Exposure to Dubai World - PRUlink global funds

Dear Wealth Managers/Planners & Quality Leaders/Agents,

Please be informed that as of 27 November 2009, none of the PRUlink global suite of funds under Prudential, namely PRUlink Asia managed fund, PRUlink Asia property securities fund, PRUlink Asia local bond fund and PRUlink global market navigator fund have exposures to any Dubai related companies or holdings (e.g. Dubai World, Dubai government bonds, etc).

This announcement follows the global economic slump from last year that has derailed the growth of the city-state, where its main investment arm, Dubai World, revealed it was seeking to delay a $60 billion debt. In addition, The Star newspaper and industry say the debt payment crisis of Dubai World will not adversely affect the Malaysian finance industry as it has limited exposure to the situation.

You can be rest assured that policyholders who have PRUlink global investor account, PRUlink global or PRUlink global education policies that invests in the abovementioned funds will not be affected in any way. Please inform your customers accordingly should they have any concerns or queries.

Thank you.

Takaful Health Anyone?

Excerpt from The Star, November 16 2009

Published: Monday November 16, 2009 MYT 2:44:00 PM
Updated: Monday November 16, 2009 MYT 2:58:22 PM

Prudential BSN Takaful launches new medical plan

KUALA LUMPUR: Prudential BSN Takaful (PruBSN), introduced its latest medical plan - the Takaful Health - a "first" for the Takaful industry in Malaysia with its annual No Claim Bonus (NCB).

PruBSN is a joint venture company between Bank Simpanan Nasional (BSN) and Prudential PLC (Prudential).

Its chief operating officer Azim Mithani said Takaful Health provides comprehensive hospital and medical coverage until age 80 as an extension to the Takafulink and Takaful Cerdik, the company's pioneering investment-linked protection and educational insurance plans respectively.

"However, unlike other medical plans, Takaful Health also pays our customers to stay healthy through its innovative NCB feature of up to RM500, depending on the package.

"Basically, if they don't make a claim, we pay our customers," he told reporters after the product launch here on Monday.

The new product has received an encouraging response since commencing sales on November 12.

"As such, PruBSN expect it to be a significant contributor to our business," he added.

He also said there was enormous potential for the Takaful industry to grow, due to the still low take-up by Muslims for Takaful coverage.

"I am confident that with the strategies in place, we will be able to help accelerate the development and growth of the Malaysian Takaful industry," he added.

Azmi also said PruBSN will also be introducing several products next year.

PruBSN has about 300,000 customers at present. - Bernama

Retirement & Malaysians

Excerpt from The Star 22nd August 2009

Saturday August 22, 2009

Malaysians less confident about preparing for retirement


LOTS of working adults are paralysed when it comes to planning for retirement. Most people will delay this as long as they can, possibly due to their lack of knowledge about financial matters.

Generally, the more knowledgeable an individual, the more confident he is in taking control of his financial destiny, which usually is about securing a comfortable retirement.

A recent study by the non-profit Employee Benefit Research Institute in the United States found that only 13% of Americans said they were confident of a comfortable retirement – drastically reduced from 27% in 2007.

Figures in Malaysia show a similar sentiment. The AXA Life Outlook Index findings for 2009 indicate that Malaysians’ satisfaction with their preparation for retirement has dropped. In 2007, 23% were confident about their retirement years, but this has since dipped to 14%.

While many working Malaysians are reasonably financially literate, certain groups are less so and therefore less confident in managing their finances. This is a worry considering that the elderly make up an increasingly large proportion of our society.

Demographic and socio-economic forecasting provider Global Demographics Ltd forecasts senior citizens (those 50 years and above) to increase from 15% to 25% of the total Malaysian population over the next 20 years.

As the Malaysian population ages and retirement looms for many, the issue of financial literacy in a retirement planning context has become particularly salient.

Abacus for Money chief executive officer Carol Yip says that there is no single product or solution available to guarantee one’s comfortable retirement.

She notes that the main asset likely to be available to most working Malaysians upon their retirement is their Employees Provident Fund contribution.

Other assets may include property, shares, unit trusts, term deposits, inheritance, insurance, government pension as well as emerging private pension funds.

Yip asserts that individuals must increase their level of financial literacy so that they can go cherry-picking from the wide array of products available in order to ensure a comfortable retirement.

Besides the usual means of consulting financial planners and reading financial magazines to improve financial literacy, Yip calls upon employers to provide training to their staff in order to empower them with financial knowledge to plan their future.

Yip also encourages retirees who are in the early stage of retirement to equip themselves with financial knowledge in order to wisely invest their money so as to protect it from inflation as well as to provide recurring income over the medium term.

The senior citizen population of 50 and above in Malaysia as well as regionally is said to be rapidly expanding into a large, affluent market.

MasterCard Asia Pacific, in a study, estimates that the spending power of the retired population in Malaysia to exceed US$10bil (RM35bil) by 2015 – more than double the figure from 10 years before.

Madam Chong (not her real name), 56, who recently retired but is still an active investor with a moderate risk profile, was looking to diversify her portfolio.

The ideal product that she is looking for is one that can offer recurring income with double-digit returns annually, monthly or quarterly. It should also be capital-guaranteed as well as easy to liquidate with no penalties over five to ten years.

“I was prepared to consider regional investments with a slightly higher risk,” she says.

After looking around, she discovers that there are no such products that meet all her criteria except for two that offer returns between 6% and 7% per annum, but require high deposits of RM250,000.

“There are a couple of insurance companies that offer returns of about 4% annually with smaller deposits,” Chong says.

Given the current economic uncertainty and the absence of investment products specifically catering for retirees, Chong reiterates the need for retirees to be financially savvy instead of just depending on advice from third parties to manage their wealth.

Insurance claims on A (H1N1).

Excerpt from The Star, 21st August 2009

Friday August 21, 2009
DPM: Clarify if flu victims can make medical claims

PAGOH: Insurance companies will be asked to explain whether those infected with the A(H1N1) influenza can make claims for their medical expenses, said Deputy Prime Minister Tan Sri Muhyiddin Yassin.

This was necessary as the insurance companies were subjected to insurance laws and agreements with policy holders.

“I am not sure about the agreements which are usually in fine print,” he said, adding that it should be checked if the Influ-enza A(H1N1) fell under diseases not covered by the policy.

Muhyiddin said the insurance director-general should check on the matter and hold discussions with insurance companies.

He was asked to comment on reports that many insurance companies were declining medical claims submitted by those infected with the disease.

Health Minister Datuk Seri Liow Tiong Lai also urged insurance companies to include death due to A(H1N1) infection in insurance policies for their clients regardless of whether they were new or old policy holders.

He urged insurance companies to do the same for medical treatment for cases relating to the virus, adding that demand for health insurance will increase because of the pandemic.


Excerpt from The Star, 15th August 2009

Saturday August 15, 2009

Protect yourself and your liabilities

Comment by TAY HAN CHONG

PAYING yourself first will ensure that there is savings, but that may not be sufficient. Sure, it provides the resources for one to better plan for the future but on its own, savings is very low yielding though it is liquid and “safe”.

Just like having a good workout physically, we cannot kickstart from a sedentary lifestyle straight to running a marathon. It takes a bit of building up before one can reach a certain level of fitness.

My father-in-law is a personification of “good life”, in the traditional Chinese sense. After sustaining a spinal injury at work, he swapped roles with my mother-in-law and became the stay-home dad. He kept himself active for 20 years looking after the home, his girls and ailing mother. However with the daughters grown up and married, his lifestyle has gone from active to sedentary. Unfortunately, his appetite remains hearty despite attempts to change his eating habits, and naturally his weight has piled on.

As luck would have it, he had problems with his insurance application earlier this year and through the urging (and nagging) of his wife and daughters he became determined to re-gain his fitness. Being a proud man, he rejected help from my wife’s ex-personal trainer. However, in his eagerness he pushed himself too hard physically and injured his bad back and shoulders as well. The next three months was thus spent undergoing physiotherapy.

Two lessons from this – (1) Age issue aside, he did not gradually build up his foundation before attempting more advance and strenuous exercise, thus straining himself. And (2) Don’t wait till it’s too late to get started.

Financial or money workout is not any different. I am encouraged to move beyond savings, the core focus of my money workout #1 – paying yourself first, to other aspects of money workout to provide a full spectrum of financial advice.

So to build a good foundation of financial strength, I shall start from protection. Protection is, in my mind, the basic level of wealth management. This is even before one embarks on investing to grow one’s wealth. Let’s start with a cliché – it is not about someone dying, it is about their loved ones continuing on with their lives.

