Sanlam Is Coming

Zurich Insurance Group is engaged in discussions with South African financial services firm Sanlam to divest its 40% stake in MCIS Zurich Insurance.

In 2001, Zurich Insurance combined its Malaysian operations with MCIS to establish MCIS Zurich. The Swiss insurer purchased Malaysian Assurance Alliance (MAA) in September 2011.

The move comes after, Bank Negara Malaysia, the country's central bank, mandated that no foreign company can own more than one insurance operation in the country.

A Zurich-based official from Zurich Insurance was quoted by the news site as saying, "We are working with other stakeholders in MCIS Zurich to resolve the issue of Zurich's interest in two licences and are confident that the situation will be regularised well within the deadline that the central bank has given to us on this matter."

Health Insurance

A man hired by an employment agency to work in a manufacturing company for a living collapsed on the job one afternoon. As his colleagues at his work place were trying to resuscitate him, another worker attempted to call in the ambulance service to come and take him to the nearest hospital.

Slowly gaining consciousness, this worker who was soaked in water and struggling to talk heard the suggestion made by the coworker which he objected to it by waving his hand to give a no signal to the suggestion.

Few minutes after he gain consciousness and was asked whether he will like to take some days off to seek full medical attention to attain total health, again he said no saying “I want to work”.
Workers at the company who knew what happened were shocked as why he was still insisting to work after that near death experience but did not know exactly why he won’t take days off from work.

Couple of days after, this worker quit the job without giving anyone any reason for his no show at work. Later on it was found out that he was not covered by any health insurance policy for him to receive quality medical care which will cost him big therefore he has to find some flimsy excuse to cover up.

Health insurance is not a luxury but rather a necessity for every individual to sign and receive quality health care in his or her life time. Medical emergencies are becoming very expensive the world over and if one have a medical emergency without insurance finds himself with a crippling amount of debt and seemingly no way out of the debt.

Technology Reshape Insurers

The global insurance market is facing as much change in thenext five years as it has over the past 50, as technological advances drive transformation in the sector and shape customer expectations.

Eighty-six percent of 74 global insurance CEOs surveyed by PwC in the final quarter of 2013 pegged technological advances as the trend most likely to transform their businesses in the next 12 months.

More than 60% of insurance CEOs surveyed by PwC see the speed of technological change as a threat to their organisations. In addition to pursuing opportunities in developing markets, global insurance CEOs are looking for new avenues to expand market share in mature economies.

Globally, 47% of insurance CEOs view increasing share in existing markets as the most important opportunity for growth. This is followed by product and service innovation at 26%. In developed markets where insurance penetration is high, 72% are concerned about slow or negative growth.

The report highlights that insurance CEOs view the digital economy, social media, mobile devices, big data, and other technological developments as having an especially transformational impact on
their businesses.

Out of 1,344 business leaders surveyed globally in the annual CEO survey, 105 were from South Africa and fewer than 10 from the financial services sector.

3 Reasons For Life

Death isn’t a topic that many people like talking about, but if you’re financially responsible for others, it’s your responsibility and obligation to discuss it with the people in your care. An essential part of this is discussing life insurance, because coverage like that can help the others once you’re gone. Here are the three types of people who really need to consider life insurance.

Are You Married and With Children?

Kids are some of the most vulnerable people in our society, so if you’re a married parent, you should really consider life insurance. Married parents in particular need to think long and hard about taking out a policy because many feel that their families are invincible. The sad truth, however, is that accidents happen, and if one parent passes away, it can place immense pressure on the other to provide all of the support for the children. The sensible thing would therefore be to take out life insurance to ensure that you’re providing for your family once you’re gone. 

Are You a Single Parent or Carer?

Single parents are in a very similar situation, except there’s more impetus to invest in a good life insurance policy because your children are more dependent on you. Around 4 in 10 single parents don’t have life insurance, so if you’re one of them, you should think seriously about the future of your children and the quality of life they would have if you have or don’t have life insurance. So even if you’re feeling fighting fit, you shouldn’t write off life insurance.

