Dec
19
Cost of Care Rising as Insurers Trying to Provide Value for Money
Filed Under Allianz, BUPA, Expat Insurance, Health Insurance, Healthcare, International Healthcare, Medical Insurance | 1 Comment
As medical services grow more and more costly around the world, international private medical insurance providers are trying to ensure that their policies provide good value for money while maintaining high levels of benefits.
In many countries, including such places as the US and the UK, the cost of medical services has been rising throughout recent years. In the US, the S&P Healthcare Economic Composite index showed an annual growth rate of 5.11 percent for the fiscal year that ended in October, outstripping the 4.74 annual growth rate reported in September by a significant margin. S&P’s Healthcare Commercial Index, which takes into account only healthcare costs covered by commercial insurance, saw its fourth consecutive month of rising annual growth rates to arrive at 6.91 percent for the year ended October.
Across the pond in the UK, there are similar stories with healthcare company Bupa releasing a study that predicts the costs of cancer treatment will rise steadily in the future. The report Cancer Diagnosis and Treatment: A 2021 Perspective was aimed at trying to make predictions about the cost of treating cancer over the next 10 years. The results estimated that the cost of treating cancer will rise by approximately 62 percent, meaning that while cancer treatment for someone in 2010 may cost on average around £30,000 (US$46,487), it will cost £40,000 (US$62,007) on average by 2021.
With premium costs over the last decade being pushed up by almost 10 percent a year due to medical inflation, insurers globally are recognizing that while everyone may like policies with extraordinary benefits, cost is a point of consideration for many. As 2011 comes to an end, some international health insurance companies are beginning to introduce changes to services or flexibilities to payment structure and cost-sharing to ensure that customers get value for money while maintaining high levels of benefits.
International private medical insurance provider, MediCare International, has introduced new excess structures that clients may select if they so choose that give policy discounts of up to 50 percent. The new options allow for four levels of excesses, offering discounts that range from 10 percent, 20 percent, 35 percent and all the way to 50 percent depending on the selected size of co-payment.
Another company that is reevaluating their products is Allianz Worldwide Care, which has revealed that it is trailing a new system of medical evacuation. Typically, if a policyholder finds themselves in a situation which necessitates medical evacuation, they are put on an air ambulance and either transferred back to their home country, or to the nearest center of medical excellence, depending on the particulars of the policy. The new option for transport will transport medically stable policyholders on commercial flights while they are accompanied by one of Allianz’s own doctors.
Allianz Wordlwide Care’s Medical Director, Dr. Ulriche Sucher, explained that “Many of our corporate clients have employees working in remote regions within Eastern Europe, Asia, Africa and Latin America, where sparse medical facilities means a greater reliance on evacuation services following a medical emergency. Plus, advancements in medical treatments and medical specialism in specific countries means that sometimes patients need to be brought to another country to receive the care that they need. Added to this is the increase in natural disasters such as storms, earthquakes and floods which can result in people needing medical treatment at a time when the closest medical facilities may have been damaged,”
While air ambulances will still be used in cases where the policyholder is in an emergency situation which requires emergency evacuation to the nearest quality medical facility, the new medical escort service is expected to bring large cost savings with it, especially for large corporate clients. The service is expected to be introduced after a 12 month trial proves successful.
Companies Mentioned
Allianz
Allianz Group is one of the leading global services providers in insurance and asset management. With a worldwide network of 153,000 employees, the Allianz Group serves 75 million customers in over 70 countries. Allianz offers a wide variety of insurance products to both private and corporate customers, including motor, accident, general liability, fire and property, legal expenses, credit and travel insurance. Allianz provides life and health insurance products on individual and group basis. Allianz is the market leader in the German market and has a strong international presence in insurance.
MediCare International
With 25 years of providing expatriates top quality international health insurance, Medicare International has grown by ensuring quick and easy access to their services 24 hours a day. The company currently covers clients from 86 nationalities in 114 countries around the world.
Oct
17
German insurance giant Allianz SE has decided to withdraw from the Japanese life insurance market, effective from next year, in a bid to refocus on more profitable ventures elsewhere. From January 1, 2012 onwards, Europe’s largest insurer will halt the sale of new life insurance policies in Japan and focus only on managing existing contracts in the country.
In a statement released September 30, Allianz outlined its plans to terminate life insurance sales in Japan by year-end. The company reassured all existing policyholders in Japan that their service contracts would remain intact for the duration of their tenure. “There will be no changes for customers that hold an existing contract with Allianz Life Japan. Allianz Life Japan will fulfill all contractual agreements and continue to provide services for all existing insurance products,” the news statement read, adding that the company remained in a strong enough capital position to honor all outstanding obligations. Allianz’s five other units in Japan, including Allianz Fire & Marine Insurance Japan Ltd, will continue to operate as before, the company said.
Allianz had only just begun selling life insurance policies in Japan less than four years ago. The Group’s local subsidiary, Allianz Life Insurance Japan Ltd (Allianz Life Japan) was granted an insurance license from the Japanese Financial Services Agency on March 7th 2008. Allianz already provided property and casualty insurance (first European insurer to be granted a license in 1990), asset management, and a variety of banking services in Japan. The company’s local life insurance unit’s central focus was primarily dealing with single-premium variable annuity and variable whole life products in Japan. In 2009, Allianz Japan Life launched a new variable annuity product, marketed in conjunction with major Japanese financial institutions. According to the latest figures released for fiscal 2010, Allianz’s local Japanese unit added about 17,000 new policies for the year and generated Y127.5 billion (US$1.65 billion) in premium revenues. As of August, Allianz Life Japan employs 233 people locally and holds about 35,000 contracts and total assets worth 228.4 billion yen (US$2.97 billion). The company have reportedly planned to reduce their domestic workforce gradually through an early retirement scheme.
The decision to retreat from the world’s second largest life insurance market by Allianz comes amid a major sales slump since the start of the current fiscal year in Japan due to the prolonged stock market downturn and stubbornly low interest rates. Japanese stocks are projected by Reuters to fall by 12 percent in 2011, which would be the second successive year of losses, due this time to a sharp Chinese economic slowdown and the European sovereign debt crisis. In a depressed economic environment, life insurance companies tens to suffer the most because they are normally unable to adjust and reprice policies annually, as other general insurers can do. Many life insurance products come with a fixed guarantee level of income over the duration of the policy, which could last for 30 years or more given modern medical advances. This guarantee presents a mismatch problem for businesses who write these long-term policies when the economic outlook appeared very different, as is the case in Japan and many other parts of the world.
