Showing posts with label Life Insurance Businesses. Show all posts
Showing posts with label Life Insurance Businesses. Show all posts

Thursday, January 19, 2017

Ken research announced its recent report on, “Personal Accident and Health Insurance in Malaysia, Key Trends and Opportunities to 2020 “ Report provides a detailed outlook by product category and a comparison of the Malaysian insurance industry with its regional counterparts. It provides key performance indicators such as written premium, incurred loss, loss ratio, commissions and expenses, combined ratio, total assets, total investment income and retentions during the review period (2011-2015) and forecast period (2015-2020). The report also analyses distribution channels operating in the segment, gives a comprehensive overview of the Malaysian economy and demographics, and provides detailed information on the competitive landscape in the country. The report brings together research, modelling and analysis expertise, giving insurers access to information on segment dynamics and competitive advantages, and profiles of insurers operating in the country. The report also includes details of insurance regulations, and recent changes in the regulatory structure.
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General insurance is typically defined as any insurance that is not determined to be life insurance. General insurance or non-life insurance policies include personal accident and health insurance. The Malaysian personal accident and health insurance segment accounted for a 4.2% of the industry's direct written premium in 2015. The share of the insurance industry’s written premiums in 2012 was the lowest share of all the segments. Changing lifestyle patterns and the prevalence of diseases such as diabetes, respiratory disorders and other critical illnesses led to a rise in healthcare expenditure, which is generating a demand for health insurance. The threat of cancer, diabetes and respiratory disorders has encouraged personal accident and health insurers to expand their product portfolios. Rising levels of healthcare expenditure, increasing employment rates and industrial growth drove growth in the segment during the review period.
The Malaysian healthcare system comprises public and private healthcare services and the aging population is expected to drive the segment over the forecast period, due to an increase in demand for cover. The personal accident and health segment is moderately concentrated, with the 10 leading insurers collectively accounting for more than sixty percent of premiums in 2016. The costs associated with private healthcare exclude participation from lower income demographics. However, with industrial growth, positive employment opportunities and rising GDP, the nation’s middle class population is expected to increase over the forecast period and drive growth in the personal accident and health segment.
Rising consumer healthcare expenditure and limitations of public healthcare system will provide new areas of growth. Changing lifestyle patterns and an increase in the prevalence of a number of common diseases led to a rise in consumer expenditure on private health insurance during the review period, with an increasing proportion of the country’s population opting for voluntary medical policies, some of which are provided by employers. The main reason behind the rise in healthcare expenditure can be attributed to the fact that consumers are inclined to avail private healthcare in order to receive a better quality service. Private healthcare is therefore gaining in popularity, despite the guarantee of care under the government’s public healthcare system. The government’s healthcare initiatives ensure health insurance for the foreign working population. However, the insufficient number of public healthcare centres and technological limitations encourage foreign workers to purchase private health insurance.
Rising life expectancy and aging population will, drive growth Increasing life expectancy was a key driver of growth in the personal accident and health segment during the review period. Life expectancy is used to calculate the premium to be paid by policyholders when purchasing a life and personal accident and health insurance policy. According to World Bank data, in 1960, the average life expectancy of a Malaysian male was 59.4 years, and for females, it was 60.3 years. In 2011, this figure reached 72.1 years for men and 76.5 years for women. Life expectancy is expected to increase further by the end of the forecast period. This trend indicates a need for insurers to provide medical plans to cover policyholders beyond the current life expectancy, which will contribute towards the growth of the personal accident and health segment.
The boost in medical insurance premiums this year is a direct result of higher healthcare costs, according to agents who have to bear the bad news to their clients. Calling for insurance companies to justify the increase with facts and figures, Namlifa president James Bong, said the pricier coverage would also hinder Bank Negara’s goal to achieve a 75% insurance penetration rate by 2020 and burden the public healthcare system.
