Sunday, August 2, 2009

Factory bus operators fume over insurance ‘risk’: The Star

Bus operators ferrying factory workers are fuming with insurance firms for classifying them in the “high risk” category with express and tour buses.
Selangor Workers Bus Operators Association president Jackie Chew Soo Mee said factory buses should not be classified in that category, reports The Star ( July 31, 2009).
"Our operators have a set timetable and the distance is within a district or the next town. Our daily mileage is much lower and the condition of factory buses over a period of time is much better compared to express buses," she said.
Chew suggested that insurance companies create a new scheme to accommodate factory buses in order not to burden operators. Of the 100 factory bus operators in Selangor, half are members of the association.
"With the tough economic period, factory bus operators should not be burdened further. If the new insurance structure is not created, several of our operators will be forced to wind up," she said at the association’s first annual general meeting (AGM).
Chew said the association would appeal to the General Insurance Association of Malaysia (PIAM), Bank Negara and Finance Ministry to create a new insurance scheme for factory bus operators.
She said buses over 12 years old were not allowed to take out comprehensive insurance, with such operators having to buy third party insurance with loading.
Road Transport Department director-general Datuk Solah Mat Hassan, who opened the AGM on behalf of Transport Minister Datuk Seri Ong Tee Keat, said discussions on the insurance scheme was going on with PIAM.

RHB Insurance Eyes RM1.2 Million Premiums From Maid Protector Policy

RHB Insurance Bhd is targeting RM1.2 million in premiums from its latest product, Maid Protector Insurance plan, within the first year of its launch.
RHB group managing director, Datuk Tajuddin Atan, said the premium would be as low as RM60 to RM95 per year.
"This product, which will be offered to only legal foreign maids, will receive an encouraging response from Malaysians who employ maids.
"As at May 2009, a total of 300,000 foreign maids are working in Malaysia," he told a media briefing after the launch of the product here Thursday.
The plan is offered jointly by RHB Insurance and Pos Malaysia Bhd.
It will provide employers with an attractive and competitive protection plan for domestic workers.
The product will provide insurance coverage for maids in the event that they meet with an accident or death, or in the event that an unwanted accident or damage happens to a third party due to negligence of the maids.
Tajuddin said the company was leveraging on Pos Malaysia Bhd's network to offer this product.
The plan will be available at 13 general post offices tomorrow and 671 other post offices nationwide from Aug 15.
The employers can opt for the 12-month or 24-month policy. -- BERNAMA

Finding the right pension model

While the Securities Commission (SC) says it is in the midst of finding successful private pension fund models that best fit Malaysia, fund managers want the models to be transparent and give investors the right to choose their fund managers. Financial planners, meanwhile, say the proposed funds should provide some form of incentives to ensure its successful implementation, reports The Star ( July 25, 2009).
Fortress Capital Asset Management (M) Sdn Bhd chief executive officer Thomas Yong said the proposed pension fund should be liberalised similar to models in many developed nations that allowed savers to choose whom they wished to manage their savings nests.
"If the fund is sufficiently liberalised like that in Australia, savers will have the choice of who manages their investments and what they invest in. While the message is clear that everyone including the self-employed should save for the long term, the issue is who should decide how these savings are managed.
"Should the savers be allowed to decide, with the fund providing adequate disclosures and information, or should the fund decide arbitrarily based on some national average," ,” he told the newspaper.
In any case, he felt the regulatory framework and disclosure standards must first be put in place to ensure effective transparency and liberalisation. A fund manager, who wished to remain anonymous, said the SC while scouting for suitable fund models should ensure investors would be kept informed of the performance of the pension funds managed by all participating fund managers.
“It is not sufficient that the funds’ performance only be disclosed to the regulators, as this will cause doubts among the retirees and the self-employed,” he added.
To ensure the success of such funds, the SC also needed to have asset allocation limits and determine the type of investment instruments permitted for the fund, apart from an appropriate ceiling on fees that fund managers may charge, said Yong. The SC, as the regulator of the proposed funds, is currently gathering input from various jurisdictions to ensure the adoption of successful private pension fund models.
Malaysia is set to have private pension funds by the middle of next year and several fund managers have shown keen interest to manage these funds.
Great Vision Advisory Group head of tax and financial planning Datuk Chua Tia Guan said the funds should not be too flexible to enable contributors to withdraw a lump sum upon retirement as it would easily be exhausted in a short period as in the case of Employees Provident Fund (EPF) withdrawals.
“The government should also provide tax break for the participants of the private pension funds in addition to the current tax relief given on insurance and EPF of RM6,000.
“In Singapore, the government provides tax relief for those who participate in the Supplementary Retirement Scheme, which was introduced many years ago, in addition to the Central Provident Fund,” Chua noted.
He added that proper studies should also be conducted to ensure the funds did not experience similar fate as the disastrous insurance annuity scheme introduced years back. A licensed financial planner said it was meaningless for existing EPF contributors to invest in pension funds unless certain tax benefits were provided.
Licensed financial adviser Jeremy Tan of Standard Financial Planner Sdn Bhd, on the other hand, said the launching of these funds would not be an issue as there was sufficient existing regulatory supervising and monitoring of legitimate investment schemes in the country.