Another contributing factor has been the continued claims fall out from the record breaking earthquake and tsunami that hit the northeast coast of Japan earlier this year. Japanese life insurers have paid out over 128.7 billion yen (US$1.63 billion) in claims from the March earthquake, including 98.7 billion yen (US$1.25 billion) in life insurance payouts and a further 30 billion yen (US$380 million) in accident related insurance benefits from settling 12,520 claims. Usually these accident benefits would have excluded cover for earthquake-related damages, but the Life Insurance Association of Japan said members had agreed to pay out benefits without applying de jure policy restrictions, a previously unheard of occurrence in Japan. Japanese insurers remain relatively well positioned and capitalized to absorb the net losses from the record-shattering earthquake and tsunami, but the fallout from this catastrophic event could have unpredictable effects on the market going forward. It has thus become important for Japanese insurers to pursue acquisition opportunities overseas, to expand beyond their shrinking domestic market and diversify their risk portfolios to achieve sustainable premium growth.
For Allianz, withdrawing from the unprofitable Japanese life insurance market now gives them an opportunity to streamline their operations, gain a buffer against the impending Eurozone crisis, and to better prepare themselves for the upcoming Solvency II rules, which will require EU-based insurers to hold more capital to match outstanding risks by 2014. The German insurance conglomerate has also been in an acquisitive mood as of late, looking to diversify and invest in emerging economies to offset the stagnant growth prospects in mature insurance markets. Allianz Group has already established a presence in several key emerging Asian economies through joint ventures including: Bajaj Allianz in India, Allianz China Life, PT Asuransi Allianz Utama in Indonesia, Ayudhya Allianz in Thailand and Allianz Lanka in Sri Lanka. These operations have given The Allianz Group prime access to the rapidly developing Asian markets that are driving, in particular, the demand for protection, savings and investment products as the wealth of the substantial populations in these nations grow further. This trend looks set to continue following news that HSBC, Europe’s biggest bank, has contacted the firm about bidding for its lucrative non-life insurance operations in Hong Kong, Singapore, France and Latin America, in what could become a billion dollar deal. Allianz is also reportedly in talks this week about acquiring Poland’s number two insurer Warta SA. Through these moves, Allianz looks to maintain itself at the forefront of the international insurance industry despite operating in a difficult global economic environment.
Insurance Company Mentioned
Allianz
Allianz Group is one of the leading global service providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.
Sep
28
Malaysia General Insurance Market to Grow
Filed Under Allianz, Asia, general insurance | 1 Comment
New figures released this month by Malaysia’s insurance authorities have provided ample evidence of the country’s continued development into one of Asia’s most promising general insurance markets.
Malaysia’s economy grew at 7.2 percent last year, the highest rate experienced since the year 2000. The Malaysian government has continued to aggressively pursue substantial investment programs with the explicit goals of doubling GDP per-capita and turning Malaysia into a high income country by 2020. New parliamentary initiatives such as the New Economic Model (NEM), Economic Transformation Program (ETP) and the Tenth Malaysian Plan will, according to industry analysts, eventually contribute to a growth in demand for insurance products and services. However, despite these initiatives, the insurance industry in Malaysia currently faces numerous challenges as customers tighten their belts and become more skeptical toward the importance of protecting assets through insurance. The industry believes that general insurance agents must now play a greater role in order to weather the volatile economic and financial challenges.
In response to these challenges, the Malaysian Insurance Institute (MII), one of the country’s three insurance associations, organized the General Insurance Agents Convention for all general insurance agents in Malaysia on September 13, 2011 in Kuala Lumpur. The event was attended by 500 participants and encouraged discussion amongst industry professionals about how to best address the issues facing Malaysia’s emerging general insurance market going forward.
Speaking at the conference, Khadijah Abdullah, MII Chief Executive Officer, revealed that Malaysia’s general insurance agency force is projected to grow by over a quarter this year, up from the roughly 35,000 registered agents active in the country in 2010. This promising forecast is based on new MII data, which showed than an average of 800 new candidates per month had taken the insurance agents exam during the first half of the year. Not only are more Malaysian citizens realizing the importance of adequate insurance coverage, many are clearly now looking to the industry for employment opportunities. “A career as a general insurance agent is still attractive and very much sought after,” Khadijah Abdullah told convention attendees.
An increased agency force is vital to the future development of the Malaysian general insurance sector. Together with bancassurance, agents remain the most effective distribution platform for insurers in the Asia Pacific country. According to the General Insurance Association of Malaysia (PIAM), total general insurance gross premium amounted to MYR13 billion (US$4.1 billion) in 2010, of which agents contributed MYR7.4 billion (US$2.35 billion). In lieu of more technologically advanced distribution and promotion platforms, more agents will continue to be required throughout Malaysia as demand for insurance solutions escalates.
The changes in consumer attitude towards insurance in the Asia Pacific region have become more readily apparent. A new study released last week by ING Insurance Berhad showed that 83 percent of all Malaysian consumers believe that there is now a much greater need to protect their lifestyles now than compared to just 12 months ago. Rising healthcare costs and lifestyle expectations has enabled the attitude towards and awareness of insurance to change very quickly. Overall, the rise in income, healthcare, education and housing opportunities across most of Asia, have given families in the region greater access to a lifestyle they would now like to protect.
As the insurance industry continues to develop in Malaysia more regulatory measures are expected in the near future to update the market and more closely match international standards. For example, The Malaysian Central Bank (BNM) has recently come out with revised guidelines on motor insurance, aimed at curbing fraud and ensuring consumers understand the appropriate market value of their motor vehicle when applying for comprehensive coverage. The new measures came into effect on August 1st 2011 and have already worked to address many grievances in the motor insurance sector. In addition, Malaysia’s government has committed to the gradual financial liberalization of its Islamic finance sector and plans are also underway to introduce compulsory travel insurance cover for all Malaysians flying overseas by year’s end.
The MII advised that while these measures could do much to improve insurance awareness and coverage in Malaysia, their goals will not be realized without an adequately trained agency force, and this will take time and resources to achieve. “This requires the agents to have an in-depth knowledge and ability to advise their clients,” Khadijah Abdullah said, adding that further collective action would need to be taken to ensure best business practices are consistently maintained in Malaysia’s general insurance market “As an industry as a whole, we are driving higher professionalism as well as quality standards and in this respect, all stakeholders have to work together to achieve aims and objective.”
While both the numbers of agents and clients in the general insurance market are poised to grow, premium levels, with the exception of government subsidized motor and fire insurance lines, are expected to remain relatively stable due to intense competition amongst both domestic and foreign insurance players in the country. Malaysia has already proven to be an attractive location for several of the world’s most prominent insurers and they are bringing their expertise to the country to great effect. Prudential Assurance Malaysia Bhd (PAMB), a local joint-venture operation with the UK’s largest insurer by market value, posted a 13 percent increase in new business sales in the first half of 2011 and are now confident of surpassing last year’s totals. Indeed, Prudential now believes that the strength of its Asian business will continue to protect the insurer against the worst of another potential financial crisis in the West. These same sentiments were echoed earlier in the year by Allianz, who are themselves undertaking numerous initiatives to improve their distribution capabilities in the region.
