• Best Insurance Plans in Malaysia

    Insurance has become an inevitable part of the lives of people. With the mandatory norms on having a motor insurance before taking your vehicle on the road, it has become an imperative to know how a motor insurance works . Similarly, you must be aware of the various insurance policies available to keep your daily routine going smooth; irrespective of any unfortunate events that may occur.

    Here is a brief overview of the meaning of insurance, takaful, their types, and different insurance providers under each category.

    Quick Reads

    Types of Insurance Policies in Malaysia

    • Life Insurance: It embraces and protects many aspects of your life, such as for retirement. Some of the plans associated with life insurance are:
      • Endowment Plan: You get both protection and savings with this plan.
      • Investment-linked Plan: The policy combines protection and investment under one plan. You will receive the balance in your investment account once the policy matures.
      • Annuity: The policy provides you a monthly pay-out until the policy is active. This is useful to spend your retirement life conveniently.
      • Whole Life Insurance: The insurance remains active and protects you until you reach an age of 100 years. Therefore, the premium you must pay may be high.
      • Term Life Insurance: The plan offers protection for a short period of time. Some policies may be required to renew every year.
    • Health Insurance: With a health insurance policy, you can get a cover on the medical treatment expenses. It also covers surgical expenses and hospital stay costs. Some policies cover the treatment cost of a number of pre-specified critical illnesses. The premium varies based on the number of people covered by the policy.
    • Personal Accident Insurance: A personal accident insurance is an annual cover that provides you with the policy benefits when you meet with an accident resulting in injuries, disability, or death. Such a policy may provide funeral expenses, repatriation benefits, and weekly indemnity.
    • Motor Insurance: Such insurance plans protect your vehicle against theft, damage, and other unforeseen events. You must have a motor insurance if you have to take your vehicle on the roads of Malaysia.
    • Home Insurance: Home insurance comes in two forms:
      • House Owner’s Insurance: This policy covers your house and its permanent fixtures against any damage caused due to natural disasters.
      • House Content Insurance: The house content insurance provides coverage in favour of the current householder. The contents of the house is covered and provides you benefits when there is loss/damage to the content of your house due to events such as robbery.
    • Travel Insurance: A travel insurance provides coverage against any unfortunate events that may occur when you are travelling, such as loss of baggage, flight delay/cancellation, and personal accident while travelling or during your stay abroad. Some policies provide coverage you only when you travel abroad, while the others provide cover even when you are travelling in Malaysia.

    Top Life Insurance Companies in Malaysia

    Company Name No Lapse Guarantee Basic Sum Assured on Death/TPD Investment-Linked Insurance Premium Top-Up Facility Guaranteed Maturity Benefit
    Allianz Malaysia Yes (6 years) Yes Yes Yes No
    AXA Affin No Yes Yes Yes No
    Hong Leong Assurance No Yes Yes Yes Yes
    AmMetLife No Yes Yes Yes Yes
    Gibraltar No Yes Yes - Yes
    Great Eastern Life Yes Yes Yes Yes Yes
    MCIS Insurance Yes (5 years) Yes Yes Yes Yes
    Prudential Assurance Malaysia Yes Yes Yes - Yes
    Sun Life Malaysia No Yes Yes Yes Yes
    Tokio Marine Yes Yes Yes No Yes

    Top Health Insurance Companies in Malaysia

    Company Name Hospitalisation Expense Cover Surgical Expense Cover Critical Illness Cover Outpatient Treatment Cover Overseas Treatment Cover
    Hong Leong Assurance Yes Yes Yes Yes Yes
    AXA Affin Yes Yes Yes Yes Yes
    AmMetLife Yes Yes Yes Yes No
    Gibraltar Yes Yes Yes Yes No
    Great Eastern Life Yes Yes Yes Yes Yes

    Top Personal Accident Insurance Companies in Malaysia

    Company Name Accidental Death Cover Accidental TPD Cover Third-Party Cover Renewal Bonus
    Berjaya Sompo Insurance Yes Yes Yes Yes
    Tokio Marine Yes Yes Yes Yes
    Pacific & Orient Yes Yes Yes Yes

    Top Motor Insurance Companies in Malaysia

    Company Name Comprehensive Cover Third-Party Cover Passenger/Pillion Cover No Claim Discount
    Tokio Marine Yes Yes Yes Yes
    AXA Affin Yes Yes Yes Yes
    Pacific & Orient Yes Yes Yes Yes
    AIG Malaysia Yes Yes Yes -
    Berjaya Sompo Yes Yes Yes Yes

    Top Home Insurance Companies in Malaysia

    Company Name House Building Cover House Content Cover
    Great Eastern Life Yes Yes
    Etiqa Yes Yes
    Tokio Marine Yes Yes
    Pacific & Orient Yes Yes

    Top Travel Insurance Companies in Malaysia

    Company Name Family Cover Travel Inconvenience Cover Terrorism Cover Medical Cover
    Etiqa Yes Yes Yes Yes
    Tokio Marine Yes Yes Yes Yes
    Great Eastern Life Yes Yes No Yes
    Berjaya Sompo Yes Yes Yes Yes

    What is an Insurance?

    An insurance policy is a commitment made between you and an insurance provider. You agree to pay the premiums at a set interval—monthly, quarterly, half-yearly, or yearly. The insurance provider provides you with a lump sum when an unfortunate event occurs, such as death and permanent disability for life insurance; loss/damage to your car in case of motor insurance; and damage to your home or home content in case of home insurance.

    What is a Takaful Coverage?

    Takaful is the Islamic version of an insurance that works based on the Shariah principles. The main concept of takaful is harmony and shared responsibility among the customers. All the customers are required to take up responsibility in case one of them is suffering a loss as described in the policy document.

    In short, all the customers must contribute to a common fund. In case a customer is suffering a loss as per the pre-agreed events, a share of the common fund will be provided to that customer as a compensation.

    Difference between Conventional Insurance and Takaful Coverage

    Factor Conventional Insurance Plans Takaful Plans
    Influencing Laws Government laws. Shariah and government laws.
    Basic Principle Commercial factors. Mutual cooperation.
    Profit and Risk Sharing Profits and risks are completely handled by the insurance provider and the shareholders. They are not shared with the customers. Profits and risks are equally shared by the customers and the takaful providers.
    Investment of Funds The funds collected from the customers can be invested in any investment channels. The funds collected from the customers can be invested only in Shariah-compliant investment channels.