OCBC ties up with Great Eastern to offer bancassurance products

OCBC Bank (Malaysia) Bhd aims to be among the leading players in the bancassurance market following its partnership deal with Great Eastern Life Assurance (Malaysia) Bhd.
It aims to capture a 10%-15% share of the regular life insurance market in order to become a significant player in the field.
However, it did not reveal its current market share, saying that there were no accurate figures for the segment at the moment. OCBC which started operations in the bancassurance field under several partnerships six years ago, will market two Great Eastern bancassurance products, MaxMoney Plus and MaxMoney Back, beginning today (yesterday), said OCBC Bank director and chief executive officer, Jeffrey Chew Sun Teong.
He said this during a press conference following the launch of the products in Kuala Lumpur yesterday. MaxMoney Plus is expected to generate RM12 million in premiums by year-end, while MaxMoney Back is expected to garner about RM6 million.
Another product is expected to be launched next month. Meanwhile, Great Eastern Life Assurance (Malaysia) Bhd director and chief executive officer Koh Yaw Hui, said the tie-up will help Great Eastern to achieve its target of total weighted new business premiums of RM800 million this year. He said with a network of 29 branches throughout Malaysia, OCBC Bank's ability to mine its customer base rendered significant market potential for Great Eastern making personal visits to bank branches was still common.
Koh said the bancassurance arrangement with OCBC Bank was made possible through a combination of both the government's recent liberalisation initiatives and a strong partnership forged between the two companies over the past seven years.
In Malaysia, bancassurance forms about half of the new premiums collected annually in the life insurance market with more than 90% from single premium, he said.
He said Great Eastern also planned to expand its network of branches. In the Klang Valley, which contributes 38% to Great Eastern's business, there are plans to set up a big branch office in Mutiara Damansara, Petaling Jaya, he said. Its presence is more focussed in Kuala Lumpur at the moment. It also expects to open up branches in the states. — Bernama

Zainuddin: From humble beginnings to moving mountains

By Alfean Hardy
Options were not plentiful if you were a secondary school graduate in Rembau, Negri Sembilan, in the late 70s. According to HSBC Amanah Takaful (Malaysia) Sdn Bhd executive director and chief executive officer Zainuddin Ishak, the most most people could look forward to was working in a factory in Senawang.
"My father was a rubber tapper and my mother a housewife. There were eight of us in the family and life at that time was borderline poverty or poverty. I went to a kampung school in Rembau and graduated from a secondary school that was also in Rembau," he told The Malaysian Reserve recently.
With no career advisers around to guide an impressionable youth from a large family, perhaps that was where Zainuddin would have ended up. It was sound advice from his eldest brother, a former Institut Teknologi Mara (ITM) student, that changed his life. "He advised me to take up an insurance qualificaion. He told me it was a very difficult course, an external course with the professional papers coming from the UK.
"He said that amongst his friends who managed to clear some of the papers, and not the full syllabus, made it big time in the insurance industry. So, I said to myself, it sounds good, make money, why not," he added. This, Zainuddin said, was in 1984.
"To cut a long story short, I got accepted into ITM (now known as Universiti Teknologi Malaysia, or UITM). Prior to doing the associate (paper), you had to sit for the certificate. "There were 80 of us in that batch class of 1984 sitting for the certificate. Only 30 went on to do the associate. Of that, only four of us made it through," he added.
Zainuddin said, those who did not clear the associate papers could still get a decent job. For him, though, the challenge of being able to take on a difficult endeavour was a prime motivator and it was this drive within him, he felt, that helped him make it all the way through. "I made it, not because I'm clever, but because I've always had the tenacity and the stamina to complete any task placed before me. I guess that's my strong point. The more difficult it is, the more determined I am to clear the hurdles," he said.