Many people do not know what policies or coverage they have. Some don’t even bother to insure themselves because they think insurance is a waste of money! And to dismiss all the constant hounding from insurance agents, we have even perfected the script “got enough insurance already la” which rolls off our tongues without batting an eyelid. Many a times, we convinced ourselves so well that we really don’t know otherwise.

It is all about contingencies and with life’s uncertain twists and turns, who is to know what might happen? It is therefore important to ensure that we have adequate protection as it provides peace of mind knowing that if anything were to happen, our loved ones will not be left out in the cold.

When should one buy insurance? One should and could only buy insurance when one doesn’t need it, yet! When you need insurance, you will not be able to purchase it anymore. Pre-exisiting conditions are normally excluded from coverage. So today is the best day to start, protection planning is all about meeting contingencies. It’s everything about living too long, dying too young, or living with impaired health.

Here’s my guide: Money Workout #2 – Protect Yourself. How do we start?

Life coverage is about providing for loved ones in case of death or total permanent disability. How much life coverage is sufficient? I don’t subscribe to the rule of thumb that some insurance salespeople use to frighten you with – that is for coverage to be about 10 years of one’s income. It probably would be closer to 5 years of one’s expenditure (and not income). Hopefully after 5 years, the family would have adjusted to the loss and re-established their lifestyle without the deceased.

More often than not, the insurance provides for 5 years while other forms of savings and investments can also provide for a few more years of expense. If more coverage is needed, it might be boosted based on one’s ability to pay the additional premium or, alternatively consider term insurance. So if you spend RM5,000 a month or RM60,000 per year, the suggested minimum life insurance is RM300,000. There is no such thing as too much coverage, but there is the minimum amount that would be considered sufficient.

Critical Illness is about living with impaired heath. A definite must-have is critical illness rider to life insurance which usually covers the common illnesses such as heart attack, stroke and diabetes. When one is suffering from such critical illnesses, it is already tough on the family particularly if one is also the bread winner. Not to mention the sudden spike in medical costs which can increase the normal monthly expenses by many folds. Generally, I would imagine that the minimum amount needed would be in the range of RM300,000-RM500,000, especially if you take into consideration long-drawn illnesses such as kidney failure or a heart attack that may result in impaired health (and perhaps loss of income and job).

While on the topic insurance, I shall quickly jump into Money Workout #3 – Protect against your liabilities. This is about protecting yourself against outstanding liabilities, should anything happen to you. While we may provide for our loved ones, sometimes we forget that we have debts and liabilities which would be transferred to our loved ones as well. In this case, I provide one clear cut example.

Liabilities are what we owe others. And usually the largest debt that one has is the mortgage. And since most people have only one house, the mortgage is usually on the house that we call home. So it is important to make sure that if anything should happen to you, your biggest liability is totally paid off to avoid the burden on the family. Generally as our debts are repaid, this liability also falls over time, so the protection needs to be reducing in coverage over time. The bottom line is to have insurance that matches one’s liability closely. In this aspect, more is not necessary but less would be a burden.

Buying an insurance can be a taboo for some, since many tend to believe mishaps happen only to “others”. But a joke I came across smacks of reality: Needing insurance is like needing a parachute. If it wasn’t there the first time, chances are you won’t be needing it again.

I consider insurance to be the foundation of one’s overall financial wellness, even before embarking on investing. This provides a peace of mind for you and your family. Just look at the faces of your children and you will know that you must build this foundation well. Once done, and the remaining money can be better used to make more money, provided you have the risk appetite.

Tay Han Chong is senior vice-president and senior head of UOB’s personal financial services division


Excerpt from The Star, 9th August 2009

Sunday August 9, 2009
Money talks in cancer

A breast cancer survivor reveals its painful burden on family resources and how having health insurance saved her life.

YOU’VE just been diagnosed with cancer, and the doctor is discussing treatment options. Should cost be a deciding factor?

The prices can be staggering. Consider this scenario: There are two equally effective options to battle cancer, the kind spreading through the body – but one costs RM$60,000 more than the other.

One in eight people with advanced cancer turns down recommended care because of the cost, according to a new analysis from Thomson Reuters, which provides news and business information. Among patients with annual incomes under RM$40,000, one in four in advanced stages of the disease refuse treatment. Do they pay out of their own pockets, sometimes in the thousands of ringgit? Or do they forgo the therapy to preserve what modest assets they may have for their families’ futures?

Cancer care is expensive.

My first encounter with cancer was when my dad was diagnosed with stomach cancer in 1998. Our battle lasted six months before he succumbed to it. But our financial woes lingered long after that.

Dad was a 70-year old pensioner when he was diagnosed with advanced stomach cancer. It was a dreadful disease to have. Upon his diagnosis, we were determined to give him the best medical care possible and do everything we possibly could.

It was a big commitment, and we soon realised that our means to fulfill that commitment were rather limited. The six months after diagnosis was a very trying period for all of us. In those six dark months, all our savings were depleted and credit cards used to the maximum.

I still remember it as though it were yesterday. My family and I were gathered in uncomfortable chairs in the gloomy hospital lounge. It was late in the evening and we were at our wit’s end. Dad had a terrible two days of pain and the doctors informed us that we were fighting a losing battle. “Take him home,” they said, “you’re wasting your money.” We were physically tired, emotionally drained, and financially exhausted.

We had by then exhausted our resources. Yet we were unwilling to take him home ... it sounded so final. We hoped, in his last days, to keep him as comfortable as possible. How were we going to proceed? Our bank accounts were dry and credit cards used to the limit.

We considered many options – mortgaging the house, applying for personal loans, borrowing some money from friends and relatives….

We decided the next morning we were going to do something about it.

But the next morning, dad passed away. It was as though he knew that we had reached the end of our resources. It took us a few years after that to emerge from the financial crisis that the cancer had caused.

We had overlooked and underestimated the financial burden of cancer and its impact on my dad, the patient, and us, the family. An individual does not face cancer alone, a family does. My dad’s stomach cancer had cost him his life. We all miss him dearly. At the same time, the cancer had cost us a substantial amount of money, for my dad did not possess a health insurance or medical policy.

Having witnessed our struggles, my church member, an insurance agent, got our whole family insured. And what a blessing it was.

In 2008, I was in Wellington, New Zealand, working on my doctoral thesis when I was diagnosed with aggressive, advanced breast cancer after a needle core biopsy. Having discussed my options with the breast consultant over there, I decided to return home for treatment.

All the bad memories of the dark moments we had battling with my father’s stomach cancer came rushing back. I remembered the physical fatigue, emotional pain, and the financial drain cancer can cause. I shuddered. It took us so long to climb out of the financial hole cancer had caused and now I was being sucked into it again. I knew financial cancer could mentally kill me faster than breast cancer.

Being a civil servant, I first explored my treatment options in our public hospitals. Because of the large number of patients they were already servicing, I was put on a three-month waiting list. As I explored other avenues, the deciding factor for treatment was cost. Each doctor discussed my treatment options and the cost. It was a grim picture they painted.

By now I was feeling so lost and overwhelmed. I couldn’t think. My family was frantic.

I felt like I was drowning. I was lucky; I had a cushion to fall back on. My health insurance came to the rescue. My medical card enabled me to get prompt treatment, which is an important factor in fighting cancer. My medical card gave me the freedom to find the best doctors and best treatment available in town. My medical card helped save my life.
I soon discovered that there is much more to the cost of treatment than hospital, physician, and medication bills. Out-of-pocket expenses for transportation, food supplements, over-the-counter medications, distractions, telephone bills, complementary medicines, and many other hidden costs can be a significant drain on finances. The total financial damage came close to RM80,000. Because my medical card absorbed the bulk of the cost that was incurred during the treatment, the out-of-pocket expenses were more manageable.

I am so very thankful to my insurance agent who got me insured. Because of my medical card,

I could focus on getting better and not waste my energy worrying about finances and the astronomically expensive treatment.

Having triumphed over my cancer, I truly believe that God, and my dad, are watching out for me. They are doing that through the blessings of family, friends, my doctors, and most importantly, health insurance.

For further information, e-mail starhealth@thestar.com.my. The views expressed are those of the writer and readers are advised to always consult expert advice before undertaking any changes to their lifestyles. The Star does not give any warranty on accuracy, completeness, functionality, usefulness or other assurances as to the content appearing in this column. The Star disclaims all responsibility for any losses, damage to property or personal injury suffered directly or indirectly from reliance on such information.