    Basic Principle of Takaful Cover

    • The takaful coverage works on the basic principle of trust because you are required to reveal all the information asked for.
    • The takaful products do not provide you with any profit. However, they help you recover from the financial loss you have been through.
    • The takaful provider reserves the right to recover a compensation from the third-party responsible for your financial loss.
    • If you have subscribed for protection with multiple takaful/insurance providers, then the

    Types of Takaful Coverage

    • General Takaful:
      • Home Takaful: Home takaful comes in two variants—house owner and the occupant’s’ takaful. The former offers protection to the house and other related permanent fixtures against damage from natural disasters. In another case, the latter covers the loss/damage to the contents of the house.
      • Motor Takaful: A comprehensive motor takaful plan provides coverage against loss/ damage to your vehicle due to theft, accident, or fire. Some takaful policies cover the damage caused to third-party vehicles and bodily injury caused due to an accident and they are called a third-party cover.
      • Personal Accident Takaful: A personal accident takaful plan provides benefits to your family in the case of injuries, death, or disablement caused due to an accident. The policy can be taken for you; you can also include your family under protection.
    • Family Takaful:
      • Retirement Annuity: The takaful plan provides you with regular monthly income when you retire from your duties.
      • Investment-linked Takaful: The plan offers protection and investment benefits based on the premium you pay. You can choose the coverage and the investment amount. You can also vary the amount you pay for the two components based on your affordability. The policy allows you to claim the investment-related benefits at any time.
      • Child Education Takaful: The policy is meant to make long-term savings so you can afford to finance the higher education expenses of your child. The plans are designed to take care of your child’s education.
      • Health Takaful: When you think the medical treatments are expensive, the policy comes to your rescue. A health takaful plan takes care of your medical treatment, hospitalisation, surgery and other expenses. You may also get coverage for certain critical illnesses with the policy.

    Top Life Takaful Providers in Malaysia

    Company Name No Lapse Guarantee Basic Sum Assured on Death/TPD Investment-Linked Insurance Premium Top-Up Facility Guaranteed Maturity Benefit
    AmMetLife No Yes Yes Yes Yes (Investment account balance only)
    Sun Life Malaysia No Yes Yes Yes Yes
    Zurich Malaysia No Yes Yes No Yes

    Top Health Takaful Providers in Malaysia

    Company Name Hospitalisation Expense Cover Surgical Expense Cover Critical Illness Cover Post-Hospitalisation Cover Outpatient Treatment Cover Overseas Treatment Cover
    Great Eastern Takaful Yes Yes Yes Yes No Yes
    Sun Life Malaysia Yes Yes Yes Yes Yes No
    Zurich Malaysia Yes No Yes No No Yes
    Syarikat Takaful Yes Yes No Yes Yes Yes

    Top Personal Accident Takaful Providers in Malaysia

    Company Name Accidental Death Cover Accidental TPD Cover Third-Party Cover Renewal Bonus
    Syarikat Takaful Yes Yes No No

    Top Motor Takaful Providers in Malaysia

    Company Name Comprehensive Cover Third-Party Cover Fire and Theft Cover Passenger/Pillion Cover No Claims Benefit
    Etiqa Yes Yes Yes Yes Yes
    Zurich Malaysia Yes Yes No Yes Yes
    Syarikat Takaful Malaysia Yes Yes Yes Yes Yes

    Top Home Takaful Providers in Malaysia

    Company Name House Owner’s Insurance Householder’s Insurance Fire Cover
    Zurich Malaysia Yes Yes Yes
    Syarikat Takaful Yes Yes Yes

    Top Travel Takaful Providers in Malaysia

    Company Name Family Cover Travel Inconvenience Cover Terrorism Cover Medical Cover
    Etiqa Yes Yes Yes Yes
    Syarikat Takaful No Yes No Yes

    Why You Should Buy Insurance Online?

    • You don’t have to visit the branch and wait in a queue for your turn if you buy the policy online.
    • You can check all the available options and compare their pros and cons before you settle down with which policy you want to purchase.
    • The premiums you pay turn out to be cheaper online than the premium you have to pay for the same policy offline. Online application cuts down on several other expenses to the insurer, such as the commission payable to an agent and the distribution channel expenses.
    • The online application form and the electronic version of the supporting documents makes the online application process hassle-free. You do not have to submit any papers.

    How to Apply for General Insurance

    Insurance Agent
    • Get in touch with an insurance agent working for the insurance company of your choice.
    • Find out the details about the right insurance policy for you.
    • Fill up the application form.
    • Submit all the required documents to the insurance agent.
    • Your application will be processed and you will be notified of the insurer’s decision.
    Customer Service
    • Choose an insurance company to buy the insurance policy.
    • Call up the customer service number.
    • Enquire about the application procedure to buy the policy of your choice.
    • Follow the instructions and apply for the policy.
    Branch Office
    • Visit the nearest branch office.
    • Discuss with the staff on the insurance policy you wish to buy.
    • Fill up the application form and attach the required documents.
    • Submit the application to the branch.

    How to Apply for Takaful Cover

    Branch Office
    • Visit the nearest branch office of the takaful provider.
    • Enquire about the takaful cover you wish to buy.
    • Fill up the application form and attach the required documents.
    • Submit the application to the branch.
    Customer Service
    • Check if your takaful provider considers application through customer service channel.
    • If yes, then call the customer service and express your interest to buy the takaful cover.
    • Follow the procedure advised by the customer service personnel.
    Takaful Agent
    • Figure out the contact details of a valid takaful agent working for the takaful provider of your choice.
    • Contact the agent and get to know more about the product and the application process.
    • Fill up the application form and attach the required documents.
    • Submit the application to the agent.
    • The agent will pass-on your application to the takaful provider.

    How to Apply for Insurance Online

    • Decide on the policy you want to purchase.
    • Visit the insurance provider’s website.
    • Open the policy page that you want to purchase.
    • Fill up the online enquiry form and submit.
    • A representative from the insurance company will give you a call to discuss the policy.