Companies Mentioned
Allianz
Allianz Group is one of the leading global services providers in insurance and asset management. With a worldwide network of 153,000 employees, the Allianz Group serves 75 million customers in over 70 countries. Allianz offers a wide variety of insurance products to both private and corporate customers, including motor, accident, general liability, fire and property, legal expenses, credit and travel insurance. Allianz provides life and health insurance products on individual and group basis. Allianz is the market leader in the German market and has a strong international presence in insurance.
Prudential
Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
ING
ING provides banking, investments, life insurance and retirement services and operates in more than 50 countries. It serves more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia.
Bank Negara Malaysia
Bank Negara Malaysia is Malaysia’s central bank, tasked with overseeing the nation’s economic and financial systems.
Jul
6
Nippon Life Insurance Company, Japan’s largest life insurer by revenue, has announced plans to expand overseas and invest €500 million (US$725 million) in a unit of Allianz SE, with the transaction expected to close later in the week. This deal marks the Japanese company’s first investment in a European peer, and it is also the first time that the German insurance giant has issued contingent capital through 30-year convertible bonds, an asset class known commonly as cocos.
The purchased Allianz subordinated bonds can be converted into equity within 10 years (and under certain undisclosed conditions apparently even earlier), which would give Nippon Life between a 1.5 to 2 percent stake in the German insurer. Nippon Life also has a venture with Schroeder’s of the United Kingdom, but this would be its first direct investment into a company in Europe.
Speaking on the deal, Nippon Life president, Yoshinobu Tsutsui, told reporters that the transaction was part of Nippon Life’s long-term business strategy to establish more robust overseas alliances as the traditional Japanese life market shrinks: “The objective of this investment is to establish a long-term partnership that is mutually beneficial for both companies,” Mr. Tsutsui said, adding “We are very pleased to have the opportunity to strengthen our relationship with Allianz, which shares similar values and beliefs with Nippon Life regarding the insurance business.”
This considerable acquisition reflects the pressing need for all Japanese insurers to search out alternative sources for growth and extend international operations, given the limited prospects in their domestic market due to both saturation and an aging population. The currency exchange rate would particularly favor acquisition activity in Europe, where the Euro has fallen against the yen by 30 percent since 2007. Despite these market conditions, consolidation efforts in Japan’s life insurance sector have remained relatively slow because most insurers are structured as mutual companies, and can thus be overtly conservative as they are owned, and held accountable, by domestic policyholders
Nippon Life has long recognized the need to generate new premium income outside their home market and have been involved with a series of overseas acquisitions in the past few years. In March, the Japanese insurer agreed to purchase a 26 percent stake in India’s Reliance Life Insurance, a unit of Reliance ADA Group, for US$680 million, which still represents the most significant foreign direct investment in the Indian insurance industry. This followed a period of interest in US-based companies, which included a US$250 million investment in Northwestern Mutual Life Insurance Co. last year, and a US$500 million venture in a Prudential Financial Inc unit in 2009.
Of Nippon Life’s Japanese life insurance rivals, only Dai-ichi Life Insurance have demonstrated similar ambitious expansion plans, recently acquiring a controlling stake in Tower Australian for US$1.2 billion in a move to gain access to the Australian life insurance market. Dai-Ichi has also invested in several emerging Asian markets, including a competitor in India. Non-life insurers from Japan have also been actively expanding their global reach. Last year, MS&AD Insurance Group acquired a 30 percent holding in Malaysia-based Hong Leong Assurance Bhd. and NKSJ Holdings acquired a majority stake in Fiba Sigorta Anonim Sirketi in Turkey, both for about US$35 million (¥27 billion).
For Allianz, the successful sale of €500 million worth of 30-year convertible subordinated notes to Nippon Life will enable the insurer to better prepare itself for the upcoming Solvency II rules, which will require EU-based insurers to hold more capital to match outstanding risks by 2014. Cocos, bonds that can be converted into equity pending pre-approved financial circumstances, are now becoming increasingly popular because they enable the issuers to raise capital reserves and benefit from a better solvency ratio without necessarily forfeiting equity. Michael Diekmann, CEO of Allianz, lauded the insurer’s deal with Nippon Life as a forward thinking move for the company: “With this transaction, we are among the first companies to participate in the growing market for contingent convertible notes,” he said in a statement. More insurers may soon test this new asset class.
Despite ongoing concerns about the economic future of the Euro zone and a fresh €300 million commitment to a second Greek rescue, Allianz Group, as a whole has continued to grow following its sound 2010 performance figures. The financial services conglomerate reported in February that annual net income for Allianz in 2010 had increased by 22.4 percent to total €5.2 billion (US$ 6.94 billion), with revenues reaching €106 billion (US$ 151 billion) and total assets under management of €1518 billion (US$ 2.17 trillion), cumulatively representing the best figures in the 120 year history of Allianz. The company has maintained itself at the forefront of the international insurance and worldwide asset management industry while looking towards mitigating policyholder risks and exploring new opportunities, despite operating in a difficult global economic environment.
While investment from Japan is welcome, other Asian countries have become pivotal markets for European-based international insurers to enter into themselves. Allianz Group has established a presence in several key emerging Asian economies through joint ventures including: Bajaj Allianz in India, Allianz China Life, PT Asuransi Allianz Utama in Indonesia, Ayudhya Allianz in Thailand and most recently, Allianz Lanka in Sri Lanka. These operations give The Allianz Group prime access to the rapidly developing Asian markets that are driving, in particular, the demand for protection, savings and investment products as the wealth of the substantial populations in these nations grow further.
Insurance Companies Mentioned
Nippon Life Insurance
Nippon Life Insurance – Japan Nippon Life Insurance Company was established in 1889 in Japan and through its subsidiaries offers various life and non life insurance products and services. Nippon Life operates in North America, Europe, Oceania, Asia, Central and South America, and the Middle East.
Allianz
Allianz Group is one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.
Reliance Life Insurance
Indian life insurance company, Reliance Life Insurance, is an associate company of Reliance Capital. Reliance Capital is one of India’s top 3 financial services companies by net worth. Both Reliance Life Insurance and Reliance Capital are part of the Reliance – Anil Dhirubhai Ambani Group.
Dai-Ichi Life Insurance
Dai-Ichi Life Insurance Company was founded in Tokyo in 1902 and operates in the life insurance market in Japan and overseas. Dai-Ichi Life offers whole life, term insurance, annuities and endowment products. The insurer has operations in Asia, Europe and North America offering saving and protection products for individuals and groups.
Apr
8
Allianz Business in Sri Lanka Flourishes
Filed Under Allianz, Life Insurance | 3 Comments
Allianz Lanka Ltd., a wholly-owned Sri Lankan subsidiary of financial services conglomerate Allianz Group of Germany, has posted good results for its 2010 operations. The new annual report details the company’s substantial growth in both the life and general insurance trade on the island nation despite being the only Sri Lankan insurer currently without a captive insurance business.
The Sri Lankan economy has become one the fastest growing markets in Southern Asia. Since the end of the protracted civil war in 2009, the country has emerged as an attractive prospect for outside investment. The government of Sri Lanka has been working hard to develop the domestic economy. Per capita income has been steadily rising and the reported GDP of the nation grew to US$ 104.7 billion for 2010. The South Asian country has entered a period of pronounced stability and is now well positioned for further growth.