The start of a long and fruitful career in the industry began in 1989, as a management trainee at Aviva with the possibility of getting a full time job within six months. Unfortunately for Zainuddin, this opportunity came at the tail end of a recession, which spelled stiff competition for a permanent position. "When I first joined the industry, because (of the) recession, there were a lot of unemployed people in the industry. There was big competition to get a permanent position (in Aviva) but the internship gave me the opportunity to work in a world-class organisation.
"My first real job was after that, as a full executive, was with a company owned by Kompleks Kewangan in the early 1990s called Trust International Insurance (TII), developing a bancassurance channel for the company. "I got my exposure in sales in the insurance industry," he added. That break with TII was pivotal for Zainuddin. After three years, he went on to join Norwich Winterthur before moving on to Malaysia National Insurance Bhd (MNI) and eventually to American National Insurance, which was owned by the New Straits Times Press Bhd (NSTP) group at the time. "I stayed there for a long while. What changed was the company. Because of a series of acquisitions, from NSTP to Bank of Commerce to CIMB, I stayed with one company that changed its shareholders until I became chief executive officer of CIMB Bank Aviva Takaful," he added.

All in all, Zainuddin stayed with the firm for almost 14 years, slowly and steadily moving up the ranks every two years or so. Eventually, though, it was the challenge of something new that attracted him to make the change in mid-January 2009. "If you look at the takaful industry, there are various stages of maturities amongst the eight companies here. HSBC clearly has gone through its crucial, formative stage.
"When you're at the formative stage, it's good to have internal people because you understand the people and the culture.
"When you want to take it to the next stage, you need to get outside people and bring in the industry expertise to come in and take a company to the next level. "I felt that this was a good time for me to come in and bring the company to that next level. HSBC is an admired brand and it gives you more opportunities and avenues to grow," he said. Formed in 2006, HSBC Takaful is a joint venture (JV) that is 49%-owned by HSBC Insurance (Asia Pacific) Holdings Ltd, 31%-owned by Jerneh Asia Bhd and 20%-owned by the Employees Provident Fund (EPF).
To Zainuddin, his challenge for this relatively new venture was to take it to the next level. "In everything, nothing is ever good enough. Every day is a challenge, nothing is ever good enough. Every day you're looking at opportunities to improve from yesterday.
"We're always improving. It's always the next level, it's always a moving target. You've got lots of room to improve. Every day is about improving what we are today," he said.
"Another challenge is to bring takaful to the HSBC world because Malaysia is the first takaful outfit (within the group) and vice versa. "We need, (and) the industry certainly needs, big names like HSBC to champion takaful so that it will make takaful very prominent. That's my challenge, how to fulfill the vision, the set of targets, etc," he added.
The task for the boy from Rembau is certainly a challenging one, what with a very competitive industry and a global economy that has a bad case of the flu but, somehow, you sense that, with his drive, determination and desire to succeed, Zainuddin will certainly move mountains to get the job done.

(This story appeared in The Malaysian Reserve on July 22, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on insurance & takaful called UNDERWRITER, appearing on alternate Wednesdays)

Prudential’s biggest ad campaign

Prudential Assurance Malaysia Bhd has allocated RM7mil for its biggest advertising campaign to-date to promote its new medical insurance plan, PRUhealth, reports The Star (July 18, 2009).
According to chief marketing officer Thomas Wong, the campaign starting July 20 via television, radio, print and outdoor advertising, is expected to generate a considerable amount of interest for the unique medical insurance plan, which rewards policyholders for staying healthy by giving them no claims bonus.
“We expect to secure a large proportion of new and existing customers for this first of its kind product in the market,” he said. One of the biggest medical insurers in Malaysia, Prudential paid a third of the industry’s medical costs last year, which amounted to RM900mil, the newspaper reported.