    Conclusion

    Since there are multiple options available in each insurance category, you have to do a detailed research before settling down with the right insurance policy for you. Try to go with the paperless mode of application to have a hassle-free experience. It is recommended that you have to read the policy document thoroughly before you sign on the document. If you have any query regarding the policy, you can contact the insurance agent or visit the branch office and get your queries clarified.

    As the insurance is usually a long-term commitment, you have to be sure that you can afford paying the premium throughout the premium payment tenure. If you don’t pay the premium within the grace period, the policy may lapse.

    FAQs

    Q. Which insurance provides repatriation expense cover?

    A. You can get a repatriation expense cover when you buy a travel insurance policy.

    Q. Can I purchase multiple health insurance policies from different insurers?

    A. Yes. You can buy multiple health insurance policies from different providers. When you make a claim, the insurers may communicate and disburse the claims in proportion.

    Q. What should I do if my comprehensive insurance policy does not cover critical illnesses?

    A. If your comprehensive insurance policy does not cover critical illnesses, then you can buy a critical illness rider to complement your current policy.

    Q. Are there dedicated insurance policies for cancer?

    A. Yes. A few insurance providers offer policies dedicated to cancer treatment.

    Q. Can I make a claim to get the expenses of repairing a broken window glass?

    A. Yes. Some insurance companies accept claims to repair a worn-out window glass.

    Latest News About Insurance

    • Malaysia’s Insurance Industry's Consolidation Looks Tough

      The consolidation of Malaysia's insurance sector is unlikely to take place soon due to problems within the industry. In September, the central bank requested insurance companies to consolidate in order to improve performance and to enter new markets.

      As per Bank Negara's data, currently, there are 47 companies in Malaysia that are into insurance. These include 13 life insurers, 21 general insurers, 12 takaful operators, and 1 company that provides both general and life insurance. Foreign insurance companies have around 76% stake of the insurance market.

      All these insurance companies are catering to 32 million Malaysians. Moreover, insurance contributes a meagre 1.7% of the country's GDP. Currently, the national insurance penetration rate is at 56%. The central bank's objective is to increase this rate to 75% within 2 years.

      Comparing all insurance sectors, there is a noticeable increase in the medical and health insurance market. The rate is currently at 15.4% and will increase further in the near future. According to an analyst, consolidation of the industry is the best way to resolve problems with the low insurance penetration rate.

      Apart from low penetration rate, problems with valuations and issues with stakeholders are other reasons that delay the insurance industry’s consolidation.

      BBazaar Malaysia

      15 October 2018

    • Partnerships in the insurance sector key for improving Malaysia’s economy, says BNM

      Bank Negara Malaysia (BNM) stated that insurance industry players should collaborate and help improve the performance of the insurers in a bid to develop the nation’s economy. The BNM governor Datuk Nor Shamsiah Mohd Yunus, in her keynote address at the Malaysian Insurance Summit 2018, noted that insurance and takaful companies help keep the market stable.

      She opined that insurance companies should form partnerships to improve their performance and enter new markets. Insurance currently contributes to 1.7% of the country’s GDP and 5.8% of financial assets. Domestic insurance has not been able to penetrate well into the country’s economy, and total premiums to GDP contributes to only 4.8% in the last few years. The Malaysian health and medical insurance market had the highest average medical gross inflation at 15.4% in 2018.

      Nor Shamsiah also suggested that there is a need to build a more customer-friendly experience and simplify their products. Direct distribution channels, such as online and mobile platforms, will also lead to an increase in the use of the number of insurance products.

      BBazaar Malaysia

      01 October 2018

    • Insurance and Takaful Sector Sees Strong Gains in the First Half of 2018

      According to Bank Negara Malaysia’s (BNM) mid-year performance report, the insurance and takaful sector grew by +630 base points and the post-stress Capital Adequacy Ratio (CAR) stood above the 130% mark. Riding high on a strong capital position and sound profitability, the industry continued its exponential growth in the first half of 2018.

      The growth in the industry has been driven by a rise in credit-related takaful and insurance products and new protection policies being distributed through direct channels. Gross direct premium of the medical and health segment also increased by +9% year-on-year. This rapid growth is due to the high inflation rate being witnessed by Malaysia’s medical and healthcare sector. On the other hand, insurance and takaful within oil-related businesses contributed just 5% of the total gross direct premiums. But experts believe that there is scope for growth as global oil prices continue to recover.

      The report also highlighted the increase in Islamic financial products and the untapped potential of non-Muslim market as the reasons for projected growth in the second half of the year. Experts have picked Syarikat Takaful Malaysia Keluarga Bhd as the most promising takaful provider to watch out for.

      BBazaar Malaysia

      27 September 2018

    • BNM releases statement on financial stability review

      Bank Negara Malaysia reported that financial stability in Malaysia has been unchanged in the first half of 2018. Positive liquidity and funding conditions, supported by the growth of financial institutions have led to more financial intermediation activities.

      The excess liquidity in the banking sector of the country is at RM156.2 billion. Efforts to include stable medium-term debt instruments has led to diversification of the funding base for banks. Around 75% of new housing loans have been approved for applicants with debt service ratios of less than 60%. The ratio of household debt-to-GDP is currently at 83.8% in Q2 of 2018. Malaysian non-financial corporations (NFCs) have also remained steady in the first half of the year. Even with the aggregate leverage of NFCs increasing in this period, the positive debt servicing capacity of firms have helped it maintain balance.

      Insurance and takaful sector have recorded a positive growth of 2.2% in this period. New insurers and family takaful operators have recorded 7.7% growth in the period, mainly due to an increase in credit-related insurance and takaful products along with housing loans. Even under severe domestic and global instabilities, BNM is expected to retain a positive growth in the future.

      BBazaar Malaysia

      26 September 2018

    • Relief for foreign insurers in divestment options in Malaysia

      Bank Negara Malaysia (BNM) has announced that the foreign insurers shall be allowed flexible divestment options. Foreign parties will now be allowed to reduce their stakes to 70% from earlier 100%. The deadline for reducing the stakes are now to be mutually decided upon by BNM and the insurer, said the central bank’s Governor Datuk Nor Shamsiah Mohd Yunus. This would provide more options for the foreign insurers to reduce their stakes.

      The move aims to encourage long-term economic gains and also increase the rate of insurance usage in the country. The BNM is also hoping to provide faster and flexible solutions for insurers. This is important since the divestment options for some insurers are much more complex than the others.