The insurance industry in Sri Lanka has been improving steadily despite the global economic downturn. Out of the 18 private insurance companies operating in Sri Lanka, 5 are presently involved in foreign joint ventures. Allianz Insurance Company Lanka Ltd. is a wholly owned subsidiary of Allianz Group of Germany. Other joint venture insurance companies operating in Sri Lanka include Aviva NDB, formerly known as Eagle Insurance PLC, Life Insurance Corporation (Lanka) Ltd., and Hayleys AIG, of which the major shareholders are Aviva, the Life Insurance Corporation of India Ltd., and AIG respectively. Takaful Malaysia holds a 15 percent equity sharing in Amana Takaful PLC.
Surekha Alles, CEO and Director for Allianz Lanka confirmed that Sri Lanka was becoming an attractive market for insurers: “The optimism that followed the cessation of hostilities in the country created a healthy environment for growth in insurance business. We are very pleased with the performance of both our General Insurance as well as Life companies, having surpassed our plan in all areas.”
Allianz Lanka began its general insurance business in Sri Lanka in 2005. Incorporating the robust global presence and solid capitalization of the Allianz group, together with a strong regional management team with expertise on the Sri Lankan market has enabled Allianz Lanka to become one of the fastest growing insurers in the country. In 2009, Allianz Lanka became the first local insurer to achieve LKR 1 billion (US$ 9.06 million) in premium income within the first 5 years of operation. For 2010, a year that saw a substantial increase in claims due to adverse weather conditions on the island, gross written premium for general insurance increased 25% to LKR 1.47 billion (US$ 13.3 million) and underwriting profit doubled from 2009’s results to LKR 126 million (US$ 1.14 million). Net assets grew 39% and pretax profit for general insurance was a reported LKR 221 million (US$ 2 million), a 40% growth over 2009’s figures.
Allianz Lanka’s success in the general insurance business in Sri Lanka prompted the company to expand its investment portfolio and enter the life insurance market. In July 2008 the company received certification from the Insurance Board of Sri Lanka to begin providing life insurance products. In the two years since beginning operations, the insurer has likewise achieved remarkable growth in the life insurance sector, with the amount in gross written premiums doubling in 2010 to LKR 205 million (US$ 1.86 million). The successful performance and proactive investment strategy executed by Allianz Lanka’s life insurance division has enabled the company to provide participating life insurance policyholders with a 14 percent dividend yield, which was the largest dividend declared in the Sri Lankan insurance industry for 2010.
Allianz Lanka is currently the only insurer in Sri Lanka that is appropriately structured to meet upcoming insurance industry regulatory requirements that mandate the maintenance of separate businesses for domestic life and non-life insurance operations.
The current penetration rate for insurance services in the Sri Lankan market is low at around 10 percent of the populace. Through an expansive promotion strategy, leveraging Allianz as a renowned global brand, the company has been gaining momentum and has become one of the most recognized insurers on the island. Surekha Alles explains: “Word of mouth has been Allianz Lanka’s main marketing tool, and we will continue to ensure that our products and service standards will be talked about in the years to come.”
Allianz Lanka is able to integrate with the international affiliations of parent company, Allianz S.E., to incorporate global economies of scale that ultimately provide a high quality of service and competitively priced coverage products for the Sri Lankan market. Allianz’s AA accreditation from Standard and Poor further provides confidence to prospective customers, individuals and corporate clients interested in insurance services.
Surekha Alles concludes: “Year over year, we are proud of having created value for all our stakeholders in every area in which we do business. We are also pleased to continue to provide our customers with international standards of risk management advice to mitigate business losses, with the technical expertise of our parent company.”
Allianz Group, as a whole, performed well through 2010. The financial services conglomerate reported in February that annual net income for Allianz in 2010 had increased by 22.4 percent to total €5.2 billion (US$ 6.94 billion), with revenues reaching €106 billion (US$ 151 billion) and total assets under management of €1518 billion (US$ 2.17 trillion), cumulatively representing the best figures in the 120 year history of Allianz. The company has maintained itself at the forefront of the international insurance and worldwide asset management industry while looking towards mitigating policyholder risks and exploring new opportunities, despite operating in a difficult global economic environment.
Asia has become a pivotal market for international insurers. Allianz Group has established a presence in several key emerging Asian economies through joint ventures including: Bajaj Allianz in India, Allianz China Life, PT Asuransi Allianz Utama in Indonesia and Ayudhya Allianz in Thailand. These operations give The Allianz Group prime access to the rapidly developing Asian markets that are driving, in particular, the demand for protection, savings and investment products as the wealth of the substantial populations in these Asian nations increase.
Insurance Companies Mentioned
Allianz Lanka
Allianz Insurance Company Lanka Limited operates as a wholly owned subsidiary of Allianz SE. Since the company’s inception in 2005, Allianz Lanka has been one of Sri Lanka’s fastest growing insurance providers, setting many industry benchmarks for the country.
Allianz
Allianz Group is one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.
Mar
31
BNH Post Good Results, Looks to Gulf Expansion
Filed Under Allianz, Insurance Company, UAE Insurance | 2 Comments
Bahrain National Holding (BNH), the parent company of both Bahrain National Insurance and Bahrain National Life Assurance, held its annual shareholder meeting at BNH Tower this past Tuesday, March 29th 2011. Despite the general political tension occurring in the region, BNH’s progress has remained undeterred and the firm plans on continuing the expansion of its operations throughout the Gulf.
BNH announced a net profit of BD 3.814 million (US$ 10.1 million) for 2010, which resulted in a 5 percent increase of the company’ total net assets, now up to BD 42.157 million (US$ 112 million). There was also an increase in BNH’s Net Earned Premium income which rose to BD 13.587 million (US$ 36 million) over the BD 13.395 million (US$ 35.5 million) registered in 2009. Given the positive results, a 20 percent dividend at 20 fils (US$ 0.50) per share was agreed upon and paid to shareholders from company earnings.
Mahmood Al Soufi , chief executive of BNH, has said of the Group’s performance: “We are content with our business strategies which have provided rewarding results in 2010. We will continue with these initiatives to ensure the stability of our business, to provide value for our clients and business partners and to grow our shareholders value,” he later dismissed any possible spillover impact from events occurring in the Middle East or Japan having effect on the company’s business “We are not revising our budgets and there has been no change in our investment plans regionally or our continued investment in our core insurance business.”
Given the stable forecast, BNH is looking to invest more on top of the BD 8 million (US$ 21.22 million) allotted in 2009 for regional expansion in an attempt at enhancing the scale of business available to the company. BNH is particularly keen on establishing a presence in the UAE and Qatari insurance markets. Mahmood Al Soufi explains the current status of BNH’s regional development strategy: “We are in the final phases of establishing a company in Abu Dhabi with major shareholding from the UAE and also the company is positive to get nod from the Qatari authorities to open a branch in Doha.”