A(H1N1): Lets Be Serious - 26 Deaths

Excerpt from The Star. 9th August 2009

Published: Sunday August 9, 2009 MYT 1:38:00 PM

A(H1N1): Eight more deaths reported

KOTA KINABALU: The number of deaths from Influenza A (H1N1) virus rose to 26 nationwide on Sunday with the Health Ministry confirming that eight more people have died from the deadly virus.

Health Minister Datuk Seri Liow Tiong Lai said the deaths, which between Aug 3 to 8, were confirmed to have resulted from the deadly virus following test results. (One person died on Aug 3, two on Aug 5, four on Aug 6 and the last one on Aug 8)

He said the latest eight deaths involved mainly people in the high risk group though there was one 20-year-old college student who was found dead at her hostel about a week after obtaining outpatient treatment at a hospital.

Among the dead are two Sabahans - a 24-year-old obese woman from Ranau who died of pulmonary oedema after a bout of flu and fever while the other involved a 74-year-old man with a history of heart problem who died of pneumonia and pulmonary oedema.

The others deaths were a 47-year-old patient with asthma in Sarawak and a 37-year-old obese male who died of broncho-pneumonia at the hospital in Johor Baru.

Liow said as at Sunday, there were a total of 62 patients warded in hospitals with 13 in the intensive care units, while an additional five were waiting for test results. The Health Minister also said that in Sabah, 402 confirmed cases had been detected, with seven patients still in hospital and one in ICU.

He said 35 schools had also been closed to date.

Life Insurance. Rebate?

Excerpt from The Star, June 25 2009

Thursday June 25, 2009

Extend rebate system to life insurance too
Making a Point - A column by Jagdev Singh Sidhu

MIDDLEMEN used to do a thriving business a long time ago. Filling up forms or getting your way around a government department or agency seems smoother once the services of a runner is employed for a fee.

That concept of agents is well entrenched in many facets of the private sector too. There is an army of agents out there, selling unit trusts to insurance policies. And business has been good.

These services cost a fee, which agents derive income from, and when Bank Negara decided to implement rebates for the purchase of general insurance covers by bypassing those agents, there was an outcry from them.

For motor insurance, those rebates start at 5% of premiums for the first year and extend to 10% per year thereafter.

For a person who is paying thousands of ringgit for insurance coverage, that sum of money represents a tidy saving.

However, this benefit should also be extended to the life insurance business. Years ago, I walked into a large insurance company wanting to buy a policy for my son. I knew what I wanted but was told that I could not buy a policy directly from the company and had to employ the service of an agent.

Knowing fully well that a slice of my premiums would be taken up as agents’ commission, I wondered if there was any other way around it as I felt that an agent should not receive my money for really just submitting my application for insurance coverage.

Whereas that cosy relationship might still be practised by some insurance companies, I was glad to also learn there is a choice out there now for individuals to bypass agents and buy life policies directly from an insurance provider. The number of people seeking direct purchasers should only grow as financial acumen of the public improves.

There should be some sort of savings if people choose to go directly to a company. If there is none, then the company should somehow differentiate such a policy holder from one that pays for the service of an agent.

An insurance company would retain a larger amount in premiums from those who deal directly with them instead of with agents. Hence, the returns or benefits for such policyholders should be higher.

As for the agents, they still have a role to play. Not everyone will want to go directly to buy their own life or general insurance policy and they can still provide a service to customers. But as is the case with a number of other industries, the role of a pure one-product agent might be a sunset industry.

Avenues for skills upgrades are plentiful in today’s market. Financial planners or wealth planners can offer more value-added services to their clients than maybe a pure one-product salesman could.

And by giving an option of a more holistic suite of services, customer retention maybe a little easier to deal with for the new generation middleman.

# Jagdev Singh Sidhu is a deputy news editor in the Star. He is staring at a huge insurance bill to pay by the end of this month.


Excerpt from The Star, 23rd June 2009

Tuesday June 23, 2009

Changes to spur insurers’ revenue

‘Transformation’ of agents will protect consumers’ interest

PETALING JAYA: The changes that the insurance sector is going through may help boost its revenue and productivity and enhance the concept of need-based selling, industry players said

The move is in line with Bank Negara’s call to enhance professionalism in the industry and safeguard customers’ interest, they added.

The exercise involves the “transformation” of agents into professional wealth planners who will also sell products like unit trusts and takaful and offer will-writing services apart from selling insurance.

Prudential Assurance Malaysia Bhd chief agency officer Lai Leong Pin said since embarking on an agency transformation exercise last year, the company had converted about 1,800 agents to wealth planners from a total agency force of about 9,000.

“This year, we plan to train an additional 1,800 to 2,000 agents to become wealth planners. In the next five years, we expect to transform between 40% and 50% of our total agency force into wealth planners,” he said in interview.

“Besides boosting the company’s revenue, these professionals will also enhance the productivity of the agency force. Last year, our agency’s average productivity was among the highest in the industry, with about RM69,000 in first year new business premiums.’’

To be qualified as Prudential wealth planners, Lai said an agent must be productive, have met various licensing requirements and undergo external or intensive in-house training.

The in-house training provided by its PRUbusiness academy covers wide-ranging modules that include introduction to wealth planning concepts, products and technicalities and personal effectiveness.

For external programmes, the candidate must have sat for the Registered Financial Planner or Certified Financial Planner examinations. In terms of productivity, the agent must bring in new business premiums worth at least RM200,000 annually.

Meanwhile, Great Eastern Life Assurance (M) Bhd is targeting to have at least 3,000 Life Planning Advisors (LPAs), similar to the wealth planner concept, by 2010.

Its director and CEO Koh Yaw Hui said since launching the LPA programme in December 2006, the company had 600 agents certified as LPAs as of last year.

“The programme is one of the key pillars of the Agency Transformation Project. As such, we are investing substantially to ensure that the professionalism and productivity of our agency force is elevated.

“This is also in line with Bank Negara’s call for higher professionalism from agency force in conducting their business to ensure that consumers’ interests are constantly being looked after,’’ he said.

According to Koh, the LPAs are trained to serve the clients’ financial needs in the core areas of protection, savings/investment, education, and retirement.

Going forward, he said LPAs would be trained under the Great Eastern Life Planning Advisory Service Centre to provide them with comprehensive financial solutions in estate planning services, will writing, unit trusts and tax consultation to penetrate high net worth clientele base.

This would allow them to become full-fledged multiple financial service providers within the next one year or so, he said.

Manulife Holdings Bhd group CEO Michael Chan said he expected 300 of the company’s total agency force of 1,500 to be certified as wealth planners by year-end.

The certified wealth planners were projected to constitute 50% of its agency force by 2010, he added.

“It is estimated that only 15% of agents in the industry are familiar with selling wealth management products. Therefore, proper training is required for an agent to obtain a licence and understand the financial planning process.

“We have a dedicated centre to train and ‘transform’ our agents into wealth planners,’’ Chan said.


Excerpt from The Star, Monday June 22 2009

Monday June 22, 2009

A(H1N1) :School in KL closed

KUALA LUMPUR: SJK (C) Jalan Davidson at Jalan Hang Jebat here has been closed for a week after two local transmissions of the influenza A(H1N1) virus were detected in the school.

Two other schools with infected students – SRK Assunta 2 in Petaling Jaya and SM Section 9 Shah Alam – will also be closed if authorities discover local transmission of the virus there.

Health Minister Datuk Seri Liow Tiong Lai said eight cases of the virus were confirmed yesterday, including five schoolchildren – an 11-year-old from SRK Assunta 2, a 16-year-old from SM Shah Alam, and three at Class 5 I of SJK(C) Jalan Davidson.

He said all 2,100 students and staff members of SJK(C) Jalan Davidson had been home quarantined, after the National Security Council chaired by Deputy Prime Minister Tan Sri Muhyiddin Yassin agreed to close the school until Friday.

Speaking to reporters after meeting with the school board and parent-teacher association (PTA) here yesterday, Liow said the quarantined students and staff members were not allowed to visit public or crowded places. Students would also have to skip tuition classes for a week.

“They should also have less contact with their family members. They are quarantined but not their families,” he said.

“This action is necessary to prevent more cases among the students and staff members. They must stay at home and follow the advice the ministry has provided,” he added.

Liow said the two 11-year-olds from SJK (C) Jalan Davidson who were the 49th and 50th cases in the country, contracted the virus from a classmate who tested positive on Friday after recently returning from a vacation in Melbourne.

PTA chairman Dr Lai Boon Hai said several members would be on standby at the school from 6.30am today to give out information on the closure and inform as many students and their parents as possible.

“All PTA members are fully behind the decision by the ministry to close the school for one week. It’s for the safety of the children,” he said.