      All foreign insurers have been covered under this plan. Currently, 11 insurance agencies are completely owned by foreign firms, including Great Eastern, AIA, and Tokio Marine. Additionally, five foreign insurers are reported to be in negotiations with domestic investors for covering 30% of their stakes.

      BBazaar Malaysia

      22 August 2018

    • CHI thinks that the proposed social health insurance scheme is rigid

      A think tank called the Citizen's Health Initiative (CHI), which propagates the involvement of citizens in healthcare policies, has brought a proposal to the Council of Eminent Persons (CEP) titled “The Way Forward for Healthcare in Malaysia”.

      According to the group's statement, the introduction of voluntary health insurance is regressive, as the country already has a tax-based financed public healthcare system in place. As per the current healthcare system, the tax-revenue financing comes from the revenue from the Treasury funds and that the government collects. Social health insurance includes compulsory contributions from salaried professionals, their employees, the self-employed, as well as government servants.

      Dr Lee Boon Chye, Deputy Health Minister, had said earlier that there is a need to introduce social health insurance in the near future to cover all Malaysians as far as healthcare is concerned. He said that it would not be more than 5% of the person's monthly salary, and much lower for lower income groups. Additionally, the government is looking to provide free insurance coverage for B40 which is expected to be rolled out by the budget for the upcoming financial year, just before introducing a social health insurance.

      BBazaar Malaysia

      16 August 2018

    • PruBSN Bags Best Takaful Company in Asia Award

      Prudential BSN Takaful Berhad (PruBSN) has won the Best Takaful Company in Asia award, during the International Takaful Awards that were distributed in London. Along with this prestigious award, the company has also secured an array of other awards recently that include, Insurance Company of the Year, Editors' Triple Star, Triple A Islamic Finance Awards in Malaysia, and Best Takaful Institution at The Assets’ Triple A Institutional Investor and Insurance Awards in Hong Kong.

      Talking about the recognition, Nor Azman Zainal, CEO of the company said that the company is committed to offer various products with the help of new and exciting methods so that a customer’s experience can be improved..

      Among other honours that the company has pocketed this year are, a Silver for Best Idea Integrated Media at the 2018 MARKies Malaysia Award and a Gold at the 2018 APPIES Malaysia Award.

      BBazaar Malaysia

      09 August 2018

    • Takaful Malaysia Sees Growth in the Second Quarter

      Takaful Malaysia (Syarikat Takaful Malaysia Keluarga Bhd) has witnessed a notable 11.9% boost in its year-on year (YoY) net profit in the second quarter of 2018. The 2Q18 ended on a good note for the company with an increase in its turnover and net wakalah income.

      Against the net profit of RM45.07 million in the previous year, the takaful operator has witnessed a net profit of RM50.42 million this year in the same quarter. The revenue has also reached to RM542.43 million, increasing by a decent 11.8%.

      Takaful Malaysia has stated that the boost in the revenue was a result of higher sales of its general takaful and family takaful businesses. The growth in these both sectors assisted offset the fair value losses that were experienced by the company.

      The family takaful division is noted to be benefitted from credit-related products that took the gross earned income to RM350.2 million. Similarly, general takaful sector’s gross earnings rose to RM160.3 million and net benefit also went to RM59.5 million, in 2Q18.

      The company now will try to sustain its top position in the family takaful business and also will focus on expanding its general takaful division. Reports also stated that the company is planning to increase its digital capacity to reach to more number of customers.

      BBazaar Malaysia

      30 July 2018

    • Ambank Not Selling Off Its General Insurance Business: CEO Tahir

      Amid all the speculations and market talks about the parting with its general insurance business, AMMB Holdings Bhd has stated to have no such intentions to sell off the business as of now.

      Datuk Sulaiman Mohd Tahir, chief executive officer of the bank recently said that there is nothing on the table of that sort for the company. It has been speculated that in the past few weeks, AmGeneral Insurance Bhd has been in discussion with some local and foreign insurance companies to be the likely suitors. However, this statement by Datuk Tahir has put a full stop on these assumptions. He also said that the company is working hard to stay focused and enhance its performance.

      AmBank holds a stake of 51% in AmGeneral, and remaining 49% is held by Australia’s top general insurer, Insurance Australia Group Ltd (IAG). Several media reports surfaced recently talking about IAG’s plans to sell off its four Southeast Asian Businesses.

      Among all these developments, all eyes are set on AmGeneral Insurance Bhd and its course of action in the coming times.

      BBazaar Malaysia

      30 July 2018

    • LIAM Expects Government Support to Achieve the Insurance Penetration Goals

      The Life Insurance Association of Malaysia (LIAM) desires that the new government will continue to encourage insurers and Takaful providers. LIAM made the statement with the context of achieving its goal of insuring 75% of the Malaysian population by the year 2020.

      Anusha Thavarajah, President, LIAM says that the penetration rate of insurance and Takaful products is at 56%, out of which only 32% of Malaysians own more than one policy. She says that a growth is expected in the current year, provided that the support towards the industry continues as is.

      Recall that LIAM and Bank Negara Malaysia together launched about 10 new affordable plans under Perlindungan Tenang in November 2017. The combo has been trying to create public awareness on the need for insurance/Takaful coverage for individuals and their families.

      Anusha also insisted that more insurers and Takaful providers must participate in the Perlindungan Tenang—Mampu & Mudah, plans that focus on the B40 group. She says that only 6 companies have been offering the Perlindungan Tenang plans currently.

      BBazaar Malaysia

      03 July 2018

    • Prudential Files For a Listing of Its Malaysian Unit

      In order to reduce their stakes of their Malaysian unit, UK insurer, Prudential Plc has filed a potential listing of one of its subsidiaries, a Malaysian IPO. This listing has the potential to raise approximately $700 million.

      The decision to go forward with the listing is not yet finalised as the the company is still looking at other options like finding a reliable buyer who could purchase its minority stakes.

      This move was a result of Bank Negara's request to overseas insurers to cut down their holdings in Malaysian firms to less than 70%. Prudential could wait for the new governor of Bank Negara, Datuk Nor Shamsiah Mohd Yunus, to be appointed before proceeding with its decision.