In October 2010, BNH established Bahrain Emirates Insurance Company (BEI), their first joint-venture branch in Abu Dhabi. BNH holds a 30 percent stake in the business with an initial paid-up capital investment of BD 10.5 million (US$ 27.9 million). BEI was successfully granted a license to operate in the country and business in Abu Dhabi is expected to progress quickly given the industry expertise available from its investors. The insurance market in the UAE, which incorporates compulsory private health insurance scheme, has significant growth potential for insurers. BEI is expected to expand its operations further throughout the UAE and other Gulf countries.
BNH is presently waiting on the Qatar Financial Centre Regulatory Authority to grant them a license to operate a subdivision in Doha. Qatar is currently developing a national health insurance scheme as part of substantial reforms planned for the healthcare sector in their National Development Strategy 2011-2016. The system would establish a public-private mix whereby a new federal authority would negotiate closely with private insurers over provision of services. A complimentary basic health service package would be introduced but all those able to pay (including expatriates) would be expected to enter the private insurance market. While the full ramifications of these new national regulations can not yet be evaluated, early entrance into the Qatari insurance market for BNH would be an advantage.
Takaful, or Sharia-compliant, insurance has emerged as a powerful niche securities market in the region. Takaful products are mutually beneficial coverage policies that cater specifically to Middle Eastern and Asian Islamic communities. The takaful insurance industry is projected by industry analysts to grow at 15 percent annually over the next 5 years and generate more than US$7 billion in premium income. Major foreign insurers have taken note of the huge growth potential from this brand of products. In 2010, Standard Chartered and Allianz Takaful in Qatar entered into a 5 year agreement to distribute Alliaz Takaful’s insurance services through Standard Chartered Bank. The two insurers partnered again to allow Standard Chartered SME insurance products to be sold through Allianz Takaful in Bahrain. Zurich established a joint venture operation with Abu Dhabi National Takaful and is looking to involve itself further in the region. BNH are likewise interested at getting into the takaful market and predicted they would be involved with acquisitions involving the Islamic insurance industry within the year.
Farouk Almoayyed, Chairman of the BNH, summarized the firm’s situation and predicted upward trajectory for the company: “The proactive approach the Group implemented previously has manifested itself in the positive financials achieved for this year. We strongly believe in our experienced team and effective strategies and are confident to say that today we are well positioned to sustain our growth organically, regionally and internationally.”
The general outlook for the insurance industry in the Middle East and Gulf regions is currently difficult to determine. Prior to the civil unrest and political revolutions in Tunisia, Egypt and Libya, the forecast was very positive throughout. The preexisting low insurance penetration levels, high growth rate in population and emerging economies were all conducive to growth. The degree of increased risk now varies much more from country to country. The three most lucrative markets in the region, UAE, Qatar, and Saudi Arabia, have remained strong with renewed commitment to health infrastructure encouraging further demand for insurance services. Areas under more duress are more likely to suffer from disruption to business activity as well as liquidity issues. The degree to which the current political turmoil will spill over into the economy and become a more substantial long term issue in many Middle Eastern countries is still evolving.
Insurance Companies Mentioned
Bahrain National Holding
BNH, with its subsidiaries, offers a wide range of insurance and risk management solutions in Bahrain. The Company was established in 1998 and is based in Manama, Bahrain.
Allianz Takaful
A fully owned subsidiary of the Allianz Group, Allianz Takaful was established in March 2009 and is headquartered in Bahrain. Allianz Takaful is the Allianz group’s first foray into the Gulf Cooperation Council or GCC, and offers Shariah-compliant products and services.
Standard Chartered Bank Qatar
Standard Chartered Bank first opened a branch office in Qatar in 1950, making it the oldest foreign bank in Qatar. It operates 3 branches and 6 ATM machines in the country, employing 167 employees from 30 different countries. Their two core divisions of Wholesale and Consumer Banking have given them a 27% market share in Qatar.
Zurich
Headquartered in Zurich, Switzerland, Zurich Financial Services Group is an insurance-based financial services provider with a network of subsidiaries andoffices in North America and Europe and also in Asia-Pacific, Latin America and other markets. Zurich is one of the world’s largest insurance groups, and one of the few to operate on a truly global basis. With 60,000 employees serving customers in more than 170 countries, our business is concentrated in three business segments: General Insurance, Global Life, and Farmers.
Mar
18
Growth expected for Malaysian Insurance Sector
Filed Under Allianz, Health Insurance, Life Insurance, Medical Insurance | 5 Comments
Projections foresee growth in 2011 topping 12% across the Malaysian insurance industry. The Malaysian government has unveiled stimulus plans and other legislative initiatives which together with an historically low interest rate environment have lead to very favorable conditions for growth in the insurance sector. All forecasts however need to be tempered by an awareness of uncertainties about the outlook for a number of western economies and the possible resulting downward pressures on overall performance of the global insurance industry.
Malaysia’s economy grew 7.2 percent last year, the highest rate experienced since the year 2000. The Malaysian government has aggressively pursued substantial investment programs with the explicit goals of doubling GDP per-capita and turning Malaysia into a high income country by 2020. New parliamentary initiatives such as the New Economic Model (NEM), Economic Transformation Program (ETP) and the Tenth Malaysian Plan will, according to industry analysts, lead to a growth in demand for insurance products and services.
The Life Insurance Association of Malaysia (LIAM) held that in addition to these numerous initiatives announced in the Economic Transformation Program, including the private pension plan and worker insurance scheme, economic conditions in the country are ripe for further life insurance development. Consumer confidence in Malaysia has shown marked improvement, rising to 107 points on the latest Nielsen Global Consumer Confidence Index, its highest score since the third quarter of 2006. Around 41 percent of the Malaysian population is currently insured, according to the LIAM. This level of life-insurance penetration is low by a developed economy’s standards and will be an important factor in the further growth of the sector. The current low interest rate environment will act as an impetus to consumers seeking high-yielding products like insurance in Malaysia.
The LIAM reported that new business sales for life insurance rose 19 percent on a weighted premium basis during the first three quarters of 2010. This growth was accredited to strong performances in regular premium sales which were up 21 percent compared with the identical period in 2009. Single premium business, however, registered a small 1 point decline.
The LIAM’s views were supported by the General Insurance Association of Malaysia (PIAM), the Malaysian Takaful Association (MTA) and Allianz Malaysia Bhd (AMB).
The General Insurance Association of Malaysia (PIAM) executive director Mr. Lim Chia Fook reported that, in absence of any further adverse impacts on the world economy, the insurance association foresees the outlook for the general insurance industry this year to be very positive with an increased demand for insurance in all areas expected. The general insurance industry recorded that for the third quarter of 2010, gross direct premium estimates were 3.16B$, demonstrating a growth of nine percent over the same three quarter period during the previous year.