Liow said anyone who fell sick or had a fever must inform the Federal Territory Health Department at 03-2698 3757 or 019-229 9397. The department has a health officer on 24-hour standby.

“At the same time, practise good hygiene and cleanliness by covering your mouth with a tissue when coughing or sneezing. Also, wash your hands with soap,” he said.

On whether sterilisation of the school areas was needed, Liow said it was not necessary as the virus could only survive in the open for a maximum of eight hours.

Earlier, when opening an A(H1N1) awareness campaign in Batu 11, Cheras, organised by the Serdang MCA division, Liow said the ministry’s guidelines recommended schools to be closed if a local transmission was detected.

Among the new cases reported yesterday was a 33-year-old Thai national who is crew member on a cargo ship which anchored at Port Klang on June 19.

Health director-general Tan Sri Dr Ismail Merican said the man was found to have been ill since June 17 and he and 22 other crew members were under quarantine on board the vessel.

The patient was later sent to the Tengku Ampuan Rahimah Hospital in Klang after he tested positive for the virus, Dr Ismail added.

High Cost of Living

Excerpt from The Star, 11th June 2009

Thursday June 11, 2009
KL and JB among most expensive Asian cities

SINGAPORE: Kuala Lumpur, Johor Baru and George Town are among the cities which are gaining reputation as the most expensive ones in Asia.

An ECA International survey on the 50 most expensive Asian cities ranked Kuala Lumpur at number 38, Johor Baru (40th) and George Town (42nd).

Globally, Kuala Lumpur is placed 210th, Johor Baru (216th) and George Town (218th).

According to ECA, strong currencies were pushing up the cost of living in Asian locations.

Tokyo, it said, remained the most expensive city in Asia due to the appreciation of the yen against other major currencies.

Others are Beijing (ranked 5th), Shanghai (6th), Hong Kong (7th) and Singapore (10th).

ECA regional director for Asia Lee Quane said the strengthening of Asian currencies was the factor which contributed to the region being more expensive for visitors than it was a year ago.

The cost of living survey is carried out by ECA bi-annually by comparing a basket of commonly purchased consumer goods and services in 370 locations worldwide. — Bernama

General Hospital

Excerpt from The Star, Sunday, 31st May 2009

Sunday May 31, 2009

Dad to file complaint against hospital over daughter’s death

RAUB: A distraught father plans to file a complaint against the Raub General Hospital for alleged negligence after his six-year-old daughter died following treatment for headache, stomach pains and vomiting.

Lai Han Yuen said he took his daughter Mei Ying to the hospital after she complained of discomfort at about 4pm yesterday.

The medical personnel who attended to Mei Ying, gave her six bottles of medicine but her condition did not improve even after she took the doses, he said.

“My daughter was still complaining of headache and pain in the stomach after consuming the medicine and she vomited again. I took her back to the hospital at about 7pm,” he said at his house here.

This time, she was sent to the emergency ward where she was placed on a drip and a blood sample was taken.

However, Mei Ying’s condition worsened and at about 10pm, three doctors who attended to her advised that she be admitted. She was pronounced dead at about 3am.

Lai said he was unhappy with the way the case was handled and he claimed the medical personnel had not conducted a thorough examination on his daughter.

He wants the hospital to provide a proper explanation and state the cause of death.

Mei Ying’s mother Foong Chia Ling, was too distressed to speak to reporters.

Need Insurance?

Excerpt from The Star, 27th May 2009

Study confirms mothers-in-law are the chief cause of divorces

KUALA LUMPUR: Every married person knows it, but a local study has confirmed it – mothers-in-law are the chief cause of divorces, especially in the Indian community.

Data in the Malaysia Community and Family Study 2004 by the National Population and Family Development Board (LPPKN) revealed that “meddlesome in-laws” is the number one reason why Indian couples get divorced.

It is also among the top three factors for divorce among the Malays and Chinese. The other two factors are incompatibility (42.3%) and infidelity (12%).

“Interference by in-laws is the main reason for Indians to divorce. It is the top-ranked reason at 30%,” said LPPKN director-general Datuk Aminah Abdul Rahman when presenting a paper on Malaysia’s family profile and its effects at Institut Kefahaman Islam Malaysia yesterday.

Infidelity is the marriage breaker among the Malays and Indians but it is tolerated among the Chinese.

“Among Malays, the second most common reason is infidelity and refusal to put up with polygamy,” she said.

“Among the Indians, infidelity is the second highest ranked reason for divorce at 25%,” she said.

However, the Chinese considered infidelity as the least crucial reason for a divorce.

Cheating was at the bottom along with health and gambling addiction at 4.2%.

Surprisingly, abuse is not a reason for divorce among the Malays and Chinese, but is a reason among Indians at 5%.

“Another overall reason which ranked high among the three races at 11.5% is ‘not being responsible’,” she said.

Although it is common perception that the family institution is quite fragile and divorces are rampant, data shows otherwise - only 0.7% of the population was divorced in 2000.

The data shows that divorce is more likely to happen to those under 25 and above 40.

Meanwhile, Women, Family and Community Development Minister Datuk Seri Shahrizat Abdul Jalil said that more Malaysian women were choosing to marry later in life and it could cause a reduction in fertility rate and an ageing society.

“The National Family Policy and its action plan will address this issue of late marriages,” she said.

The policy would be presented to the Cabinet soon.

Recruit and Grow

Excerpt from The Star,May 22nd 2009

Friday May 22, 2009
Prudential’s new business sales up 17%

KUALA LUMPUR: Prudential Assurance Malaysia Bhd has posted a 17% growth in new business sales to RM122mil in the first quarter of 2009 compared with RM105mil in the same period last year, it said in a statement. — Bernama

The company’s new business annual premium equivalent (APE), which consists of retail life insurance sales and takaful contributions, rose to RM122mil from RM105mil previously, it said in a statement.

“These results once again demonstrate the strong fundamentals and excellent momentum of Prudential’s business in Malaysia,” said PAMB chairman Tony Wilkey, who is also chief executive, insurance, Prudential Corp Asia.

He said the company’s aggressive recruitment drive, together with systematic implementation of sales and marketing efforts to improve agency activity, continued to have a positive impact on its performance.

”We have successfully recruited over 500 new agents in the first quarter of the year, bringing the total of our agency force to 9,766,” Wilkey said.

”APE sales per active agent also increased by 10%,” he said, adding that the positive growth was also supported by strong consumer demand for protection and health products. — Bernama

Do We have Options?

Excerpt from The Star, May 8, 2009

Friday May 8, 2009
No wrongdoing in death of boy, says KL Hospital

KUALA LUMPUR: The Kuala Lumpur Hospital (KLH) said an internal inquiry had ruled out the allegation made by the family of the late P. Thirishan Raaj that the seven-year-old boy died after being given a prescription overdose by a government doctor.

Its director Datuk Dr Zaininah Mohd Zain, who chaired the inquiry with a panel of senior experts, said in a statement yesterday that based on the symptoms presented, clinical findings and investigation results, the allegation of paracetamol overdose could not be substantiated.

“The laboratory investigations for liver function test showed no evidence of liver injury due to paracetamol overdose,” she said.

The family made the allegation in a newspaper report on April 30, and his grandfather Datuk N. Muneandy claimed that the boy was taken to the government clinic after coming down with fever on April 24 but on taking his medicine three times, he became weak and dizzy.

Muneandy further claimed that his grandson was taken to a private clinic on April 25 but went into a coma the same evening before being pronounced dead at KLH on April 29.

Dr Zaininah said the clinical findings and investigation results revealed that the child’s weight was approximately 20kg and he had ingested 2gm (2,000mg) of paracetamol, and according to the British National Formulary March 2008 Edition, as little as 150mg/kg of paracetamol taken within 24 hours may cause severe hepatocellular necrosis.

“Therefore the ingested dose of 2gm of paracetamol would not cause lethal toxicity,” she said.

Touching on the family’s claim that Thirishan Raaj’s medical report had gone missing, Dr Zaininah said the patient’s medical record was being kept in safe custody by the hospital authority in the event of medico-legal activity.– Bernama

Where Are We Going?

Excerpt from The Star 27th April 2009

Change comes to local financial services industry

PETALING JAYA: The local financial services industry will be undergoing several changes over the next few years to enhance its role as an enabler and catalyst for growth as well as to strengthen the local economy’s linkages with other economies.

These changes would include the issuance of up to nine new financial licenses, increasing foreign shareholding in non-commercial banks and allowing locally-incorporated foreign commercial banks to have better access to underserved sectors of the economy.