      According to Prudential, the company strictly follows the local rules in countries it operates. Though the company has not commented on its IPO plan, it is committed to serving the savings and protection needs of Malaysians.

      BBazaar Malaysia

      02 July 2018

    • Bank Negara to Grant Extension to Foreign Insurers

      The central bank of Malaysia, Bank Negara, plans to give some foreign insurers more time to adhere to the ownership limit requirements. This extension is subject to them proving that they have solid plans in place that show progress in their divestment plans.

      In the recent past, overseas insurers have been requested by Bank Negara to cut down their stakes to 70% or less by 30 June 2018, so that they comply with the ownership limits.

      The central bank is in talks with the insurers to reduce their holdings in Malaysian units. The new Governor of the bank, Nor Shamsiah Mohd Yunus was briefed about the situation and the current developments.

      Many overseas insurers like Zurich Insurance Group AG, Prudential Plc, Great Eastern Holdings Ltd, and Tokio Marine Holdings Inc are working with their teams to cut down their respective stakes, and thereby adhere to the limit set by the central bank.

      BBazaar Malaysia

      29 June 2018

    • Zero Percent GST on Insurance and Takaful Products

      The Malaysian Takaful Association, General Insurance Association of Malaysia, and Life Insurance Association of Malaysia have all come up with an announcement that spells good news for all those who pay life insurance and general insurance premiums.

      Goods and services tax (GST) on takaful, life insurance, and general insurance policies will be zero percent from here on. The 0% GST policy will be effective from 1 June 2018. Previously, there was a GST of 6% being imposed on all insurance and takaful products.

      The change in GST rates was made in compliance with the declaration made by the Ministry of Finance and Royal Malaysian Customs Department.

      BBazaar Malaysia

      04 June 2018

    • BNM: Foreign Investors Must Divest From Domestic Insurance Companies

      Bank Negara Malaysia (BNM) states that between 2008 and 2017, over RM16.5 billion in the form of dividends has been earned by foreign insurers. Also, during the period between 2014 and 2016, these foreign insurance companies have repatriated over RM1.3 billion in management fees and outsourcing arrangements. As a result, BNM has asked them to divest their shares in the insurance companies.

      The foreign investment into insurance industry was accepted only to improve the domestic insurance companies. But, there is no significant improvement seen in the domestic companies as yet. Only a minimal improvement is seen in terms of market penetration as the width of the product range is not up to the expectations, especially for low-income earners.

      BNM is ready to accept any initiatives from insurers to improve the Malaysian economy. BNM also says that the foreign companies were asked to make certain commitments to get the license. However, they have not stood on their commitments over the past years.

      BBazaar Malaysia

      19 April 2018

    • Syarikat Takaful Malaysia is Expanding Digitally

      Syarikat Takaful Malaysia Bhd (STMB) is targeting for a higher growth in the financial year 2018. The company is also focussing on expanding the digital platforms contributions into this growth swiftly. STMB is targeting 10% to 15% growth for the year 2018. The growth in the last financial year reached up to just 5.2%.

      However, the online sales contribution has been on the higher side. From RM200,000 per month when it started 2 years back, the current contribution stands at RM2.2 million per month. Also, earning per share is forecasted to rise from 1% to 2% in the coming financial year. While the other income projections of the company stand between 19% and 21%.

      The company is looking at an expansion of contribution from digital platform. One of the risks involved may be the deceleration in growth of family takaful contributions that will be caused by steep increase in operating costs and intensified competition.

      BBazaar Malaysia

      16 April 2018

    • CIMB to Distribute Sompo’s Bancassurance Products

      Recently, CIMB Group Holdings Berhad has entered into a bancassurance partnership with Sompo Holdings (Asia) Pvt Ltd. As a part of the partnership, CIMB will play an important role in distributing Sompo’s non-life insurance products in Malaysia.

      As per Sompo’s Malaysian establishment, Berjaya Sompo Insurance Berhad (BSIB), CIMB will distribute the non-life insurance products to its individual and corporate customers through its various modes such as online platform, call centres, and branch offices. For the retail sector, CIMB will distribute insurance products for motor, travel, home, and personal items, whereas for corporate customers, a cover is provided on group benefits, engineering, liability, property, and marine credit.

      Both the parties’ digital advancement has given rise to an app-enabled travel insurance available on CIMB’s chat-banking app, Enhanced Virtual Assistant (EVA). Retail customers of Malaysia can now buy travel insurance online.

      In addition to Malaysia, CIMB also distributes Sompo’s products in Singapore, Indonesia, and Thailand.

      BBazaar Malaysia

      16 April 2018

    • CIMB Puts Forth Its Targets For The Year 2018

      CIMB Group has announced its goal of reaching RM200 million non-life insurance premiums this year. An insight here is that CIMB has entered into a 15-year partnership with Sompo Holdings Asia Pvt Ltd in order to market Sompo’s non-life insurance products. CIMB has been selling the non-life insurance policies in Singapore and Indonesia for the past 2 years. In Malaysia, the policy distribution began in August 2017.

      The local entity of Sompo Holdings is called Berjaya Sompo Insurance Berhad. They provide fire insurance, mortgage-related insurance, motor insurance, fire insurance, snatch theft policies, etc.

      Speaking about the response rate in Malaysia, Samir Gupta, CEO of Group Consumer Banking said that they have collected RM22 million in the last quarter of 2017. He also shared that they have achieved 20% of the year’s target in the first 2 months of 2018.

      CIMB believes that the partnership takes the bank’s value to a new proposition and benefits the bank’s customers across south-east Asia.

      BBazaar Malaysia

      15 April 2018

    • BNM’s Policies and Their Contribution to Insurance Industry

      Recently, Bank Negara Malaysia (BNM) had brought about some new policies in order to take the insurance and takaful industry to new heights. Some of these new policies include the introduction of Perlindungan Tenang, the implementation of Balanced Scorecard, using direct distribution channel for sales, the implementation of a free-pricing mechanism for general products among the others.

      A research wing of MIDF Amanah Investment Bank Berhad, MIDF Research, has stated that the BNM’s measures have played a crucial role in developing the industry. The research institute points that the life insurance and the family takaful witnessed a growth of 5.8% year-on-year (y-o-y) in terms of new premium and policies, in the year 2017.