The Malaysian medical and health insurance sector (MHI) is likewise expected to sustain powerful development, driven by upward trends in consumer awareness coupled with an increasing want for cover against escalating healthcare costs. Mr. Lim added that the introduction of the health insurance plan designated for foreign workers would further drive growth in the MHI sector. PIAM anticipated new areas of industry growth through micro-insurance products, especially considering the rapidly developing small and medium enterprise and biotechnology sector in Malaysia.
The Malaysian Takaful Association (MTA) expects the Islamic insurance industry to continue to improve on its 10% market penetration, particularly by expanding into rural areas. The Islamic insurance market has grown due to more interest in shariah-compliant investments. The industry has experienced substantial growth after the Malaysian central bank issued takaful licenses to four established consortiums in 2006, which included HSBC, Malaysia’s Hong Leong Bank and Prudential Holdings. Malaysia currently has eight takaful operators and trusts that the inclusion of new insurance players would increase industry competition, pushing players not only to capture new market share but also to develop fresh takaful products. Similar to general insurers, the islamic insurance sector operates through correlation with macro economic performance; hence the positive outlook for the Malaysian domestic economy will affect the development of both sectors.
MTA chairman Datuk Syed Moheeb Syed Kamarulzaman reported: “The significant growth in retail credit financing, especially in relation to home financing in 2010, may be curbed to some extent in 2011 and this should encourage takaful operators to diversify their business focus away from financing protection products to agency driven products.”
Allianz Malaysia CEO Jens Reisch remarked that apart from the initial low insurance penetration rate in the country, increase in consumer knowledge, greater demand for retirement savings, together with growing Bancassurance and takaful businesses from a more liberalized insurance industry, are some of the other factors that would advance the insurance sector. Mr. Reisch added that Allianz: “is undertaking numerous initiatives to improve its distribution capabilities and we hope to continue to strengthen the top line and sustain profitability.”
Mr. Reisch highlighted that the major challenges facing the insurance trade would be the provision of long-term assets for packaging insurance products, the low interest environment for insurers failing to manifest attractive guaranteed return products and the requirement to offer high guaranteed products into the long term future.
The LIAM assert that global economic uncertainty could restrain the growth potential of the industry: “While it is an external factor, the quagmire prevailing in the established economies of the United States, Japan, Europe and the reaction of the local share market towards such sentiments may have an indirect impact on the industry. It can cause a slowdown on external demand that will eventually influence consumers in terms of decision-making, thus making sales more difficult.”
The association’s president, Md Adnan Md Zain, believes the best actions to take to overcome these peripheral obstacles would be through prudent domestic policies, active oversight, working closely with regulators and better integrating as an industry. The Life Insurance Association doesn’t discount the potential for inclusion of new foreign insurance players that could invigorate the market as well as the continued implementation of the financial inclusiveness programs undertaken by both the authorities and financial institutions.
Insurance Companies Mentioned:
Allianz: Allianz Group is one of the leading global services providers in insurance and asset management. With a worldwide network of 153,000 employees, the Allianz Group serves approximately seventy five million customers in about seventy countries. Allianz offers a wide variety of insurance products to both private and corporate customers, including motor, accident, general liability, fire and property, legal expenses, credit and travel insurance. Allianz provides life and health insurance products on individual and group basis. Allianz is the market leader in the German market and has a strong international presence in insurance.
Feb
28
Allianz Profits Grow
Filed Under Allianz, Health Insurance, Insurance Company, Life Insurance | 4 Comments
The multi-national German insurer the Allianz Group – Europe’s largest insurer by gross premium income – reported that annual net income in 2010 increased by 22.4 percent to total €5.2 billion (US$6.94 billion), driven by substantial growth in Allianz’s life and health insurance businesses.
Allianz’s year-on-year net profit rose by 11 percent in the fourth quarter of 2010 to reach €1.13 billion (US$1.54 billion) on the back of improved business in the property-casualty sector, together with the life and health insurance segments against the background of tough global trading conditions.
Revenues for Allianz reached €106.5 billion (US$145.9 billion) in 2010 – the first time in 5 years that the German insurer’s yearly income has surpassed €100 billion (US$137 billion). Operating profits totaled €8.2 billion (US$11.23 billion), an increase of 17 percent over 2010. The German’s insurer’s yearly profits were partly influenced by favorable foreign currency fluctuations.
Speaking on Allianz’s annual results, the CEO of Allianz, Michael Diekmann said: “We are proud of having achieved substantial growth in 2010. Revenues were above our historical best and our operating profit exceeded our own expectations. Allianz has managed its risks well and emerged highly profitable and financially stronger from the financial crisis years 2008 and 2009. This is the foundation for the resilience and stability our customers, investors and employees expect from us.”
One of Allianz flagship health insurance brands – Allianz Worldwide Care – which has over 75 million customers globally – helped the German insurer’s total life and health insurance premiums to reach €57.1 billion (US$78.2 billion) in 2010, reflecting a 12.5 percent increase year-on-year. The high demand for investment-oriented and traditional life insurance products helped operating profit in this segment to grow by 7.4 percent to €2.9 billion (US$3.97 billion) in 2010 despite prevailing low interest rates.
“Our strong performance in Life/Health exceeded our expectations. Increasing customer demand for Allianz products and solutions fueled double-digit growth in revenues. This shows that our customers want the attractive returns and stability Allianz can offer. Operating profit beat our annual target. Our new business value and margins also improved, despite the tough low interest rate environment,” said Oliver Bäte, member of the Allianz Board of Management.
There was improved business in Allianz’s property and casualty line, with total gross premiums reported at €43.9 billion (US$60.1 billion) – a 3.2 percent increase on results achieved in 2009. The rise in this category was partly down to positive pricing trends in Allianz’s core markets, coupled with efficient underwriting practices during the year.
Operating profits jumped by 5.9 percent to generate €4.3 billion (US$5.9 billion) for the property and casualty business, which was due to improved results despite some exposure to a high volume of natural catastrophe claims in 2010. However there was a significant increase in new business and renewals of contracts, especially among customers in Australia, France, Italy and the UK.
Allianz’s Asset Management business grew by 26.2 percent to reach a record of asset values amounting to €1,518 billion (US$2,079 billion ) in 2010. Allianz’s operating profit from asset management jumped by 47 percent in 2010 to report a record total of €2.1 billion (US$2.8 billion) up from 2009’s total of €1.4 billion (US$1.9 billion). Allianz’s asset management business has become more profitable as the inflow of business increased and higher margins were achieved.
However, while Allianz were able to report strong profits in 2010, the impact of the new regulations being introduced by the European Union for capital requirements to protect company solvency is expected to impact on insurers operating in this major sector of business activity from 2013. While uncertainties exist surrounding how capital requirements under the European Solvency II regulations will influence insurers in Europe, Allianz has stated that it will not be entering into large acquisitions until they know the full extent of the impact of the new regulatory requirement.
While multi-national insurers have been reporting mixed financial results for 2010, with Allianz’s European rival, AXA recording a 24 percent decline in profits, Allianz has been able to overcome the tough market conditions reporting profits in all segments of insurance activity. This has been achieved by applying strict underwriting practices to business transactions, with relatively minimal exposure to losses for claims arising from natural disasters.
