid back on an equal, or pari passu basis in the event of a liquidation. The investors could get back 9.5 cents on the dollar under an “optimistic scenario,” and just 8.3 cents on the dollar under a “conservative scenario, according to the presentation. That would mean Abu Dhabi’s G42, which invested US$100 million in the April 2023 round, may get just US$8.3 million back less than two years later.

eFishery business revolved around installing AI-driven smart fish feeders, sensors and automated supply chains that connected farmers to buyers via smartphone apps. It also helped farmers obtain financing from peer-to-peer lenders and financial institutions to pay for their feed and operational costs.

Bad Debts - The company had claimed to have more than 400,000 fish feeders deployed, and investigators initially estimated the number was closer to 24,000. The current estimate is just 6,300, of which only 600 are sending back data.

The investigators also found that there was a high default rate on the financing arrangements, and that eFishery bears all losses when farmers fail to repay their loans.In theory, the proceeds from the harvest or cash collected from farmers should be repaid back to the lenders. In practice, however, eFishery faced significant challenges when it comes to collection from borrowers.

Hampering the debt collection process were the huge distances and fragmented nature of Indonesia’s developing economy, where almost 10 per cent of the population lives below the poverty line. About 76 per cent of eFishery’s US$68 million in accounts receivable were deemed as bad debt more than 60 days overdue, with the company ultimately liable for the bulk of loans it facilitated with banks.

Substantial costs would need to be incurred to realize or recover these outstanding amounts from borrowers who are scattered all across the country. The company’s fish and shrimp businesses were operating on thin margins and severely loss making. Key apps were not connected to eFishery’s accounting systems, and many farmers were manually matched with buyers.

No Magic Apps - Much of the advanced technology that the firm touted did not work as claimed. None of eFishery’s PondTag sensors that were supposed to help remotely judge water quality and automate fish and shrimp feeders had been deployed. The limited data collection meant fish feed predictions were wrong almost half the time.

In essence, eFishery was “operating like a traditional trading business without technology. This explain the company’s large workforce of almost 2,600 employees at its peak in early 2024. Following mass job cuts since the start of this year, the company has roughly 200 staffers.

Manulife Advances In Asia

Manulife’s core earnings in Asia rose 27 percent year-on-year to $1.9 billion in 2024, according to the insurer’s financial results. This included annualized premium equivalent sales growth of 36 percent to $4.4 billion and an increase of 35 percent in new business value to $1.6 billion. New business contractual service margin was also up 38 percent to $1.6 billion.

Globally, Manulife posted $5.4 billion of net income attributable to shareholders in 2024, up 5 percent.

Some of the regional developments highlighted by the insurer this year included the expansion of Manulife Pro to Indonesia, Japan and Hong Kong. Manulife Pro is the firm's proprietary proposition for top-tier agents that includes differentiated resources and tools, such as dedicated underwriting support and enhanced customer engagement services with access to customer leads.

The insurer also launched two new products that cater to the protection, legacy planning and wealth management needs of high net worth customers. On technology, it launched a generative artificial intelligence sales tool in Singapore and Japan that enables agents to automatically create personalized engagement strategies.

Vietnam Life Insurance Slump

Vietnam’s life insurance market is projected to shrink for the third consecutive year in 2025, with gross written premiums (GWP) expected to decline by 1.3% to VND146.1 trillion (US$6 billion).

This follows contractions of 12% in 2023 and an estimated 5.7% in 2024, primarily due to regulatory issues in bancassurance and broader economic factors.

Despite the near-term decline, the sector is forecast to return to growth in 2026, supported by demographic trends, increased household income, and policy measures aimed at restoring consumer confidence.

Regulatory challenges and consumer confidence - Concerns over sales practices in bancassurance, which accounts for a significant portion of life insurance distribution in Vietnam, have contributed to declining consumer trust. Mis-selling practices, unclear policy terms, and the perception that some life insurance products were tied to bank loans have led to consumer scepticism.

Irregularities in life insurance distribution have led to a decline in consumer confidence, resulting in life insurance market contraction during 2023-24. This decline in trust has resulted in an increase in policy cancellations, with the number of active life insurance policies dropping by 7.5% in 2023 and an estimated 3.7% in 2024. At the same time, life insurance penetration has fallen from 1.9% in 2022 to an estimated 1.3% in 2024.

The Vietnamese government has implemented regulatory changes to address these concerns. The revised Insurance Business Law, which took effect in November 2023, prohibits the sale of life insurance products within 60 days of loan disbursement and imposes penalties on banks that tie non-mandatory insurance products to loans.

Key growth drivers and future outlook - Endowment insurance, which accounted for approximately 86.1% of GWP in 2024, remains the dominant product segment. New offerings, such as savings-linked policies with coverage for critical illnesses and hospitalization introduced in March 2024, are expected to support further demand, particularly among Vietnam's aging population. 

Insurers are also increasingly leveraging technology to improve distribution and customer service. The adoption of artificial intelligence, big data analytics, and digital platforms is expected to enhance efficiency and policyholder engagement.