      Further, the study says that the life insurance and family takaful products contributed about 64.8% of the total new premiums bought in the year 2017. The overall penetration rate of these products is at 36.5% and has increased by 2 percent as compared to the previous year. Therefore, these products are expected to have the same popularity with increased sales in 2018 as well. The recovery of oil and gas sector is also expected to add a positive momentum to the general insurance sector.

      BBazaar Malaysia

      15 April 2018

    • Agents and Technology Come Together To Build Insurance Sector

      With the advent of technology, a major part of our lives has become simple and easy. The technology advancement has also given a golden touch to the banking and insurance sectors. It has led to performing most financial operations from the comfort of your house with the help of internet. The insurance industry is not devoid of this facility. You can purchase or renew your insurance policy via your personal computer.

      Since online platforms are performing the tasks of insurance agents, the consumer can now directly deal with the insurer. The agent’s commission now takes the form of discount for the consumer.

      Speaking about the importance of owning an insurance policy, Ann Choo, an insurance agent of AIG Malaysia says that the public is welcoming the practice of purchasing insurance policies in recent times. One of the reasons for this trend is that the insurance companies have been redesigning their policies to cater the needs of individuals as much as possible. Choo says that though people are educated they still need the guidance of the agents.

      Therefore, agents like Choo believe that they can co-exist with the dynamic advancements in technology and strive to build the insurance industry to greater heights.

      BBazaar Malaysia

      13 April 2018

    • Foreign Insurers Wants BNM to Review its Local Ownership Rule

      Following an intervention from the US government, American International Group (AIG) and AIA, the two big insurers are reportedly reluctant to comply with the central bank’s order on local ownership. However, the opposition to the proposal came up during bilateral talks that took place between Kuala Lumpur and Washington recently.

      Earlier in 2003, the AIG group managed to receive an exclusion from former Prime Minister, Mahathir Mohamad, prior to stepping down from the post. The Malaysian government officials now claim that both AIA and AIG are maintaining that the exclusion granted should remain unchanged.

      In April 2017, Bank Negara laid down certain deadlines that urged foreign insurance companies to give away at least 30% interest in their operations to the local investors.

      Meanwhile, the officials from the foreign insurers did not want to discuss their divestment plans though companies like Prudential, Great Eastern, as well as Tokio Marine, were said to be searching for their local partners actively.

      While Great Eastern has already identified Employees Provident Fund as its local partner and is currently negotiating to close the deal as soon as possible, Prudential Assurance Malaysia is currently in talks with Kumpulan Wang Persaraan. If all goes well, then the two parties would crack a deal before April end.

      BBazaar Malaysia

      26 March 2018

    • Bank Negara Malaysia Plans Revise Takaful Framework for Clarity

      The Central Bank of Malaysia is all set to reinforce the country’s takaful industry to foster innovation and bring in more clarity on how to use several Shariah standards.

      Governor Tan Sri Muhammad Ibrahim confirmed that the revised framework would be made open to the public and the industry within mid-2018 so that they can provide their feedback.

      He further added that the government has plans to strengthen the power of takaful operators to protect the interest of takaful participants.

      On the issue of 25% family takaful penetration by the year 2020, Muhammad commented that though it is an ambitious project, it is achievable, and he is hopeful that by 2020, they can make 16% progress.

      On the other hand, the fact that takaful is yet to realise its full potential as it has not migrated to e-payments is a cause for concern, according to Muhammad Ibrahim. He revealed that Bank Negara was very close to finalising all the changes to the regulatory framework that would eventually allow online product aggregators to operate with access to the takaful market by the end of 2018.

      He was saddened by the fact that takaful operators were dwarfed by the conventional operators and if they do not shape up yet, they will soon become non-existent.

      BBazaar Malaysia

      26 March 2018

    • BMW X2 Targets ‘Cool Rebels’

      BMW Malaysia is all set to introduce BMW X2 in Malaysia. CEO and managing director, Harald Hoelz said that the company wants to bring fresh life to the existing BW X series with the all new BMW X2. The first-ever Premium Sports Activity Coupe has been designed for the ‘Cool Rebels’ who wants to challenge the societal norms, he further added.

      BMW X2 was available for pre-booking till March 20. Successful applicants who pre-booked BMW X2 online and raised funding for it through BMW Financial Services will get an opportunity to win an exciting trip to Southern Hemisphere Proving Grounds. Also, the lucky winner of the programme will be awarded with Assurance Shield Programme - a life insurance product.

      Apart from this, winners will also get to enjoy a helicopter ride, ice diving, drag racing, and more.

      BBazaar Malaysia

      21 March 2018

    • Bank Negara Asks Foreign Investors To Stay True To Their Commitments

      Bank Negara Malaysia asked foreign insurers to commit more to their local units by rationalising their stakes. The bank stated that this was not a new rule that’s going to be imposed on foreign insurers.

      According to reports, the statement is based on certain commitments which the foreign insurers had pledged while stepping their feet in the insurance sector. This statement from the central bank comes right after the news of Prudential Malaysia to sell 30% of stake to KWAP broke out.

      Foreign insurers are required to cut their stakes in order to initiate local participation in the insurance sector. However, as per reports, the percentage of share that’s supposed to be sold depends on foreign insurers’ commitment to Bank Negara Malaysia during the time of their entry to the market.

      There are rumours floating around that the foreign insurers have to sell at least 30% of their stake. Industry analysts are also expecting to see more of acquisitions and mergers as a bid to sell stakes.

      BBazaar Malaysia

      12 March 2018

    • Prudential’s Malaysia Unit In Talks With KWAP For 30% Stake Sale

      According to reports, Prudential PLC’s Malaysian unit is in talks with Kumpulan Wang Persaraan (KWAP) to sell a 30% stake valued at US$435 million. Though the deal is not exclusive and yet to be confirmed, reports suggest that the deal could be finalised any time soon.

      Last year, a directive was issued by Malaysia’s Central Bank that asked foreign insurers to downsize their stakes in local units by 30%. Following this development, several foreign insurers, including Prudential, Zurich Insurance Group, and Tokio Marine Holdings are in a rush to downsize their stakes. The Malaysian units are expected to submit their plan before June.

      Wan Kamaruzaman Wan Ahmad, the CEO of KWAP said the Malaysian pension fund has submitted an offer in response to Prudential’s 30% stake claim. However, he didn’t disclose the details concerning the deal. On the other hand, Prudential refused to comment on the discussion, but said that they are committed to its local business.

