MCIS Zurich CEO appointed LIAM president

MCIS Zurich Insurance Bhd chief executive officer Md Adnan Md Zain has been elected at the president of Life Insurance Association of Malaysia (LIAM) at its 35th annual general meeting (AGM) on March 25, taking over the helm of the industry body from Am-Life Insurance Bhd CEO Ng Lian Lu.
Ooi Say Teng (picture, left), their counterpart at Uni.Asia Life Assurance Bhd, was elected as the vice president.
The two top positions at LIAM are elected at every AGM with the maximum term in office of the president being three consecutive years.
Adnan, who began his career in the banking industry with Standard Chartered Bank (SCB) in 1981, headed the bank's key regional corporate banking project based in Hong Kong from 1990 until 1992.
He was the head of global electronic banking, reporting directly to the group head office in London, prior to leaving SCB in 1995. He subsequently held various key management positions within the banking industry, including being the acting CEO of Alliance Merchant Bank in 2003, before going to MCIS Zurich in April 2005 as its deputy CEO and subsequently being appointed as CEO in February 2006.
Md Adnan sits on the boards of the Malaysian Insurance Institute and Malaysian Life Reinsurance Group Bhd.
Ooi, who graduated with a Bachelor of Science (Honours) degree in Actuarial Science from the City University, London, in 1993, has about 26 years of experience in the insurance industry, LIAM said in a statement.
Prior to joining Uni.Asia Life as its CEO in January 2003, he was the assistant general manager of Mayban Life Assurance Bhd from January 2000 to December 2002, and deputy general manager of MBA Life (now known as Allianz Life Insurance Bhd) from 1996 to 1999. Ooi started his career with MCIS Insurance (now known as MCIS Zurich) in 1983 as an actuarial officer. He is a director at Malaysian Life Reinsurance Group Bhd. -- The Malaysian Reserve (Mar 31, 2009)

LIAM: ‘BNM’s risk-based capital regime has benefitted industry’

By Habhajan Singh
The central bank's recommendation back in 2001 to establish prudential risk management standards has contributed to a significant strengthening of the life insurance sector, says the nation's life insurance body.
"Insurance companies are now very adequately capitalised based on the risks undertaken by the companies.
"Risk management practices have also been significantly enhanced as a result of a risk-based capital regime," Life Insurance Association of Malaysia (LIAM) president Ng Lian Lu told The Malaysian Reserve in a recent interview.
He was commenting on the position of the industry today since Bank Negara Malaysia (BNM) introduced the Financial Sector Masterplan in 2001, which also involved the insurance sector.
Below are extracts from the interview covering a number of issues facing the industry:

Industry Developments

TMR: What is the latest take on the critical illness scheme with EPF?Ng: We are currently in discussions with various stakeholders on the roll out of the scheme. As the scheme is made available to all EPF members who have been a member for at least three months, the potential number of people signing up for the scheme is very significant. Various bodies have requested information and explanation of the scheme's features, hence we see the need to engage the key stakeholders before the scheme is launched. This is despite the fact that the scheme is not compulsory and members have complete freedom in deciding whether to purchase the product and whether the scheme benefits meet their needs.

TMR: What is the progress of members adopting the Risk-Based Capital (RBC) framework?
Ng: The RBC came into force on Jan 1, 2009. All member companies have adopted the RBC. There was never a doubt that the transition to the new regime would be smooth as companies have conducted parallel runs for two years and all teething problems have been addressed prior to the implementation of the RBC.

TMR: A CEO of an insurance company has suggested that the RBC regime provides an opportunity for consolidation, as the regulatory demands greater levels of judiciousness by insurance companies to manage their capital adequacy levels based on the risks they took. Do you share this view?
Ng: Based on the statistics of BNM as at end-2007, there were eight life insurers, 25 general insurers and eight composite insurers. It is not hard to see that there is high potential for consolidation to happen in the general insurance industry. Under the RBC regime, capital required is linked to risks undertaken, (and) insurance companies need to have a proper capital management plan to ensure the efficient deployment of capital. This creates the opportunity for risk diversification through mergers and acquisitions. Companies that manage capital well may also be able to create value by taking over companies that have not managed capital efficiently. TMR: Are we set to see any major M&As in the life insurance sector? Ng: We do not rule out M&As in the life insurance sector in Malaysia. Personally, I would have thought that more M&A activities are likely to happen in the general insurance industry than the life sector.

(to be continued)

(This story appeared in The Malaysian Reserve on Mar 18, 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, edited by Habhajan Singh.)

Insurers’ investment returns to suffer ‘significantly’

By Habhajan Singh
The expected investment returns for most insurance companies will "suffer significantly" this year as the economy takes a beating, Life Insurance Association of Malaysia (LIAM) president Ng Lian Lu said.
"Achieving a good investment return will be one of the major challenges," he told The Malaysian Reserve recently.
Concerns about investment returns are global, a recent international survey of insurers showed.
In the second Insurance Banana Skins survey by The Centre for the Study of Financial Innovation in association with PricewaterhouseCoopers (PWC), investment performance emerged as the number one risk.
"The ability of insurance companies to get through the crisis depends above all on their investment performance, i.e. achieving sufficient returns to protect capital, remain profitable and meet commitments to customers," the report said.
In the previous survey in 2007, investment performance came in at No. 11. The fallout from the credit crunch and its impact on the strength and profitability of the insurance industry propelled investment performance to the top of the list of concerns for insurers worldwide.
Locally, Ng said the indsutry was not surprised that the sale of single premium products, the main purpose of which is for investment, was affected in 2008.
The association, which represents 18 life insurers including Great Eastern Life Assurance (Malaysia) Bhd, MCIS Zurich Insurance Bhd and Prudential Assurance Malaysia Bhd, expects to see a negative growth of 27% in single premium business.
Despite operating in a difficult economic environment, he noted that the annual premium business managed to achieve a 5.4% positive growth rate in 2008 while group insurance business "performed even better in 2008" with an 18% growth over the year before.
"There are two main reasons why people buy insurance, one is for protection and the other for investment. "In the current economic environment, it is very challenging to deliver good investment returns," he said.
In an earlier statement, when commenting on the life insurance performance for 2008, LIAM said based on preliminary data issued by the association for the entire life insurance business in Malaysia, individual traditional business (savings and protection plans) enjoyed a strong double-digit growth of 19.1%, or RM2.5 billion, in 2008.
It said group insurance also chalked up a healthy 18% growth despite the tough business climate.
"The unfavourable investment environment and economic conditions have resulted in a slowdown in the sale of investment-linked products, which recorded a decline of 32.6%," it added.

(This story appeared in The Malaysian Reserve on Mar 6, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on insurance & takaful called UNDERWRITER, edited by Habhajan Singh.)

LIAM denies issuing ranking on insurance companies

The Life Insurance Association of Malaysia (LIAM) has denied issuing any public information regarding the ranking of life insurance companies in Malaysia.
In a statement released in Kuala Lumpur on March 2, LIAM clarified that the few advertisements placed by a life insurance company recently claiming it was ranked the No.1 life insurer in Malaysia, was inaccurate.
The insurer according to LIAM, cited it as the source of the ranking. But LIAM stated the ranking was not endorsed by it.
LIAM, which has 18 members, of whom 16 are life insurance companies and two life reinsurance companies, however did not name the company.
LIAM meanwhile said that the unfavourable investment and economic conditions had resulted in a slowdown in the sales of investment linked products, which recorded a decrease of 32.6%. — Bernama (Mar 2, 2009)