The changes in the financial services industry followed the announcement made by Prime Minister Datuk Seri Najib Razak last week of the waiver of the 30% bumiputera equity stake in 27 subsectors of the services sector.

Bank Negara said in a statement released on Monday that “the liberalisation plan aims to pursue opportunities that will bring net benefits and contribute to the development of the Malaysian financial sector and the economy as a whole while ensuring that overall financial stability and soundness is preserved.”

The central bank added that the plan would be supplemented with sufficient safeguards to ensure that the overall financial intermediation function of the financial system remained intact, effective and sound.

Meanwhile the AP reported:

PUTRAJAYA, Malaysia: Malaysia announced Monday it will let foreigners hold a majority stake in insurance companies and investment banks, while five more foreign banks will be allowed to operate by 2011 in major steps toward financial liberalization.

Prime Minister Najib Razak told reporters he is raising the foreign ownership cap in insurance companies and investment banks _ known as noncommercial banks - from 49 percent at present to 70 percent.

"These liberalization measures are in line with the government's initiatives to promote structural change within the economy and diversify sources of growth to further drive economic expansion," said Najib, who is also the finance minister.

"In enhancing our international linkages and taking the financial sector to a new level of performance it will contribute to our overall economy," he said.

Najib said the government will issue licenses to five new foreign commercial banks, which are the traditional lenders serving the public, by 2011.

Currently, there are 13 locally incorporated commercial banks, including Citibank, Standard Chartered and HSBC. Although they are fully owned by foreign entities, they are restricted in their operations and can only run a certain number of branches.

Still, the foreign banks control 25 percent of the domestic banking market.

The foreign banks are also not allowed to own more than 30 percent of domestic commercial banks.

Najib said this rule will remain unchanged to allow the local financial services sector to flourish.

He said the government will issue six new licenses to foreign financial bodies in 2009 and three in 2011.

Of the six licenses, two will be given to foreign Islamic banks with a paid up capital of at least $1 billion, two to foreign commercial banks with specialized expertise and two to Islamic family insurance companies.

In 2011, up to three licenses will be issued to world class foreign commercial banks, he said.

"Our liberalization is a sequence-managed and gradual process," said central bank governor Zeti Akhtar Aziz said.

The financial services sector contributed 11 percent to Malaysia's gross domestic product last year, and employs more than 140,000 workers.

Monday's announcement came less than a week after Najib scrapped a 30 percent requirement for ethnic Malay ownership of investments in some service sectors in a bid to boost the country's flagging economy.

Malaysia's exports have been hit by the meltdown in global demand and the government says the economy will shrink 1 percent this year in its worst case scenario. - AP

Q1 Recruitment Result

Message from Kevin Wright, Deputy Chief Executive, Insurance, PCA

Dear Wealth Managers/Planners and Quality Leaders/Agents,

The development and success of our agency force is central to the growth
of our company which is why recruitment has always been a top priority for
us. With that in mind, year 2009 has been designated as the year of

I am pleased to share with you our recruitment result for Q1 of this year
has been most encouraging. Unlike most other industries which have been on
the decline, the number of applications we received in Q1 has increased by
almost 50% in comparison with the same period last year. On top of that,
the number of new recruits joining us in Q1 has also grew by 600,
representing a 21% increase from last's year number. This shows that more
and more people are considering insurance as a viable career option and
with the continuous growth and impressive result delivered by our Company
backed by our solid financial strength, people are convinced about the
ability of Prudential in securing their future.

Hence, there's no better time for recruitment than now. Take the
opportunity to talk to people and help them explore the beauty of the
business and what they can expect by joining Prudential. Remember our
recruitment target for Q2 is 1500 and our APE is RM200 million. When our
company is infused with more fresh new bloods, our target inevitably
becomes a lot easier to attain.

Here's wishing you a great start to the week!

Best Wishes

Kevin Wright
Deputy Chief Executive-Insurance
Prudential Corporation Asia

Recruitment Opportunity

Excerpt from The Star 17th April, 2009
Minister: 31,161 workers out of jobs so far

KUALA LUMPUR: A total of 31,161 workers have been retrenched or laid off through voluntary separation schemes (VSS) between Oct 1 and April 15 this year, says the Human Resource Ministry.

Minister Datuk Dr S. Subramaniam said 16,288 local and 7,164 foreign workers had been retrenched during the period while 6,921 local and 788 foreign workers had been laid off through VSS.

“The retrenchment was anticipated across all occupational categories including managerial, professional, technician, clerical, machine operators and plant assemblers during the economic crisis,” he said.

Subramaniam said this in his speech delivered by his deputy Senator Datuk Maznah Mazlan at the MIM CEO Forum 2009 and MIM-Public Bank Manager of the Year 2008 award presentation ceremony.

Meanwhile, 300,000 foreign workers’ contracts had ended in the last six months and their permits were not renewed by the ministry, he added.

Subramaniam said the ministry had initiated three training programmes for employers and workers – Train and Place; Train and Replace; as well as Train and Retain.

“The Labour Department is actively validating job vacancies and facilitating job matching and placement for retrenched workers,” he said.

He said the ministry had also set up 80 operation rooms nationwide to monitor the retrenchment trend daily and to assist retrenched workers by conducting a job placement drive.

“The ministry, under the stimulus economic package, has been allocated RM650mil to implement various programmes to help stimulate the economy, improve Government delivery system and prepare Malaysian workforce with the necessary skills,” he said.

CEOs Resigning

Reports says that life insurance business is in a decline growth. But that is untrue based on our (Prudential) performance last year which recorded a 9% increase in New Business Premium. Regarding the RBC, we are in strong position as it was implemented few years back in our company.
While others are still walking, let us RUN.... Lets together achieve our dream!
Excerpt from The Star, 3rd April 2009.
Friday April 3, 2009

Insurance CEOs resigning

Departure of 3 captains in less than 10 days could be a start to an exodus

PETALING JAYA: In less than 10 days, three insurance CEOs have resigned and more resignations and movements in the insurance industry are expected in the coming months.

According to sources, the three who resigned are Cliff Lee of Tahan Insurance Malaysia Bhd (who also resigned as chairman of the General Insurance Association of Malaysia or Piam), AXA Affin Life Assurance’s Vincent Kwo and Uni.Asia General Insurance Bhd’s Mohd Fauzi Yaakub.

Piam, in response to a StarBiz query, said Oriental Capital Insurance Bhd CEO Mohd Yusof Idris was appointed chairman of the association on Wednesday to succeed Lee whose resignation was effective the same day. Yusof was previously deputy chairman.

At this stage, their reasons for leaving the companies were still unclear and no successors had been identified, a source said.

The insurance industry has not been spared the impact of the global financial crisis. While the general insurance industry grew in 2008, in terms of gross written premiums, it is expected to be impacted this year.

Gross premiums for the industry (general) grew 8.37% to RM11.32bil in 2008 compared with RM10.45bil in 2007. New business premiums for life insurance experienced a negative growth of 6.2% last year to RM7.13bil from RM7.6bil in 2007.

According to sources, the insurance industry is also heading for consolidation in line with the risk-based capital framework, which came into effect in January.

A source said the spate of departures among CEOs could be due to them going for stronger capitalised companies and better remuneration.

Lee, who has more than 25 years’ experience in the insurance industry, was appointed Tahan Insurance CEO in January 2007. He was previously CEO and managing director of Ace Synergy Insurance Bhd.

At present, managing director Preim Singh is overseeing Tahan’s daily operations. Piam declined comment on Lee’s resignation as its chairman.

Idaman Unggul, the parent of Tahan, is in the midst of selling its entire stake in Tahan’s general insurance business, after hiving off its life business to AXA Affin Life a few years ago.

Kwo’s resignation came as a surprise to many as his close colleagues were unaware of his departure, sources added. He was appointed AXA Affin Life CEO when the company came into existence.

Kwo’s more than 20 years’ experience in the insurance industry include stints in various South-East Asian countries, in positions such as chief financial officer and CEO in a number of multinational insurers. Fauzi, who resigned last week, was appointed Uni.Asia General Insurance CEO last December. Prior to that, he was chief operating officer.

CIMB Wealth Sells AIA Products

Excerpt from The Star 31st March 2009
Tuesday March 31, 2009

CIMB Wealth forms alliance with AIA

Tie-up will enable a holistic approach to financial planning

KUALA LUMPUR: CIMB Wealth Advisors Bhd yesterday formalised a 10-year strategic alliance with American International Assurance Bhd (AIA) to offer a wide range of differentiated and innovative insurance protection solutions.