      The new rule initiated by the Central Bank has invoked a sense of concern among foreign insurers. According to reports, other than Prudential, many foreign insurers in Malaysia are in a rush to reduce their stakes.

      Prudential’s Malaysian unit is estimated at a value of about RM5.5 billion.

       

      BBazaar Malaysia

      7 March 2018

    • Takaful Malaysia Ventures Into Digital Insurance Market

       

      Syarikat Takaful Malaysia Bhd (Takaful Malaysia) ventured into the digital insurance sector with its online portal - “Click for Cover”. According to reports, the Malaysia-based takaful company with its new digital launch, expects a 20% to 25% boost in its online sales.

      Datuk Seri Mohamed Hassan Kamil, the group’s chief executive officer (CEO) said that the portal will allow customers to buy insurance products conveniently. E-payment facility coupled with new products, including term life insurance and critical illness insurance, will contribute to sales growth, he further said. Click to Cover has been designed to attract millennials to buy insurance products.

      However, the company’s agency force will continue to flourish as there are certain products which might require advisory services, he added.

      Setting its foot in the digital insurance market, the company also signed a partnership with Fusionex International and ReMark International – a data technology service provider and digital insurance marketing agency respectively.

      BBazaar Malaysia

      7 March 2018

    • RAM Expects Mixed Growth for the Malaysian Insurance Industry

      RAM Ratings, Malaysia’s premier ratings agency, has projected a flat growth pattern in 2018 for general insurance premiums and takaful contributions in the country. The agency said that much of this is because of increased competition, inconsistent consumer behaviour, and liberalised tariffs.

      The combined life insurance and family takaful segments were expected to grow well as consumers are more aware and welcoming to the idea. But, RAM did add that the takaful segment will outgrow the conventional insurance sector owing to increased awareness and education among Muslims who make up the majority of the population.

      With the economy growing at a stable rate and multiple reforms being implemented throughout the insurance sector, RAM expects insurers to develop gradually and be more sustainable in the long run. However, the new reform measures could hold the entire industry back in the short term in terms of profitability.

      In spite of the insurance sector’s underwhelming growth, the general insurance and takaful segments in particular are expected to perform consistently if there are no natural calamities or catastrophes.

      With the Overnight Policy Rate (OPR) being increased recently, life insurers and takaful operators can now make the most of a hike in interest rates. But, such relief, if any, will depend on the company’s investments, contractual obligations, and asset-liability management.

      BBazaar Malaysia

      7 March 2018

    •  
    • Insurance Industry and the Path of Growth

       

      The Malaysian government has been lately concentrating on the various ways to popularise the benefits of having insurance coverage in all possible fields such as medical, educational, property, etc.

      Datuk Seri Johari Abdul Ghani, Finance Minister of Malaysia said that the need of the hour is to focus on strengthening the distribution channels for insurance products. Also, he said that they are looking for ways to make the insurance products more affordable to citizens with average income.

      While many developed countries have made insurance a mandatory necessity, Malaysia hasn’t reached that mark yet. The minister expressed that if the insurance products are made more affordable, it will lead to full coverage for everybody.

      Since the healthcare cost has been increasing every year, it is expected that the demand for health insurance will drastically increase soon. Also, there are plans to digitise the insurance industry. This may lead to a rise in the industry in terms of penetration and volume. As part of the growth, Takaful Malaysia has launched ‘Click for Cover’ online portal where you can purchase the motor, personal accident and medical coverage. They are planning to launch more products on the portal in the near future.

      BBazaar Malaysia

      7 March 2018

    • KWAP to Acquire Stakes of Foreign-Owned Insurance Firms

       

      Kumpulan Wang Persaraan (KWAP), Malaysia's second-largest pension fund is all set to close a deal with a foreign insurance company to acquire its stakes, provided the interest rates are decreased. Ideally, the shareholders/insurers are expected to reduce 30% of the total interest by end of June this year.

      Datuk Wan Kamaruzaman Wan Ahmad, CEO of KWAP confirmed that they are in the discussion phase with two insurers but most likely they will end up the deal with one of them very soon. He further said that the idea is to expand investments into the insurance division.

      The Retirement Fund or KWAP is said to be looking forward to Singapore-based Great Eastern Holdings and Prudential Assurance Malaysia Berhad for their stake acquisitions.

      BBazaar Malaysia

      7 March 2018

    • Axiata To Invest RM200 Million In Digital Financial Services Industry

      Telecommunications giant, Axiata Group Bhd, is looking for potential acquisitions in the digital financial services sector. The sector includes advertising technology, financial technology, and Internet-of-Thing companies where Axiata wants to strengthen its base. The group is reportedly investing RM200 million for planned expansion in this particular sector.

      Tan Sri Jamaludin Ibrahim, the president and group chief executive officer (CEO) told the media that about two-thirds of the total sum will be used to strengthen the organisation’s operations in the country. The rest of the amount will be utilised to build up its base in Sri Lanka and Indonesia.

      Speaking to the media, he said that Axiata’s prime focus remains on BOOST, an e-wallet developed by the company. According to reports, BOOST has already set a target to acquire 100,000 merchants by the end of this year.

      Jamaludin also said that the company would gradually offer micro services catering to the financial services sector – remittance, savings, lending, payments, and insurance.

      BBazaar Malaysia

      1 March 2018

    • Foreign Insurers in Malaysia: The Reality of the Situation

      For a long time, Malaysia has been regarded as one of the most attractive markets for insurers in Asia. But, in a major hit to foreign insurers, Malaysian regulators have decided that overseas insurance companies need to sell at least a 30% stake to locally based insurers or as local IPOs by the end of June if they wish to comply with the latest foreign ownership regulations.

      For firms like AIA Group Ltd, Prudential Plc, Tokio Marine Holdings Inc, and Great Eastern Holdings Ltd, giving up a sizeable chunk of the domestic business can mean a major hit financially. Additionally, the local buyer pool is restricted to financial behemoths backed by the state, including Permodalan Nasional Bhd, Kumpulan Wang Persaraan (Diperbadankan), Khazanah Nasional Bhd, and Employees Provident Fund.