Allianz has a global presence stretching from the mature markets of Europe and North America to the emerging markets in the Middle East, North Africa, Latin America, and Asia, which are presenting the best opportunities for new premium growth in the future.
The Allianz group’s presence in key developing Asian economies exists through joint ventures such as Ayudhya Allianz in Thailand, PT Asuransi Allianz Utama Indonesia, Allianz China Life and Bajaj Allianz in India. These networks offer Allianz prime access to rapidly expanding Asian economies which are driving, in particular, the demand for protection and saving products as the wealth of the massive populations in these nations increases.
Insurance Company Mentioned:
Allianz
Allianz Group is one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.
Feb
18
India to Introduce Portability for Health Insurance Policies
Filed Under Allianz, BUPA, Health Insurance, Healthcare, Medical Insurance, Uncategorized | 9 Comments
From July 1st 2011, health insurance policy holders in India will be able to change insurance providers, without the fear of losing their benefits from their previous policy.
With the new initiative issued by the IRDA (Insurance Regulatory and Development Authority), industry leaders in India predict an increase in competition among health insurance providers, as policy-holders will be afforded greater freedom in moving their policies among insurers. Health insurance service standards are also expected to rise in return, as insurance companies will increasingly compete on the quality of customer service.
The IRDA issued a media release on 10th February 2011, indicating that insurers should allow for portability of health insurance policies. The central thrust of the IRDA plans for health insurance portability is the ability to transfer credit for pre-existing conditions in regards to waiting periods on cover, provided that there has been no lapse in the policy. The IRDA also seeks to allow portability if the policy lapses due to delay by an insurer.
Prior to the regulatory change, policy holders were often at a disadvantage. If a policy-holder wanted to change to a different health insurer, particularly if they have acquired a chronic illness, they may face obstacles such as long waiting periods or exclusion of cover for pre-existing conditions when taking out the new policy.
Policy-holders should be happy with the recent changes in IRDA laws, which will allow them to carry their policy to another insurer, keeping the benefits of their previous policy. “It is essential to protect policyholders against discontinuity and consequential loss of pre-existing disease cover… The portability will ensure the policyholder is not tied to one insurer for the pre-existing disease cover” said the IRDA in the February 10th media release.
CEO of Apollo Munich Health Insurance, Antony Jacob, explains changes regarding the new law “a customer opting to choose our product (at similar sum insured level) can transfer indemnity based health policy from any insurer with the accumulated benefits”.
The IRDA aims to protect the interests of policy-holders and this is one of their most recent regulations on health insurance companies in India. The IRDA, appointed by the Government of India, are ultimately setting its targets to not only protect the rights of consumers, but to protect the state in the burden of medical treatment placed on the public health system.
Looking ahead, as suggested by leading insurers, what we can expect to see is an increase in competition among insurers. Policy holders in India will find shopping for another insurance provider an easier process.
Increased competition on the market may initiate a drop in health insurance premiums; as insurers provider try to draw in customers. However, Dr BS Powdal, Head of Health Insurance, Bajaj Allianz, explains that this is unlikely to occur. With customers moving to different companies there is usually a particular reason for it, such as poor service, given the benefits under their policy will remain the same. ‘Quality of services’ will therefore be the likely motivator in the near future for customers within India moving to different health insurers.
Dr BS Powdal of Allianz explains, “he is going to pay some extra amount for the added quality of service so it is unlikely that there will be a price wars because of portability but the customer benefits because he gets the benefit of the waiting period which he has already stayed with the previous insurance company”, further adding that premiums are in fact likely to rise “if there is a person who has say suffered a heart attack with the previous insurer’s policy period when he moves to the next insurer that insurer probably will charge a higher premium… prices may go up to some extent for those who have a claim history with the previous insurance company”.
In the meantime, competition is on the increase in India with more and more individuals taking out health insurance policies in the country. The number of policy holders increased to 6.88 million from 4.57 million in the 2008-9 year, according to data issued by Third Party Administrators (TPA) and Insurers in India. With increasing numbers of policy holders, premium collection by health insurers has almost doubled along with the submission of claims.
Key players on the health insurance market in India include Star Health & Allied Insurance, Apollo MUNICH and Max BUPA; with other leaders including National Insurance Company, United India and Oriental Insurance and ICICI Lombard.
Insurance Companies mentioned:
Star Health & Allied Insurance
Star Health and Allied Insurance is a specialist health insurance provider and was the first stand alone health insurer in India. Star Health and Allied Insurance provides health, accident, student, travel, and life insurance products.
Apollo Munich Health Insurance
Apollo Munich Health Insurance Co. Ltd. (previously known as Apollo DKV Insurance Co. Ltd) is a joint venture between the Apollo Hospitals Group and Munich Health. Apollo Munich Health Insurance provides health, personal accident and travel insurance.
Max Bupa Health Insurance is a 74:26 joint venture between Max India Limited and UK-based Bupa. Bupa is a leading private healthcare provider with more than 10 million customers worldwide and over 60 years experience in the health sector. The Max India Group has expertise in both healthcare and insurance related services including hospitals, clinical research and life insurance.
Bajaj Allianz is a joint venture between Bajaj Finserv and Allianz SE, one of the world’s largest insurance companies. Bajaj Finserv is engaged in life insurance, general insurance and consumer finance business. Allianz SE has over 119 years of industry experience and is present in over 70 countries around the world.
Founded in 2001, ICICI Lombard is a 74:26 joint venture between ICICI Bank Limited, India’s second largest bank, and Fairfax Financial Holdings Limited, a Canada based financial services company. ICICI Lombard is a general insurance company offering a wide range of insurance policies including, business, liability, motor, travel, rural and health insurance products.
Founded in 1906, National Insurance Company Ltd (NIC) is one of the leading public sector insurance companies of India, carrying out non life insurance business. Headquartered in Kolkata, National Insurance has a large market presence in Northern and Eastern India.
Incorporated in 1938, United India Insurance Company Limited is a leading General Insurance Company of India. With headquarters based in Chennai, India, the company has more than three decades of experience in Non-life Insurance business. It was formed by the merger of 22 companies, consequent to the nationalization of General Insurance.
Jan
14
Malaysia makes Health Insurance Mandatory for Foreign Workers
Filed Under AXA PPP, Allianz, Health Insurance, Healthcare, Insurance Company, Medical Insurance, Uncategorized | 3 Comments
On January 1st 2011, the Malaysian Government made health insurance compulsory among the foreign working population, with the aim to eradicate the fraudulent and unpaid hospital bills that were piling up in the country. The Malaysian Government estimates the total figure to amount as high as RM$18 million, or USD$5.8 million.
From the first of January, Health Minister Datuk Seri Liow Tiong Lai, introduced the Foreign Worker Hospitalization & Surgical Insurance Scheme, making it compulsory for employers to provide health insurance coverage to foreign workers. Further to this, employers are enforced to provide workers compensation insurance to foreign workers, under the Foreign Workers Compensation Scheme.