CIMB Wealth Advisors chief executive officer Tan Beng Wah said the company’s 5,500 agents and financial planners would market insurance products underwritten by AIA and its subsidiary AIA Takaful International Bhd.

“It (strategic alliance) will enable both parties to leverage on their proven strengths and expertise in the areas of wealth planning and insurance protection solutions respectively to offer Malaysians a holistic approach to financial planning,” he told reporters after the agreement signing ceremony yesterday.

Tan said the company’s agents and wealth planners would now be able to offer customised financial solutions to clients by bundling some of the insurance products with other offerings such as unit trust funds, credit cards, structured products, wills and trusts services provided by the CIMB group.

He also said there was potential to cross-sell their products to benefit both organisations.

“It took us about a year to seal this partnership and last month we came out with a product offering that combines education with insurance,” he said.

He said CIMB would initially introduce about seven AIA insurance products.

AIA chief executive officer Khor Hock Seng said: “Through this alliance AIA will be able to tap into CIMB Wealth Advisors’ agency distribution strength and 35 regional offices to provide a full range of diversified insurance products.”

Khor said AIA would also focus on designing new and innovatice products to meet the changing needs of its customers.

Products currently underwritten and developed by AIA include traditional life, investment-linked medical, education and endowment.

CIMB Wealth Advisors is a subsidiary of CIMB-Principal Asset Management Bhd, which is jointly owned by CIMB Group and the Principal Financial Group in the United States.

AIA, with 60 years of local market presence, is one of the country’s largest life insurers with 23 branches nationwide and over 1,000 employees and 10,000 agents.

Penyakit TB Kembali

Excerpt from The Star, 27th March 2009
Published: Friday March 27, 2009 MYT 2:16:00 PM

Tuberculosis re-emerging but private doctors unaware

KUALA LUMPUR: The once controlled tuberculosis disease is spreading again in Malaysia because private doctors have failed to realise the disease has re-emerged.

Respiratory Medical Institute (IPR) director Datin Dr Aziah Ahmad Mahayiddin said a standard practice required doctors to send patients suffering from acute cough for two weeks for tuberculosis tests.

“However, the procedure is often not fully adhered to as most private clinics do not have a laboratory,’’ she said, adding that the disease was contagious and needed to be treated immediately.

Dr Aziah said that in the 90s, tuberculosis had been controlled and had dropped to a minimal and certain private practitioners had forgotten about it.

“Some doctors are not aware that it is re-emerging in the country,’’ she said.

Tuberculosis is a highly infectious, often deadly, disease that mostly attacks the lungs and whose classic symptoms include chronic cough, blood-tinged sputum, fever, night sweats and weight loss.

Statistics show reported tuberculosis cases in Malaysia has risen from 61.2 cases per 100,000 people in 2005 to 63.1 cases last year.

She added that a total of 17,506 new cases with 1,523 deaths were reported last year.

Dr Aziah added it was vital to raise the awareness, not only among those in the medical fields but everyone.

She told reporters at the World Tuberculosis Day celebrations, themed “I am Stopping TB”, at IPR here on Friday.

Federal Territory Health Department deputy director Dr Salehuddin Abu Bakar said the department had issued letters, reminding doctors to be aware of the spread of contagious diseases such as dengue and tuberculosis.

He said a person with a weak immune system faced a higher risk of infection.

The Malaysian Association for the Prevention of Tuberculosis president Datuk Seri Yeop Jr Yeop Adlan said tuberculosis patients from rural areas could apply for a monthly allowance from them while receiving treatment.

He said successful candidate would be give a maximum allowance of RM400, up to six months - a standard period for the treatment. Visit www.mapth.org.my for details.

IPR, located in Jalan Pahang, provides free treatment for tuberculosis patients for just a RM5 registration fee.

PRUDENTIAL = Mercedes-Benz

Excerpt from The Star 27th Mar 09
Friday March 27, 2009

Mercedes-Benz bullish on local car market despite economic woes

KUALA LUMPUR: Mercedes-Benz Malaysia Sdn Bhd is optimistic on the local car market, targeting to sell between 3,600 and 3,800 cars this year despite the global economic turmoil.

The company saw the signs of slowdown last year and hence was well prepared for the crisis, said sales and marketing (passenger cars) vice-president Florian Muller.

Last year, it sold 4,200 cars, Muller told Bernama yesterday at the preview of a RM100mil dress to be unveiled at the Mercedes-Benz STYLO Fashion Awards Gala here early next month.

“We will not see the figures achieved last year but so far, we have passed the first quarter without any negative sign. We are positive towards the coming second quarter.

“No doubt the current economic climate will make people think twice before making an investment as they prefer to have cash in hand,” he said.

The company had taken measures to ensure it did not overstock cars while maintaining the value and quality of the luxury brand, he added.

As a run-up to the 11th Malaysian F1, STYLO will be unveiling a RM100mil STYLO dress at the Mercedes-Benz STYLO Fashion Awards on April 3, the eve of the F1 Sepang qualifying round.

The dress, named “Nightingale of KL”, is a special commission to Jendela KL, a leading local fashion brand, and celebrity shoemaker Datuk Jimmy Choo.

The dress and its matching couture shoes will be put together with blinding rocks from world-renowned jeweller, Mouawad.

The long trail of the dress and shoes are expected to carry 750 diamonds weighing over 1,000 carats held together by its most important piece, a pear-shaped 70-carat diamond owned by the House of Mouawad.

Mouawad Malaysia managing director Antoine Bakhache said 5% from the sale of the dress would be donated to the Humanitarian Fund for Gaza, jointly initiated by STYLO and Raja Datuk Seri Azureen Sultan Azlan Shah of Perak. — Bernama

Interest Rates

Excerpt from The Star, 26th March 2009
Lower interest rates are expected to provide support for domestic demand

As one of the most open economies in the region, Malaysia is already affected by the worsening external environment.

With the risk of inflation abating considerably, the balance of risk has shifted from inflation to growth. Headline inflation decelerated to 3.9% in January 2009 from the peak of 8.5% in July 2008.

There are strong indications that this downtrend is likely to continue this year while wage demands will be muted.

As pre-emptive measures, the Monetary Policy Committee reduced the overnight policy rate (OPR) by 25 basis points in November 2008, followed by further reductions of 75 and 50 basis points in January and February 2009 respectively to provide a more supportive monetary environment for the local economy.

Lower interest rates are expected to provide support for domestic demand through the availability of credit at cheaper costs and by increasing disposable income through lower debt servicing costs.

Reduced interest rates also increase the affordability of loans and the cost of capital.

The cuts in the OPR were accompanied by reductions in the Statutory Reserve Requirement and the floor on deposit rates. The reduction in deposit rates does not detract from the long-standing emphasis on ensuring a positive real rate of return to savers.

With inflation trending down, the real rate of return on 12-month deposits is expected to average above 0.5% this year.

Bank Negara announced the issuance of the Merdeka Savings Bond amounting to RM2bil as an additional savings instrument for Malaysian citizens aged 56 and above.

The Government has also announced the issuance of syariah-compliant Savings Bonds amounting to RM5bil for citizens above 21 years old. With a nominal return of 5% per annum, the real return on these bonds are expected to average above 3% in 2009.

Going forward, Bank Negara will continuously assess the appropriateness of the OPR and its monetary policy stance. As monetary policy works with a lag, the central bank has frontloaded the cumulative 150-basis point OPR reduction in view of the significant moderation in the prospects for growth and inflation.

In the next few months, Bank Negara will continuously assess whether all these measures are having their intended effects in sustaining domestic credit expansion and economic activity.

Globally, while central banks are easing monetary policy, governments are undertaking fiscal stimulus on a scale that is creating large fiscal deficits unseen in recent years and such complementarity of policies is necessary.

Monetary policy, as a demand management tool, has limits on the magnitude of reflation it can achieve in the current environment.

In addition to the RM7bil stimulus package, the Government has announced an additional stimulus package worth RM60bil to mitigate the adverse developments in the external sector.

The collective impact of monetary and fiscal policies should limit the effect of the global economic downturn on domestic economic activity and provide a firm base for the economy to return to its medium-term growth path once global economic and financial conditions normalise.

Jom Beli - On SALE!!!

Excerpt from The Star 14th March 2009

Saturday March 14, 2009

Medical insurance still affordable in Malaysia


JOSEPH Lee heaved a sigh of relief in between grimaces. His insurance company will cover all the medical expenses he will rack up due to a spinal slipped disc. For the past two weeks, he has been in a private hospital, suffering excruciating pain after various treatments have failed. Now he is scheduled for surgery.

