HSBC Issued $250 Million Life Insurance Policy

Issued and fully underwritten by HSBC Life, the firm’s insurance arm based in Hong Kong, this monumental policy underscores HSBC’s prowess in the insurance sector and its ability to cater to the evolving needs of affluent individuals.

Structured as a whole-of-life protection plan, the policy promises to pay out a substantial $250 million to the named beneficiary of the insured individual upon their demise. With features meticulously crafted to safeguard the insured’s wealth for future generations, this policy stands as a testament to HSBC’s commitment to providing comprehensive and tailored insurance solutions.

In the past year alone, HSBC Life has issued an impressive ten life insurance policies valued at $50m or higher to individual clients, reflecting the company’s strong foothold in the high-value insurance market.

In 2014, the previous Guinness World Record was set for a life insurance policy valued at $201m, certified in California, United States.

Malaysian - Inadequate Savings

A significant number of Malaysians do not have enough savings for their retirement, with only 33% of active Employee Provident Fund (EPF) members having recorded basic savings of RM240,000 as of last year. This percentage represented 2.4 million members aged between 18 and 55 in the formal sector.

However, this was an improvement from the 31% in 2021 and 30% in 2022 – which were due to withdrawal facilities for EPF members during Covid-19 lockdowns – but still a plunge from 37% in 2020.

As at December last year, there were 16.07 million EPF members. 8.52 million were active members, representing 50% of Malaysia’s 17.03-million-strong labor force.

Target Amount At Age 55 - Basic savings is a pre-determined amount set according to age in Account 1 under EPF to enable members to achieve a minimum savings of RM240,000 by the age of 55. Current data showed that the number of people aged between 41 and 50 who had achieved their basic savings was higher than those aged between 51 and 55, who are closer to retirement age. 

All this data is telling me that a large portion of the population has inadequate savings for retirement. 75% of members who had retired and taken out their savings in a lump sum ran out of money within five years.

Beyond Formal Employment - Rapid transformation of the working landscape, with more people shifting beyond formal employment, as one of the challenges, referring to a rise in gig workers and self-employment due to the Covid-19 pandemic.

Malaysia anticipates an increase in different types of jobs going beyond formal employment, including gig jobs, remote working, and independent contractors. While this group of people would generate relatively higher income, they would not have old-age protection as they are not covered by any social security.

Research showing that by 2040, 33% of employment in Malaysia was projected to be in the informal category. This would lead to lower likelihood of old-age income security and financial resilience upon retirement while at the same time, lowering the active formal membership base at EPF.

Who Is Doctor Ruth Gottesman

A historic, billion-dollar donation to a medical school in New York City has provided students with free tuition moving forward. Albert Einstein College of Medicine in the Bronx received a $1 billion donation from Dr. Ruth Gottesman, former professor and chair of the school's board of trustees.

The massive donation -- a "transformational gift," is among the largest ever made to a university in the United States and seemingly the largest made to an American medical school, according to the institution. The $1 billion donation will ensure that no student at Einstein will have to pay tuition again.

Free Tuition - All current, fourth-year students will be reimbursed their spring 2024 semester tuition and, beginning at the start of the next term, all students moving forward will receive free tuition at Albert Einstein College of Medicine.

Tuition and fees for one year at the medical school total over $63,000, and more than half the medical students owe upward of $200,000 in student debt after graduating. Almost half of students are New Yorkers and nearly 60% of students at the university are women

David Sandy Gottesman - The donation comes from Gottesman and her late husband, David "Sandy" Gottesman, who was the founder of First Manhattan Co. and an early investor in Warren Buffett's Berkshire Hathaway, before he died in 2022 at 96 years old.

RSA Insurance Claim - Exposed

A court in Ireland dismissed a mother’s $820,000 insurance claim after a picture emerged of her winning a contest to see who could toss a tree the farthest. Kamila Grabska, 36, had claimed that a car accident in 2017 left her with “debilitating pain,” leaving her unable to lift heavy bags and keeping her in bed on bad days, according to disclosures made at Ireland's High Court.

The constant pain in her back, neck and thoracic spine left her unable to lift groceries, do chores or play with her two children. She sued RSA Insurance on the basis that she could not work for over five years, claiming past and future loss of earnings that amounted to around $542,000 of her total claim.

Claim Scam Exposed - Her case came unstuck when a photo published in the newspaper almost a year after her accident showed Grabska winning a Christmas tree throwing contest.

The picture, taken in January 2018, shows Grabska, wearing a yellow jacket, forcefully throwing the tree in the town of Ennis in western Ireland, where the championship, based on an old lumberjack competition, takes place. The winner is the person who throws it the farthest.

A second picture published the day shows her smiling as she holds a mounted certificate declaring her the champion.

Court Examinations - When she was cross-examined in court, Grabska said she still felt pain when she threw the Christmas tree and was smiling in photos because she was trying to “live a normal life. But Judge Carmel Stewart, who presided over the case, said she had no choice but to dismiss the claim because of the “very graphic picture” of Grabska’s throwing the Christmas tree, which was “at odds” with the medical evidence provided. “I’m afraid I cannot but conclude the claims were entirely exaggerated,” she said.