      While IPOs may be more encouraging, there’s no way for a foreign insurer to work successfully without partnering with a state-owned entity. Ultimately, if this rule is enforced strictly, foreign insurers could end up losing one of the more profitable Asian markets that has very few operational restrictions.

      BBazaar Malaysia

      22 February 2018

    • MFRS 9 to Usher Several Provisioning Methods

      According to the annual report of Perbadanan Insurans Deposit Malaysia (PIDM), the Malaysian Financial Reporting Standards 9 (MFRS 9), is expected to bring in multiple provisioning methods.

      Furthermore, the report also confirmed that the MFRS 9 would be responsible for the pricing of financial products, along with financial assets growth that aim to safeguard asset quality.

      This reporting standard is believed to have an influence on both banking and insurance industries. It replaced the existing MFRS 139, and brought about changes in financial assets (their classification and measurement) besides accounting for several changes in the credit risk in the areas of financial liabilities, hedge accounting, as well as impairment.

      Yet another regulatory growth is the implementation of the Basel III Net Stable Funding Ratio (NSFR). The central bank of Malaysia confirmed that the implementation date of NSFR would be 2 January 2019. Meanwhile, the MFRS 9 was implemented on 1 January this year.

      BBazaar Malaysia

      24 April 2018

    • IAG Has Decided to Sell Four Southeast Asian Businesses

      According to sources, Insurance Australia Group (IAG), the Australian Securities Exchange-listed multinational insurer has decided to sell all four of its Southeast Asian businesses as they posed as a challenge for IAG. The insurer has reportedly incurred a loss of A$6 million ($4.63 million) in Asia in the first fiscal half of this year.

      The Sydney-based general insurer has ventures in Thailand, Malaysia, Vietnam as well as Indonesia. Collectively, they are worth $500 million. It also has operations in the Indian subcontinent and owns about 16.9% stake in China’s Bohai Property Insurance Company Ltd.

      Meanwhile, according to the opinion of a spokesperson for IAG, the insurer has plans to review the Asia strategy, and not to exit the region completely.

      The Malaysian venture could be picked up by other insurers operating in Malaysia such as Maybank, Etiqa or Tokio Marine. This exit by IAG could free up to $621 million of capital within a few years.

      BBazaar Malaysia

      24 April 2018

    • KWAP Strikes A Deal To Co-Own An Insurance Company

      The Retirement Fund Inc (KWAP) plans on buying a stake in insurance companies owned by foreign investors. Datuk Wan Kamaruzaman Wan Ahmad, CEO, KWAP says that the deal is about to complete and the partner is looking to submit the proposal to Bank Negara Malaysia (BNM).

      Though KWAP has not revealed the name of the partnering insurance company, the company did mention that the initiative is in response to the latest policy passed by BNM. The policy says that the foreign investors’ stake must not be greater than 70%. BNM has stated that the foreign insurers such as AIA Berhad, Great Eastern Life Assurance Berhad, and Prudential Assurance Malaysia Berhad must sell 30% of their stakes to local shareholders by the end of June 2018.

      KWAP has also come forward to buy a stake in Prudential that is worth RM1.2 billion-RM1.5 billion.

      BBazaar Malaysia

      26 April 2018

    • Ensuring a Comprehensive Approach to Financial Planning

      Phang Kar Yew, the executive director of Harveston Financial Group, a wealth management company, has said that there’s an immediate need for financial planning solutions in Malaysia. With most wealth management professionals looking at this sector as nothing more than investments, most Malaysians end up being unaware of how to manage their assets efficiently.

      Such misinterpretations can directly lead to financial issues like unclaimed assets. Over the last year, the Registrar of Unclaimed Money announced that RM6 billion was left unclaimed. Even mature life insurance policies were left unclaimed because of a lack of proper financial planning.

      Mr. Phang Kar Yew also added that most high-net-worth Malaysians run diversified businesses. With a proper approach to financial planning and wealth management, these individuals will be able to comply with all financial rules set in place while still being tax-efficient.

      To do its bit in resolving this issue, Harveston Financial Group will organise a wealth management conference that focuses on pre-retirement and post-retirement financial planning. The conference will also focus on other aspects of wealth management, including insurance, health care, business succession planning, estate planning, and investment strategies.

      BBazaar Malaysia

      23 May 2018

    • Takaful Malaysia thinks Etiqa’s entry will boost Shariah-compliant market

      According to insurance giant Syarikat Takaful Malaysia Bhd, the prospect of Etiqa, Maybank’s insurance outlet, entering the local stock exchange market will help in increasing the liquidity of Shariah compliant products in the Malaysian market.

      Talking about the development, Datuk Seri Mohamed Hassan Md Kamil, CEO of the group said, “Etiqa being listed on the local stock market will create more opportunities for the investors and the market will also get Shariah-compliant insurance stocks. The entry of another public-listed Islamic company in the exchange market will help in boosting the liquidity.” He further stated that the move is helpful for Takaful Malaysia too as it will bring in more trading activities in the market.

      With capitalisation of more than RM3 billion, Takaful Malaysia currently is the biggest listed insurance firm on Bursa Malaysia.

      BBazaar Malaysia

      27 May 2018

    • Analysts Prediction: Takaful Overpowers The Conventional Insurance

      Analysts are creating a positive hope about Syarikat Takaful Malaysia Berhad. The growth trend of the group’s industry premium is soon going to outnumber the conventional insurance, as per the report. The research wing of Kenanga Investment Bank, Kenanga Research, has made the statement regarding the growth of Takaful Malaysia based on the factors of low penetration and a never-ending demand for Takaful products.

      Kenanga Research shares that the group will remain focused on adding more value to the segments—customer reach, cost competitiveness, operational agility, and maximising value to the shareholders. Working towards these objectives, the group has been using various marketing strategies, promotional offers, and rebates on its products to attract the right customers. The research arm predicts that the delivery of return on equity in the financial year 2018-2019 would be the highest in the industry.

      MIDF Research, the research arm of MIDF Amanah Investment Bank Berhad says that the group’s long-term strategy will help expand its influence on Takaful Malaysia in terms of the digital market. The group has launched new products in the digital platform recently. The research wing expects these new products to be effective enough in driving growth in the market. The products are expected to play a major role in offering better performance metrics such as reduced turnaround time.

      BBazaar Malaysia

      28 May 2018

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