His hospital bill has grown to a few thousand ringgit and there will be even larger charges for his upcoming surgery and post-operative care.

Lee is one of the more fortunate Malaysians who have medical insurance to lean on amid escalating medical and healthcare costs.

These costs have risen by an estimated 30% to 40% over the last three years, mainly due to the increase in the utilisation of medical services and advancements in medical technology.

Prudential Assurance Malaysia Bhd chief marketing officer Thomas Wong sees it as an uphill task to mitigate, let alone bring down, high medical costs, as this will need the collective effort of insurers, healthcare providers and the Government.

“Higher medical claims will definitely affect premiums in the long run because premiums are meant to be able to cover claims, and claims paid are meant to cover inflating medical costs.

“But any premium increase usually comes with an increase in benefits in the medical plan,” he says, adding that Prudential Assurance’s medical claim incidences have increased by around 20% annually for the past three years.

Most insurers, however, feel that medical insurance is still fairly affordable in Malaysia. ING Insurance Bhd president and chief executive officer Datuk Dr Nirmala Menon says this is because a medical insurance package will always offer the option of accessing care at public as well as private hospitals.

“Public hospitals are subsidised by the Government and therefore, medical costs are much lower at these hospitals, which also provide good medical treatment,” she adds.

For example, cash plans (which pays a fixed cash benefit for each day the customer is hospitalised) are typically cheap, ranging from RM40 per annum for RM100 daily cash benefit to RM200 per annum for RM400 daily cash benefit, depending on the age of the customer at the time of purchase.

Reimbursement plans, however, are relatively more expensive and depend on the age of the customer, which room the customer prefers to stay in during hospitalisation and the amount of claims he can make in a year should hospitalisation occur (annual limit).

A reimbursement plan covers the hospitalisation charges, consultation before hospitalisation and post-treatment after hospitalisation and may also include outpatient treatment such as day surgery, cancer treatment and kidney dialysis.

For example, premiums for Prudential’s PRUmajor med 5 can range from about RM505 per year for the cheapest room plan with an annual limit of RM50,000, to about RM5,000 per year for the most expensive room plan with a RM150,000 annual limit.

Great Eastern Life Assurance (M) Bhd’s Great MediCare offers medical coverage at an affordable premium ranging from RM500 to RM800 a year, depending on the age and plan selected.

Executive vice-president and chief marketing officer Loke Kah Meng says depending on the policyholder’s selected plan, medical expenses can be reimbursed in one lump sum up to an annual limit of RM200,000 and a lifetime limit of up to RM1.6mil.

According to General Insurance Association of Malaysia, medical expenses insurance generated close to RM485mil in gross premiums, which represented only about 5% of the general insurance market in 2007.

Executive director Lim Chia Fook says growth in the medical insurance sector has been very encouraging, averaging at least 15% over the last few years with expectations of continued strong growth going forward.

“This is indicative of the greater awareness among individuals, employers and corporations of medical insurance protection as an effective and affordable means of financing these costs,” he says.

Nevertheless, Lim says general insurers in Malaysia expect a difficult 2009 as the global economic slowdown takes its toll on premium growth in this sector, in particular.

“This view is balanced somewhat by the fact that many are now even more aware of the greater need for medical insurance in difficult financial times,” he adds.

Wong is still optimistic about the outlook for the medical insurance sector as only about 40% of the Malaysian population is insured as at 2007.

“The market certainly has plenty of room for growth. There are opportunities for insurance players to continue to introduce new products that not only meet consumers’ protection and savings needs, but are affordable as well,” he says.

To Wong of Prudential, comprehensive healthcare protection should ideally have a hospitalisation and surgical insurance plan, a critical illness plan and a disability income plan designed to cover one’s day-to-day expenses in the event one is unable to work due to an accident or illness.

“More importantly, review your medical insurance plans at least on an annual basis. With healthcare increases continuing to outpace the general inflation rate, chances are the plans that you have bought years ago are unlikely to be enough to meet future needs,” he stresses.

Insurance Growth

Excerpt from The Star 11 March 2009

Non-motor segment helps industry record growth


KUCHING: The strong performance of the non-motor sector has helped the country’s general insurance industry to record a 3.2% growth in gross direct premium to RM10.5bil last year.

The medical and health, and liabilities classes grew by 16.7% and 10.5% last year as compared with 2007, said Bank Negara insurance and takaful supervision department director Yap Lai Kuen. She said the personal accident class posted a 9.2% growth during the same period.

“Even though 2008 has been challenging, the insurance industry has maintained an overall high volume of business,” she said when opening the inaugural Sarawak insurance agency seminar yesterday.

However, Yap said the life insurance’s new business annual premium equivalent registered RM7.2bil last year, down from RM7.6bil in 2007. She said this was due largely to a decline in sales of investment-linked business.

“It is worthwhile to note that ordinary life recorded a strong growth of 18.6%, thus demonstrating the industry’s ability to adapt to a changing business environment,” she added.

Yap said Bank Negara had recently issued a concept paper - “Guidelines on the introduction of new products for insurance companies and takaful operators” - in which fair treatment of consumers was highlighted.

She said the paper stressed the need for insurance companies to put in place policies and procedures to ensure that customers were fully informed through appropriate disclosures of the key features, terms and conditions and risks associated with the product. The product must also be appropriate for the target group of consumers taking into consideration their broad needs and risk appetite, and compensation arrangements for sales staff and agents must not induce an excessive bias towards high revenue-generating products that they are likely to result in unsuitable product advise or sales to customers.

Yap said insurance companies must be seen to be actively involved in combating fraudulant practices and money laundering to boost their integrity and trustworthiness.

She said insurance agents had to keep up-to-date in terms of technical competency, maintain a high standard of ethical behaviour and provide customer-orientated services.

Financial Health Check

Excerpt from The Star, March 7th, 2009
Achieving financial freedom


A SINGLE mother of two school-going children from Johor Baru recently called up Whitman Independent Advisors Sdn Bhd for advise on how best to manage her personal finances in the light of the deteriorating economic environment.

She was told by one of the company’s staff that Whitman only caters to those who have RM2mil minimum worth of assets.

After much persuasion, she managed to speak to its managing director and told him her financial dilemma and thanked him for listening although he turned her down.

The managing director felt guilty and selfish for not imparting his knowledge on financial and wealth management which he has built up over the years, especially so in the current economic downturn.

Realising that there are lots of people out there facing a similar or worse predicament, he designed a guide for one to achieve his or her financial freedom, which he named the Roadmap to Financial Freedom. He then called the woman and offered her the service free of charge.
Yap Ming Hui, the managing director of Whitman narrates this experience over a cup of tea with the writer recently.

He charges a minimum fee of RM680 and this time, the customer does not need a minimum asset worth to qualify for the Roadmap to Financial Freedom service.
According to him, many people dream of financial freedom but very few have a roadmap to guide their aspirations.

Yap says his roadmap provides a comprehensive and holistic guide to achieve financial freedom.
Compared to the common financial check-up tests available in the market, he says this service is unique in that it allows a person to have a complete and detailed view of his or her financial status.

“Most people plan their personal money based on a specific financial goal like retirement goals, children tertiary education funding goal and others. When you only look at one specific goal at a time, you are only looking at a segment of your total financial picture.

“You will not be able to see how it will affect other financial goals. For example, when you only look at children’s tertiary education funding at a time, you will not know how it will affect your retirement planning.

“You can only tell how much you need to save or provide your children’s tertiary education but you will not know how your provision will affect your retirement funding,’’ Yap elaborates.

In reality, he says the more financial resources a person provides for his child’s tertiary education, the less financial resources he will have available for retirement.

Using a segmental approach does not reveal the real picture. By knowing how different financial goals affect each other, he says one is able to adjust each goal to reach the most optimum or comfortable point.

In a nut shell, what can the service do for you?
·Helps you to define how much wealth is enough for you.
·Tells you whether you will have enough financial resources to meet all your financial needs and wants.
·Makes you understand the relationship between different financial needs and wants.
·Allows you to find out the right code (combination) of the five essential elements of financial freedom like spending, inflation, return on investment, time and savings.
·Find out the adjustment you can make to reach an optimum point of financial management.
Once an optimum point is identified, one can have a few key performance indicators to keep them on track to financial freedom, such as how much exactly needs to be saved, how much can be spent, the right investments and so forth.

A clear plan such as this can even reveal at what age one’s wealth will last if a person continues to manage his money based on the current practice. That’s a good point to start to adjust and re-prioritise one’s financial goals.

A roadmap also allows one to become the master of his or her money and frees a person’s from money-related worries so better enjoy the really important things in life.