The Malaysian personal accident and health insurance segment is highly competitive, and contains both domestic and foreign insurers. LIAM suggested all stakeholders, including the government, insurance companies, private hospitals and doctors, as well as consumers work together to address the higher costs. Leading companies include: Allianz General, Berjaya Sompo Insurance, Etiqa Insurance, Lonpac Insurance, MAA Assurance, MSIG Malaysia, Tokio Marine Insurance (Malaysia) and Uni. Asia General Insurance. Increasingly, we see companies are involving themselves in the social media space, and undergoing a re-branding to lifestyle and wellness companies, and not just a company that sells insurance. In addition, the increasing and unparalleled progress in technology allows insurers the chance to really reduce and simplify their offerings to the customer, with a handy approach allowing them the chance to connect and integrate themselves into the lives of customers instantly from anywhere. 2020 will be the times of change, and both insurers and operators alike need to be keenly aware of the changes they face from 2016 and beyond.
Key Topics Covered in the Report:
Non-life insurance industry
Global life insurance
Life insurance businesses
Insurance sector worldwide
Malaysia non- life insurance market research
Non-Life insurance sector trends Malaysia
Malaysia General insurance regulations
Health insurance market research Malaysia
Health insurance demand Malaysia
Personal Accident Insurance Malaysia
For more coverage click on the link below:
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Contact Us:
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249

Promising Insurance Industry to Boost Reinsurance in Malaysia: Ken Research

Ken research announced its recent publication on, "Reinsurance in Malaysia, Key Trends and Opportunities to 2020 ". This report provides a comprehensive analysis of the reinsurance segment in Malaysia. It provides historical values for the Malaysian reinsurance segment for the report's 2011-2015 review period, and projected figures for the 2015-2020 forecast period. It offers a featured analysis of the key categories in the Malaysian reinsurance segment, and market forecasts to 2020. It provides a detailed analysis of the reinsurance ceded from various direct insurance segments in Malaysia, and the reinsurance segment's growth prospects. It analyses various natural hazards and their impact on the Malaysian insurance industry Make strategic business decisions using in-depth historic and forecast market data related to the Malaysian reinsurance segment, and each category within it. It can be used to understand the demand-side dynamics, key market trends and growth opportunities in the Malaysian reinsurance segment and to identify growth opportunities and market dynamics in key product categories. Finally, it is well descriptive of the insights into key regulations governing the Malaysian insurance industry, and their impact on companies and the industry's future.
As part of its efforts to promote the country and in particular the island of Labuan in East Malaysia, as new financial centre, the Malaysian government has opened its doors to international reinsurers and brokers. These entities, though, have to comply with the provisions of either the Malaysian Insurance Act or the Financial Offshore Act. The latter was promulgated to govern the development of Labuan as the newest financial centre in the region. Various incentives and benefits have been offered to attract overseas companies to set up operations in this free port where no sales tax, surtax, excise or import and export duties are levied. Among the overseas reinsurers who applied for and were granted licenses under the Malaysian Insurance Act to operate in Malaysia, based in the capital city of Kuala Lumpur are the Munich Re, the Swiss Re, Employers Re, Hannover Re and Gerling Global Re and Toa Re. These reinsurers are also expected to develop and bring in offshore or non-Malaysian business as the intention is for their operations in the country to be regional.
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Other reinsurers have also been licensed to operate in Malaysia under the Financial Offshore Act. Among other provisions under this law, the reinsurers involved must maintain a registered and manned office in Labuan. Presently, these reinsurers are allowed to maintain a marketing office in Kuala Lumpur, subject to labor restrictions and other regulations. Among the international reinsurers who have received licenses to operate in Malaysia under this act are the AXA Re, Copenhagen Re, Labuan Re, Sumitomo, SCOR, Tokio Marine Global Re and Partner Re.  Physical proximity of the local offices of international reinsurers to the Malaysian insurance companies obviously gives these reinsurers a great advantage over non-registered overseas reinsurers in terms of access to Malaysian reinsurance business. In addition, the guidelines issued by the Bank Negara, the insurance supervisory authority in Malaysia, on general reinsurance arrangements to be followed by the Malaysian insurance companies (issued 21st April 2000 and effective 1st June 2000) can be regarded as working in favour of the locally-registered reinsurers.