Are You Single With Aging Parents?

At the moment, you might not be worrying about the health of your parents. If they’re still young and you’ve had no other real experience of caring for the elderly, you may not have the foresight to know that as your parents get older and older, they’re going to require more and more of your care and attention. This extra care comes at a cost, of course, and if the unfortunate situation where your parents outlive you occurs, life insurance could help you to provide the care they need while you’re not around. Not all single people need to worry about life insurance, but if you have parents who are reliant on you, it’s definitely worth your consideration.

AmAssurance Sold To MetLife

American insurer MetLife Inc is banking on AMMB Holdings Bhd’s insurance arm to expand its reach in Malaysia while eyeing the opportunity to establish itself and grow in Indonesia in the future.

MetLife International Holdings Inc (MetLife), a subsidiary of MetLife Inc, has agreed to buy 50% plus one share in AmLife Insurance Bhd and 50% minus one share in AmFamily Takaful Bhd (AmTakaful) for a total of RM812 million from AMMB.

The deal will see MetLife and Am- Life and AmTakaful entering into exclusive 20-year bancassurance and bancatakaful agreements for the distribution of life insurance and family takaful products through the distribution network of AMMB’s banking subsidiaries, AmBank (M) Bhd and AmIslamic Bank Bhd, across Malaysia.

In January last year, AMMB bought back a 30% stake in its two insurance divisions for RM245 million from Resolution Ltd, ending its partnership with the UK-based firm. A 10% stake in both companies should be priced at about RM82 million and a 50% stake in both companies should cost about RM410 million.

Nonetheless, a premium is always paid for exclusivity as evidenced by Khazanah Nasional Bhd partnering Canadian firm Sun Life Financial Inc in a RM1.8 billion deal to acquire 98% of CIMB Aviva Assurance Bhd, creating a new company called Sun Life Malaysia Assurance Bhd.

Sun Life paid more than Khazanah acknowledged with the difference in price being attributed to the extra consideration being paid to CIMB for a number of items, including a share in a strengthened bancassurance agreement with CIMB Bank Bhd.

Micro Insurance = Micro Commission

Micro insurance or micro agent was a channel in the insurance industry that was developed for deeper penetration of insurance into country with large low income group. However, with smaller ticket size coupled with low commissions, this channel has seen low participation from distributors.

Micro-insurance products, which offer coverage to low income households is a mechanism to penetrate rural areas. It is a general or life insurance policy with a low sum assured and low premium size per policy.

The main reason behind few sellers of micro-insurance policies could be low commissions. Data from insurance company disclosures showed that a majority of insurers do not have any micro-agents. A handful of life and general insurers have such agents.

Direct Insurer

Consumer generally have bad experiences after purchasing life insurance directly from life insurance. The majority of the purchase is done via online. Instead of turning to advice on insurance after a bad experience with direct insurance, most people end up thinking that it is not worth having life insurance because they have had a bitter experience.

Consumer are not comfortable about how direct insurance is sold at all because it is not underwritten at the time of sale. As a result - most people think they're covered when they might not be and because direct insurance companies do not ask about previous illnesses until claim time, clients find out that they are not covered when it is too late.

It is necessity to raise consumer awareness about the importance of getting life insurance through life insurance agents - but it is difficult for the agent - to match the direct insurance advertising campaigns.

Direct Life Insurers - are getting big coverage in morning television or evening television. There's a fair bit of money that goes into those and as an industry we can't match that. Life insurance companies with tied agency are struggling at the moment and that matching the direct insurance spending in advertising would force companies to increase premiums.

That would drive consumers even further away from advised insurance.

The life insurers that uses agent - need to find other ways to tell people they need proper advice. But is it working? No, people are still buying direct insurance in droves despite getting burnt when submitting claim.