With some employers budging to comply with the new scheme, Health Minister Datuk Seri Liow Tiong Lai reissued warnings to employers on 7th January, mandating that payment of premiums are made by March, or else foreign worker’s permits will not be renewed. Outstanding medical bills must be cleared, otherwise worker’s permits will also not be renewed.
The Foreign Worker Hospitalization & Surgical Insurance Scheme was introduced as a result of the ever-increasing fraudulent and unpaid hospital bills in Malaysia, said to be made predominantly by foreign workers receiving medical care in the country. Allegations have also been made against foreign patients profiteering from prescription medications, purchased from hospitals and artificially inflated to overseas customers.
The Foreign Worker Hospitalization & Surgical Insurance Scheme applies to all foreign workers in Malaysia. The scheme is limited to cashless claim services, within Government hospitals in the country. A set premium of RM150, or USD$49.07 has been applied for the insurance scheme, which covers up to RM10,000, or USD$3,270 a year in medical expenses. Those eligible under the scheme must be full time foreign workers, between the age of 18 to 59. Foreign workers covered under the insurance scheme, are entitled to hospital care, only within Non-Corporatised Malaysian Government Hospitals. Foreigners under the scheme do not need to provide any cash or guarantee letter from the insurer, they only need to turn up with their passport. The Malaysia Assurance Alliance Berhad (MAA) were appointed by the Ministry of Human Resources to partake in the design of both the Foreign Worker Hospitalization & Surgical Insurance Scheme (SKHPPA), and the Foreign Workers Compensation Scheme (FWCS).
There are around two million foreign workers registered in Malaysia, predominantly employed in the labour market, working in plantation farming as well as domestic maids. There is however a current shortage of maids working in the country, partly due to allegations of abuse among maids working in Malaysia. The collective figure of working foreigners, is however on the increase in Malaysia and the Government hopes to control this figure. Tuberculosis was once under control in Malaysia, however due to the migration of people from high risk countries the incidence rate is on the rise again. More than 17 thousand Tuberculosis cases are reported annually in Malaysia, with around14 % involving foreign workers.
Workers compensation insurance claims are very low among the foreign worker population in Malaysia. Only 75 % of foreign registered workers are said to be covered by workers compensation schemes by the employer. The Malaysian law mandates that employers must provide workers compensation insurance coverage to all permanent employees.
Employers are arguing that the premiums associated with the new compulsory health insurance mandate is too high, placing an unfair burden on employers. Deputy chairman of the Sabah Parti Keadilan Rakyat, Christina Liew argued “It is like penalizing the employers whenever the government imposes new policy with regard to foreign maids and plantation sectors… surely, the premium should not be so high as RM120 per worker”.
Although the coverage is relatively low, capped at a RM10,000, employers argue that the total amount in premium would exceed the hospital debt. Plantation farmers are debating the scheme and refusing to pay the premium. Shamsuddin, on behalf of the The Malaysian Employers Federation (MEF) are arguing “They have their own arrangement. Plantation workers’ medical fees are covered by the employers based on the law”, further adding “with more than two million foreign workers, the sum will total more than RM240 million annually.” Plantation farms are located outside of urban areas and generally have little access to hospitals. With plantation and farming estates paying costly premiums, food prices may inevitably increase.
There are 32 insurers said to be currently registered on the scheme. End of last year, following announcement of the scheme, insurance companies were competing to partake a share of the new market, however the scheme is said to be open to all insurers.
Those insurers who made their policies available on the 1st January include: Tokio Marine Insurance (Malaysia) Berhad; Malaysian Assurance Alliance Berhad; AXA Affin General Insurance Berhad; MUI Continental Insurance Berhad; The Pacific Insurance Berhad; Barjaya Sompo Insurance Berhad; Jerneh Insurance Berhad, Kurnia Insurance (Malaysia) Berhad; RHB Insurance Berhad; and Progressive Insurance Berhad. Others to be registered by February 15th include QBE Insurance (Malaysia) Berhad; Overseas Assurance Corporation (Malaysia) Berhad, Allianz General Insurance Company Berhad; Oriental Capital Assurance Berhad; and Sayarikat Takaful Malaysia Berhad.
Insurance Companies Mentioned:
Allianz General Insurance Company Berhad
Allianz General Insurance Company Berhad is a subsidiary of the Allianz Group, one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.
AXA Affin General Insurance Berhad
AXA Affin General Insurance Berhad is a subsidiary of the AXA Group, a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.
Malaysia Assurance Alliance Berhad
Malaysia Assurance Alliance Berhad (MAA) was incorporate in 1968, MAA is a subsidiary of MAA Holdings Berhad. MAA is one of the leading insurance and financial services companies in South Asia, providing services mainly within Malaysia, as well as in Indonesia and the Philippines.
Berjaya Sompo Insurance Berhad
Berjaya Sompo Insurance Berhad is an insurance provider, offering a range of products including health insurance, personal liability and motor insurance. The company originated in 1974, merging its services with Sompo Japan Insurance Inc, Japan’s second largest insurer, in 2006.
Established in 1971, Jerneh Insurance Berhad is a subsidiary of Jerneh Asia Berhad, (JAB) an investment holding company. Jerneh Insurance Berhad is based in Malaysia, providing insurance products in accident, health insurance, household and other insurance products and services.
Kurnia Insurance (Malaysia) Berhad
Kurnia Insurance (Malaysia) Berhad is one of the leading General Insurance companies in Malaysia. Previously known as Industrial and Commercial Insurance, the company was established in 1978 and purchased by its present owners in 1991. Kurnia Insurance (Malaysia) Berhad specializes in motor, medical, personal accident, home and business insurance products.
Progressive Insurance Berhad is a reinsurance company established in Malaysia. Founded in 1974, the company moved its headquarters from Sarawak to Kuala Lumpa in 1982. Today the company’s financial equity has been expanded following 94% stake jointly purchased by the Sabah State Government and Permodalan Bumiputra Sabah Berhad.
MUI Continental Insurance Berhad
Established in 1976, MUI Continental Insurance Berhad is a general insurance company. MUI Continental Insurance has branches throughout Malaysia, with leading US insurance underwriter CNA Financial Corporation, as one of its shareholders.
QBE Insurance (Malaysia) Berhad
A subsidiary of the QBE Group, QBE Insurance (Malaysia) Berhad is a joint venture company with MBf Insurans, merging in 2002. The QBE Group established services within Malaysia in 1905 and today it is one of the top 25 insurers and reinsurers worldwide. Headquartered in Sydney, Australia, QBE operates out of 49 countries around the globe, with a presence in every key insurance market.
RHB Insurance Berhad is a subsidiary of the RHB Banking Group, the first local bank established in Malaysia in 1913. RHB Insurance Berhad provides a range of general insurance services including health, property, automobile, personal liability, among other insurance products and risk management services.
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