Supplementary insurance, which provides additional coverage through riders, continues to gain traction. This segment’s market share is expected to rise from 12.3% in 2024 to 13.7% in 2029, with an anticipated CAGR of 4.9% during the period.

The market is expected to return to growth in the coming years – with regulatory reforms, technological advancements, and customer-focused products expected to help rebuild trust in the life insurance sector. The aging population and rising healthcare costs will drive demand for comprehensive insurance products, ensuring a steady growth trajectory for the life insurance market over the next few years.

Transfer Of Wealth To Next Generation

Asia is undergoing a historic transfer of wealth to the next generation. Within Greater China, most high net worth individuals use insurance to facilitate this process. More than half (57 percent) of high net worth individuals (HNWI) in Greater China said they leverage insurance to facilitate a smoother transfer of wealth to future generation.

In terms of the most important outcome they hoped to achieve, 64 percent prioritized the distribution of their assets in their desired manner to prevent inheritance disputes. 67 percent acknowledged that designating beneficiaries through insurance can help mitigate such conflicts.

Insurance has evolved from a risk management product to a legacy planning tool highly preferred by our HNWI clients. It mimics some key features of will, family trust, and limited power of attorney, making insurance one of the most accessible legacy planning components.

By the types of coverage, life insurance was the leader with close to 78 percent of respondents owning a life insurance policy. This was followed by medical insurance (76 percent) and savings insurance (60 percent). 70 percent also said they have integrated insurance into their asset portfolios with 30 percent allocating 11 percent or more of their assets.

In today’s evolving financial environment, HNWIs are turning to insurance as a key strategic means of achieving financial stability, effectively managing risks, and preserving their legacies.

Singapore Life Insurance Robust Growth

Singapore's life insurance industry recorded robust growth in 2024, with total weighted new business premiums reaching S$5.87 billion. This marks a 19.7% increase from the previous year, the Life Insurance Association Singapore (LIA) reported.

Investment-linked plans (ILPs) emerged as a key growth driver, surging 41% year-on-year to S$2.25 billion, as consumers sought wealth accumulation opportunities amid economic uncertainty.

Non-participating products also showed strong performance, growing 19.2% to S$2.19 billion, while participating products saw a slight 2.7% decline.

The industry reported significant growth in health insurance coverage, with approximately 40,000 more Singaporeans and permanent residents covered by Integrated Shield Plans (IPs) compared to 2023.

Currently, 2.97 million lives – about 71% of Singapore residents – are protected by IPs providing coverage beyond MediShield Life.

Claims payouts increased substantially in 2024, with the industry paying out S$18.12 billion to policyholders and beneficiaries, up 33.4% from 2023. Of this amount, S$16.18 billion was for matured policies, while S$1.94 billion covered death, disability, and critical illness claims.

Curbing Medical Insurance Premium - Malaysia

The continuous rise in medical inflation has led to an increase in the claims rate for medical and health insurance and takaful (MHIT), Second Finance Minister Datuk Seri Amir Hamzah Azizan said. He said Bank Negara Malaysia (BNM) had taken several interim measures to curb the impact of rising MHIT premiums on policyholders, which took effect on Jan 15.

The interim measures include the distribution of premium adjustments due to medical claims inflation over a period of at least three years until the end of 2026, and a one-year delay in premium adjustments due to medical claims inflation for policyholders aged 60 and above who are covered under the minimum plan for the MHIT products purchased.

Additionally, policyholders whose policies have expired in 2024 due to the premium reset can contact their respective life insurers and family takaful operators (ITOs) to request their policies be reactivated based on the adjusted premiums.

Amir Hamzah was responding to a question from Lim Guan Eng (Pakatan Harapan-Bagan) regarding the profits of life insurance companies since 2018 and the resolution of the controversy over premium increases for medical insurance, which had surged by as much as 70%, as well as steps to prevent arbitrary hikes in private healthcare costs.

Amir Hamzah said that through the interim measures, 80% of policyholders are expected to face annual premium adjustments of less than 10% due to medical claims inflation. Meanwhile, he said the average annual profit of the insurance and takaful industry between 2018 and 2023 was RM4.4 billion from life insurers and ITOs.

At the same time, he said the government, through the Ministry of Health, will prioritise comprehensive health reforms to address the issue of medical inflation and charges at private hospitals. These efforts include implementing the Diagnostic Related Group (DRG) payment model, enhancing transparency in drug costs, and comparing common medical costs.

Other measures that can be taken by private hospitals to curb medical inflation are also being discussed as long-term solutions.

Ghost Insurance

Reports of "ghost broking", scammers selling fake car insurance, have risen by 30% over the last five years. Ghost brokers sell false policies to drivers, manipulate information given to genuine insurance companies, or take out insurance and cancel it straight away. This leaves people without valid car insurance, which is illegal.

A victim lost over £500 to a ghost broker. He was looking for cheap car insurance and saw an advertisement on social media for a deal which was half the price of other companies. He bought the policy, and it was only when he tried to make a claim after a crash that he discovered the truth: He called up Aviva and they told me there wasn't a policy taken out in my name and that the number we had given them was not a number they would use.

Aviva was not at fault. Victims are lured in by genuine-looking websites and are sent professional-looking invoices. Victim received insurance documents that looked so real, they even fooled the police officer at the accident.