She also took into consideration video from last November, played to the court, showing Grabska play-wrestling with a big Dalmatian dog for up to 1.5 hours. An entry on the Courts Service of Ireland says Grabska’s case was dismissed last week. It did not include any further details.

RSA Insurance and Grabska’s legal representatives did not immediately respond to requests for statements.

20% Malaysia Medical Premium Hike

Health insurance policyholders in the country seem to be the hardest hit when it comes to price hikes. For the second time in three years, health insurers have seen it fit to increase their premiums by a hefty 20% or more.

2021 Premium Hike - This comes after a similar re-pricing exercise in 2021 which saw 20%-30% increases during the height of the COVID-19 pandemic and economic downturn.
Industry offers multiple reasons, including medical inflation and the post-pandemic elective surgery uptake. While insurers were very active in trying to contain costs, providers were not actively controlling costs for insured patients. Policy plan designs which are changing also do not encourage patients to be conscious of costs as most plans today pay nearly 100% of the hospital bill.

Who’s at fault - Private hospitals had implemented strategies to manage the effects of escalating premiums. While cost-effective practices such as using generic medications and efficient technologies were embraced, balancing affordability and sustainability was challenging. This is a continuing tug-of-war between insurers seeking cost-effective solutions and healthcare providers advocating for patient choice and maintaining quality care standards.

Federation of Malaysian Consumers Associations (FOMCA) challenges the narrative of insurers attributing the premium hikes to medical inflation and rising private hospital charges.
FOMCA identified the lack of price controls on medicines and medical devices. While doctors’ fees are regulated, they are often bundled with treatment, medicines and hospital charges. There is often a lack of transparency in disclosure and worse still, the prices charged are exorbitant.

He described the considerable rise in insurance premiums as “unjustified”. The overloaded public healthcare system often pushes consumers towards private healthcare where prices are unregulated, resulting in exorbitant bills.

Justifying premium re-pricing - LIAM explained that on-going medical claims witnessed a considerable surge with a notable 28% increase in 3Q 2023 compared to the same period in 2022. This follows a substantial 34% hike in 2022.

The medical insurance policy becomes unsustainable when the premiums collected are insufficient to cover the expected claims expenses. BNM declined to respond if it had approved this latest premium re-pricing. This leaves a critical regulatory perspective unaddressed in the on-going dialogue on the sustainability of health insurance protection in Malaysia.

According to BNM’s 2019 Annual Report, the re-pricing of medical and health insurance (MHI) products is a significant concern affecting 4.5 million policies between 2016 and 2019. The consequence of this re-pricing is an affordability crisis as more expensive premiums render coverage increasingly unaffordable for a significant portion of the population.

This phenomenon is exacerbated by what the Report terms the “buffet syndrome” wherein policyholders seek to maximize the value of their premiums without considering associated costs, contributing to the upward spiral of healthcare expenses.

Sunlife Engaging Generation Z

Sun Life Philippines (Sun Life) has rolled out a new campaign response to the evolving job landscape, driven by the gig economy’s allure for younger workers seeking independence and flexible work arrangements.

The insurer’s “The Next Big Gig” campaign aims to engage millennials and Generation Z, who are progressively gravitating towards freelance and part-time roles, by introducing the concept of becoming a financial advisor as an appealing side gig.

The campaign kicked off with a media event at the Makati where Sun Life financial advisors shared insights into the benefits of their roles, including potential earnings, flexible working hours, and the satisfaction of assisting clients on their financial security path.

Highlighting the campaign’s launch was the debut of a new digital video by Sun Life, portraying financial advisors from varied professions – including teaching, online retail, corporate sectors, and entrepreneurship. The individuals testified to the advantages of their dual roles, emphasising financial gains, travel perks, advocacy opportunities, and the rewarding experience of guiding clients as a “Partner for Life”.

The event also featured interactive booths, or “pods”, each designed to offer a glimpse into the life of a financial advisor. These included a quiz on life insurance knowledge, a photo booth with an international travel theme representing advisors’ travel benefits, and a display of the advisors’ social responsibility initiatives, complete with an interactive voting system for future projects.

Vietnam Life Insurance 12% Growth 2022

Vietnam remains a key life insurance market in Asia with nearly 14 million life insurance contracts as of the end of 2022. The number of life insurance contracts in the country in 2022 increased by 5 per cent year on year and premiums rose by 12 per cent to over 178 trillion Vietnamese dong (US$7.6 billion).

Bancassurance - Of the contracts, 995,000 were through bancassurance, which accounted for 46 per cent of the premiums. Life insurance claims last year topped 44 trillion Vietnamese dongs ($1.9 billion), a 34 per cent increase. The life insurance market in Vietnam has 730,000 agents.

Recently, insurance companies in Vietnam have been required to tighten the supervision of agencies and sales amid negative feedback from the public over poor transparency of insurance products.

The country's Insurance Supervisory Authority demanded insurance agencies immediately take measures to provide clients with complete and accurate information and review the quality of their agents' consultation and sales techniques.