These guidelines were issued, in the words of the Bank Negara, to “promote the development of a sound and stable insurance industry, in particular, a mature and dynamic reinsurance market; and to “preserve the integrity of the Malaysian insurance market by protecting insurers and ultimately policy owners, from solvency threats arising from difficulties encountered in recovering reinsurance balances from reinsurers.” The major sections of the guidelines cover the topics of Appropriateness of Retention Levels; Security of Reinsurers; Spread of Reinsurers; and Appropriateness of Reinsurance Contracts. Among the salient provisions of these guidelines are:
  • The reinsurer must be legally set up in accordance with the laws of its home country and has been authorised to carry on reinsurance business in other countries and Malaysia is not precluded.
  • The use of various tools and publications to assess the capacity and financial strength of the reinsurer. In the case of overseas placements, insurers must ensure that the reinsurers they use for such placements must have a minimum of “A” rating by an accredited rating agency or have a combined paid-up capital and surplus of at least USD 150 million.
  • Total reinsurance cessions (facultative and treaty) to foreign reinsurers should not exceed 50% of the direct-writing company’s total reinsurance premium.
  • No one foreign reinsurer shall hold more than 25% of a risk in the case of a lead reinsurer and 10% of a risk in the case of other participants
  • In general, insurers shall ensure that their reinsurance arrangements fall in line with national aspirations and to the extent possible, accord priority to optimisation of the Malaysian insurance capacity followed by Labuan, before securing foreign reinsurance support. In addition, Combined Liability Excess of Loss covers are retained almost 100% within the country.
Hence, even without restrictions on the amount and kind of business, which can be reinsured overseas, it is apparent that less and less business will come out from the Malaysian market. With the strengthening of the Malaysian domestic reinsurance market, Malaysia, through its locally registered reinsurers and intermediaries, is able to attract inward business from overseas and is able to challenge Singapore and Hong Kong to become the newest regional reinsurance centre for Southeast Asia.
Warren Buffett’s Berkshire Hathaway is set to enter the Malaysian reinsurance market, having received a license from Labuan FSA to provide non-life products in the country, through its Berkshire Hathaway Specialty Insurance Company (BHSI) arm. Berkshire Hathaway has been expanding steadily into Asian and Pacific insurance and reinsurance markets, as the firm seeks to diversify globally and source premiums from the faster growing markets of the world. After putting down roots in Singapore, Hong Kong, and Macau, they feel pleased to further expand their operations in Asia and bring facultative reinsurance capacity and new products with the backing of our strong balance sheet to selected Malaysian insurance partners. With the opening of Malaysian office, they shall continue to deepen the underwriting and claims capabilities in this region. Now with license to sell reinsurance in Malaysia in hand, Berkshire Hathway has established an office in the capital Kuala Lumpur, naming Gaithrie Nandrajog as Branch Manager and Koo Kang Wuu as Executive & Professional Lines and Business Development Manager. Through this Asian expansion Warren Buffett is laying a framework to provide its insurance and reinsurance products more widely into these markets, which is essential if the firm is to take advantage of economic and industrial growth in the region.
Key Topics Covered in the Report:
Non-life insurance industry
Global life insurance
Life insurance businesses
Insurance sector worldwide
Malaysia non- life insurance market research
Non-Life insurance sector trends Malaysia
Malaysia General insurance regulations
Motor insurance market research Malaysia
Property insurance sector Malaysia
Health insurance demand Malaysia
Malaysia automobile industry research
Malaysia four wheeler demand
For more coverage click on the link below:
Contact Us:
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249