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Sunday, 16 May 2010

News Posts 20100509-20100516

Insurance News Not quite clear on what Perwakim's proposal is, other than they are agreeable to RM2 mil cap; want premiums to remain unchanged while recognising that insurers are losing money by paying RM2.67 per RM1 premium; objecting to Newco jointly owned by government and insurers and upset that they were not consulted by BNM.
PETALING JAYA: Insurance agents have proposed that the Government allow the reintroduction of third-party motor insurance scheme.
May 16, 2010

Insurance News Prudential is likely to pull out of Australia, New Zealand, South Korea and Taiwan after its acquisition of AIA.
HONG KONG: Britain's Prudential Plc is expected to outline divestments of some Asian assets in its upcoming rights offering prospectus in an effort to appease shareholder concerns about its planned AIA acquisition, a source familiar with the process said yesterday...
May 15, 2010

Insurance News A very detailed history of OCA: 1) Merger of UOA and Capital in 2002. 2) Salcon, Usaha Tegas and a 3rd party interested to acquire OCA in 2007, deal did not materialise partly due to court injunction by Nesa Coop. 3) Some insights into operational issues faced by OCA in the recent years including inadequate HR and IT resources, poorly executed M&A and being put under watch list of BNM.
INSURANCE companies, like most financial institutions in this country, are tempting targets because they are a licensed business, which by implication means they are not easy to come by. Furthermore, it ...
May 15, 2010

Insurance News Bar Council has come up with its counter proposal for TPBID scheme. Features: 1) Revise the premiums that remain unchanged since 1978. 2) Maintain the current practice of letting courts decide on quantum of liability. 3) Shorten time period for claims by imposing time limits for obtaining documents from various parties & deadline for negotiations. 4) Regulate legal fees. 5) Fine-tune guidelines on quantum of awards. 6) Insurers to prepay part of claims monies to relieve claimant's hardship. 7) Address frauds and malpractices.
PETALING JAYA: The Bar Council is against the Bank Negara Malaysia’s proposed new basic motor insurance and submitted a memorandum to the central bank Friday.
May 15, 2010

Insurance News BNM has given approval to PacificMas to commence talks with Fairfax Asia on the disposal of Pacific Insurance. PacificMas is also currently in talks with Great Eastern Holdings.
KUALA LUMPUR: PACIFICMAS BHD has received Bank Negara Malaysia's approval to start talks with Fairfax Asia Ltd to dispose of its insurance unit, The Pacific Insurance Bhd.
May 14, 2010

Insurance News Prudential has finally got the approval from FSA.
HONG KONG (MarketWatch) -- Regulators in the U.K. have approved in principle Prudential PLC's $35.5 billion proposed buyout of American International Group Inc.'s life-insurance unit in Asia, AIA, with the U.K. company likely to soon price its delayed $21 billion right issue to help fund the acquisi...
May 13, 2010

Insurance News If you intend to submit your feedback on the proposed TPBID scheme to BNM and have not done so, tomorrow is the last day to do so.
PETALING JAYA: The Government is prepared to replace the third-party motor insurance with a new basic motor insurance, and the public has been urged to submit their feedback on the move to Bank Negara Malaysia by tomorrow.
May 13, 2010

Insurance News G Team priced OCA at RM102 mil, which is close to 1.5 times of its book value. OCA will also be sold off within 1 year in compliance with BNM's requirements.
KUALA LUMPUR: The offer price of 80 sen per Maika Holdings Bhd share made by G Team Resources & Holding Bhd is based on a book value of RM102mil for its main asset, Oriental Capital Assurance Bhd (OCA), as well as taking into account an assumed RM60mil liability at Maika itself.
May 13, 2010

Insurance News ISM wants motor insurance premiums to be determined based on risk factors. Currently motor insurance in Malaysia is tariff-rated.
KUALA LUMPUR: A risk-based approach to motor insurance and takaful is a more attractive proposition to commercial insurers as it will allow them to out-price their competitors, said ISM Insurance Services Malaysia Bhd chief executive officer (CEO) Carl Rajendran.
May 13, 2010

Insurance News MCA suggests that insurers should use profits from comprehensive motor insurance (RM1.6 bil) to offset losses in 3rd party motor insurance (RM970 mil). Couldn't figure out how MCA got their figures, but BNM's 2009 statistics show that the claims ratio for motor insurance combined is 80%. With commission of 10% and management expense ratio of 23%, there is no profit for motor portfolio in total. ISM's statistics also show combined ratios of 292.4% and 91.4% for motor act and motor others respectively. Perhaps PIAM would want to go to press to confirm whether MCA is right that insurers still making money out of motor insurance?
KUALA LUMPUR: Insurance companies should not increase third-party motor insurance premiums because it will burden the people, says MCA president Datuk Seri Dr Chua Soi Lek.
May 13, 2010

Insurance News G Team, an SPV, is serving notice to take over Maika. Maika owns 74.16% of Oriental Capital Assurance.
KUALA LUMPUR: CIMB Investment Bank Bhd has on behalf of G Team Resources & Holding Bhd (G Team) served a notice of take-over offer on the board of directors of Maika Holdings Bhd to acquire the 125 million voting shares in the company.
May 11, 2010

Insurance News Summary of Kurnia's Q1 results: 1) Higher pre-tax profits due to lower management expenses 2) Lower post-tax profits due to disallowed expenses for taxation 3) Small decrease in revenue 4) Non-motor insurance constitutes 22% of total business compared with 17% a year ago.
KUALA LUMPUR: Insurer KURNIA ASIA BHD's earnings fell 9.7% to RM23.81 million in the first quarter ended March 31, 2010 from RM26.39 million a year ago due to higher tax expenses.
May 11, 2010

Insurance News PIDM will come up with an insurance compensation scheme that will protect insurance and takaful policyholders similar to the way bank depositors are protected. Currently all bank deposits are fully guaranteed by government. This was introduced 1 year plus ago during the financial crisis. The full guarantee will expire end of this year and the proposal is to increase the previous guarantee of RM60,000 to RM250,000. Presumably policyholders will also enjoy the same RM250,000 guarantee.
KUALA LUMPUR: The government has proposed an insurance compensation scheme (ICS) for insurance and takaful policyholders, the Office of Minister of Finance said on Tuesday, May 11.

May 11, 2010

Insurance News The Boston Consulting Group released a report on life insurance in Asia lately. Among the points worth highlighting: 1) Growth pre-financial crisis was easy, now that capital is scarce and expensive, capital management is key. 2) Post-crisis is a good time to negotiate for agency compensation and bancassurance tie-ups. 3) MNCs have been losing market share to the local companies since 2006. 4) Consumers trust in distribution channels has eroded post-crisis. 5) Shift from ILP to traditional products post-crisis. The full report of 11 pages can be downloaded here:
THE competitive dynamics of the life insurance sector in Asia are much altered and insurers are being forced to rethink how and where they compete in the region. In order to prevail in the post-crisis era, they will have to take bold steps to increase market share and enhance profitability.
May 10, 2010

Insurance News Prudential's CEO Tidjane Thiam is now facing pressure from some shareholders who called for his resignation over the delay in the takeover of AIA.
Prudential Plc Chief Executive Officer Tidjane Thiam faces calls to resign from some of the company’s largest shareholders after setbacks with the acquisition of American International Group Inc.’s main Asian unit, The Sunday Telegraph reported .
May 9, 2010

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