Trending Korea Micro-insurance

An increasing number of insurance companies have launched small-sum, short-term products that boast high accessibility through digital enrollment and affordable premiums, in a bid to attract the MZ Generation. The MZ Generation includes Millennials and Generation Z, born between the early 1980s and early 2010s. 

Insurers are increasingly developing microinsurance products with lower premiums and simpler coverage to align with MZ lifestyles. Insurance companies will continue investing in coverage tailored to the needs of the MZ Generation and enhancing their digital competitiveness to overcome the insurance market’s decline, driven by various factors such as COVID-19, low interest rates and slow economic growth.

Digital Platform - The insurance subscription rate of the MZ Generation in 2019 was about 10 to 15 percentage points lower than those of all age groups for both life and non-life insurance. However, around 50 percent of MZ respondents reported having purchased or attempted to purchase insurance via computers or mobile devices, the highest among all age groups. This suggests significant potential for digital platform-based insurance sales. 

Lotte Insurance - recently launched a ski insurance plan that covers injuries sustained while skiing or snowboarding, for a premium of just 1,800 won ($1.23). The product, available to customers aged 19 to 59, comes in two plans. One covers only injury-related risks such as fracture diagnosis, surgery and cast treatment costs. Another provides comprehensive coverage from the moment the customer leaves home for a ski trip until they return, including protection against traffic accidents and other risks. The premium for this one is 3,200 won.

Tongyang Life Insurance - for its part, introduced a mini flu insurance plan priced between 2,000 won and 3,000 won last month. This product provides coverage by paying out benefits if the insured is diagnosed with influenza and prescribed antiviral medication for treatment.

Kyobo Life Insurance - introduced a product that covers various conditions that may arise while reading. The plan provides coverage for eye, muscle and joint disorders as well as spine-related conditions. For a 40-year-old male customer with a coverage amount of 10 million won, the one-time premium is only 1,290 won.

Prudential Financial Reported Losses

Prudential Financial shares fell in post-market trading on Tuesday, after the insurer posted a surprise loss for the fourth quarter.

Guaranteed Universal Life Insurance - The life insurer reported losses of US$57 million (RM252.55 million), while analysts anticipated a profit of US$1.1 billion. At its individual life unit, Prudential sustained a one-time hit from transaction costs related to the reinsurance of guaranteed universal life policies, it said in a statement on Tuesday. That unit posted adjusted operating losses of US$57 million.

For the quarter, the firm said it sustained US$1.5 billion of pre-tax net realised investment losses and related charges and adjustments. As at 5.07pm, Prudential shares had fallen 2.9% to US$114.50 in extended trading in New York.

The firm issued several targets for the 2025-2027 period, including its goal to grow its core adjusted operating earnings per share by 5% to 8% over the period. It also aims to keep its adjusted operating expense ratio at 8.5% to 10.5%.

Newark, New Jersey-based Prudential is mapping out its next phase of growth, as chief executive officer Charlie Lowrey is expected to step down next month and be replaced by Andy Sullivan.

AMMB MetLife Great Eastern Life Deal Called Off

AMMB Holdings Bhd and MetLife International Holdings LLC have mutually agreed to terminate the proposed disposal of their jointly owned insurance and takaful businesses to Great Eastern Holdings Ltd, a deal initially valued at about RM1.12 billion.

AMMB said the implementation agreement dated Oct 2, 2023 has been terminated and that the parties involved (AMMB, MetLife, and Great Eastern) have collectively decided not to proceed with the sale of AmMetLife Insurance Bhd and AmMetLife Takaful Bhd to Great Eastern Life Assurance (Malaysia) Bhd and Great Eastern Takaful Bhd.

AMMB’s wholly owned AMAB Holdings Sdn Bhd holds 50% minus one share in AmMetLife Insurance and 50% plus one share in AmMetLife Takaful. MetLife owns the remaining stakes in both entities.

The original plan stipulated that Great Eastern Life Assurance and Great Eastern Takaful would acquire 100% of the share capital in both AmMetLife entities. Following the acquisition, the two insurance and takaful businesses were intended to be merged and integrated with Great Eastern’s existing life assurance and takaful operations.

The merger also included exclusive 20-year bancassurance and bancatakaful agreements, ensuring the distribution of life insurance and family takaful products through AMMB’s network of banking subsidiaries across Malaysia.

The strategic partnership between US-headquartered MetLife and AMMB dates back to April 2014, when MetLife acquired a 50% stake in AmLife Insurance and AmFamily Takaful Bhd (later renamed AmMetLife Takaful) for RM812 million or US$249 million.

Trading of Great Eastern shares has been suspended since July 15 last year, after its parent Oversea-Chinese Banking Corporation (OCBC) acquired close to 94% of its shares following a S$1.4 billion (RM4.6 billion) bid it made in May for the remaining 11.56% it did not own in the insurance company — one of the largest in Malaysia and Singapore — to take it private. But the shareholding is not sufficient to have Great Eastern delisted from the Singapore Exchange or for OCBC to compulsorily acquire the rest of the shares it doesn't own.