No one plans to fail but many fail to plan, Yap says.


Excerpt from The Star 4th March 2009

Wednesday March 4, 2009

Single mum needs your help

IPOH: A single mother is at her wits’ end trying to figure how to raise funds to treat her young son who was hit by a car in Sitiawan on Feb 21.

Ling Pik Syu, 29, said she lost her job as a kitchen helper in Singapore last month after returning to her hometown for a short break to care for her son, who was involved in an accident in Pekan Gurney in Sitiawan.

Mum’s love: Ling at the bedside of Yang Jeng at the Fatimah Hospital in Ipoh yesterday. With her (from left) are Perak MCA Public Complaints and Services Bureau deputy chief Kok Pak Foo, Alex Chan and Perak MCA Youth Public Complaints and Services Bureau chief Tony Khoo.

“I have to stay back to look after him. My former employer found a replacement and I don’t have any source of income now,” she said at the Fatimah Hospital where her son, Sioh Yang Jeng, 11, is recuperating from an operation to remove a blood clot from his brain.

Ling became the family’s sole breadwinner after her husband died in 2003. The mother of three said her son has been in hospital since the operation on Feb 22 and the bill had accumulated to RM80,000.

“I have borrowed RM50,000 from friends for the medical fees,” she said, adding that her son also suffered a broken leg in the accident.

She said the boy would need another operation next month to replace a piece of his skull that was removed.

Perak MCA Public Services and Complaints Bureau chief Alex Chan, who visited Ling and her son at the hospital yesterday, said they needed to raise about RM100,000 to help pay off the mounting hospital expenses.

Donors can contact the bureau at 05-253-6981. Donations can also be made to the “Perak MCA Public Services and Complaints Bureau” with Sioh’s name written on the back of the cheque and sent to the MCA headquarters at 90-92 Tingkat Satu, Jalan Sultan Idris Shah, 30000 Ipoh.

Investing Tips

Excerpt from The Star 26th Feb 2009

Thursday February 26, 2009

How long should investors hold their stock investments?

OFTEN we hear some financial experts say we need to hold stocks long term, especially during the weak stock market situation like what we are experiencing currently.

Some gurus say the “buy and hold” strategy is the best investment strategy. However, some retail investors may argue that “buy and hold” is not suitable in Malaysia because if they pick the wrong stocks, some companies might even get delisted after a while.

The question of how long to hold has always been on the mind of investors when they purchase any stocks. Given the present weak economic and stock market conditions, some investors may lose patience as they do not know when the market will recover again.

In this article, we will look at the number of years that we need to hold our stock investments in Malaysia. We use the KL Composite Index average daily indices to compute the stock returns.

The following data was provided by Dynaquest Sdn Bhd. With its permission, we will provide the historical rolling annual compounded returns from 1970 to 2008.

The table shows the rolling historical annual compounded returns for holding the stocks for one, three, five, seven and 10 years.

It shows the average annual compounded returns and risks (measured by standard deviation) regardless of any starting or ending dates.

For example, the 25% returns in the second row and the second column of the table was the annual compounded returns of investing for one year from 1970 to 1971. The three-year returns of 56.7% was what you would’ve got if you started your investment in 1970 and ended in 1973.

If you started investing in 1970 and held it for five years (up to 1975), seven years (up to 1977) and 10 years (up to 1980), your annual compounded returns will be 16%, 14% and 21.8% respectively.

In terms of the overall average returns, except for one-year and three-year holding periods of 13.4% and 9.8% respectively, we notice that the annual compounded returns for five-year, seven-year and 10-year holding periods were almost the same, about 8% per annum.

However, the longer we hold our investment, the lower the risks that we face, which are measured by using standard deviations.

For example, if we hold our investment for one year, the standard deviation is 30.8%.

However, if we hold it a bit longer to three, five and seven years, the standard deviation will drop to 16.8%, 11.4% and 8.6% respectively.

For 10-year holding, the standard deviation is 6.6%. Based on two standard deviations, we are 95% confident that our returns will range from -5.1% (8.1% - 2 x 6.6%) to 21.3% (8.1% + 2 x 6.6%).

This is supported by the minimum returns of -2% and the maximum return of 23.6% for 10-year holding periods.

In conclusion, we need to hold stocks long term. We may not need to hold them up to 10 years.

However, we need to understand that we will face very high volatility on returns if we invest only for one year.

Besides, we need to make sure that we are buying good fundamental stocks in order to avoid poor quality stocks that are not suitable for long-term investment.

  • Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting. We welcome readers’ feedback. Please e-mail to starbiz@thestar.com.my

No 1 di hati

Excerpt from Business Times, Feb 23, 2009

Prudential's No. 1 in Malaysia life insurance mart

Business Times
Feb 23, 2009

PRUDENTIAL Assurance Malaysia Bhd saw its life insurance new business sales increase nine per cent for financial year 2008.

It posted some RM659 million in new business annual premium equivalent, which consists of regular premium sales plus one-tenth of single premium insurance sales.

New business sales for financial year 2007 were RM606 million.

The growth is for life insurance and takaful contributions generated for the same period.

Prudential said in a statement it has attained the top position in the Malaysia life insurance market.

"Despite challenging market conditions, Prudential has remained resilient by growing its market share to achieve No. 1 position," said Prudential Assurance chairman Tony Wilkey, also Prudential Corp Asia's chief executive.

The growth was attributed to Prudential Assurance's transformation efforts which included accelerating development of wealth planners and agency distribution and innovative product launches.

"We will continue our agenda into 2009 to expand our wealth planner team, enhance agency productivity, introduce appealing products, and to further enhance our customer service delivery," he said.

Education Plan

Excerpt from The Star 21st Feb 2009

Saving for your child’s future


Parents should consider various factors when choosing an education policy for children.

THE rising cost of education has made it compelling, if not daunting, for parents to start saving early to ensure their children’s education needs are well taken care of.

Indeed, there are many options in the market that assist parents with young children to keep an eye on their future needs in terms of education.

A recent projection on the cost of tertiary education and its tuition fees and living costs both locally and abroad is an eye opener.

A three-year study in a public university in Britain costs some RM280,000 while studying in a local private university (for foreign university degree courses) for the same period costs over RM70,000 including living expenses.

A good starting point for any savings plan is for parents to estimate how much they need to fork out for their child’s college or university fees 10, 15 or 20 years from now. That way, parents can determine how much needs to be set aside, says Prudential Assurance Malaysia Bhd chief marketing officer Thomas Wong.

“They need to ask themselves certain things – where do they intend to send their children? Local or overseas university? What field of study? For how long? These are important factors that will ultimately influence the expected cost of education,” he says.

However, more often than not, consumers tend not to carry out detailed objective setting right from the start. As a result, they stand the risk of saving less than what may be required, which somewhat defeats the purpose and still results in them scampering for loans at the last moment.

There are websites that host an education calculator tool to help provide an estimate of the future cost of tuition and the amount of savings needed to generate sufficient funds for the child’s tertiary education.

For example, the education calculator in Prudential’s website shows that a three-year study in Australia some 15 years down the road (not including living expenses), would cost about RM320,000, factoring in an education inflation rate of 4.9%.

On the other hand, a three-year study programme at a private college in Malaysia in 15 years’ time could cost only RM70,000, factoring in an education inflation rate of 3%.

Once the expected education costs have been determined, parents should then decide on an amount which they can afford to set aside on a regular basis. “As saving for child’s education fund is a long term commitment, it is therefore crucial for them to be realistic about the amount they could afford to set aside in the long run,” Wong says.

There are several savings tools available for parents to save for their children’s tertiary education. One option is to purchase a child education policy, which is a life insurance plan designed to provide your child with an amount of money when he or she is ready to go to a university or college.

Combining savings and protection elements in one plan, such policy not only helps you grow your child’s education fund, but also provides your child with the necessary insurance coverage – a unique feature not offered by an ordinary savings plan or other investment tools.

“What makes an education plan even more attractive is the ‘continuity’ it offers. Ordinary savings plan stops if something unfortunate happens to the parent who is paying for it. But with the education policy, the premiums can continue to be paid through the payor’s benefit if something unfortunate happens to the parent such as death, total permanent disability or diagnosis of a critical illness,” he says.

The payor’s benefit would ensure the child’s education fund is secured and continues to grow consistently and when the policy matures, the child would then have the financial means to further his or her studies.

One such example is Angela De Cruz, 44 who took a investment-linked policy with a medical card that includes hospitalisation benefits for her eight-year old daughter.

“It is important to ensure medical coverage as a substantial amount of our savings would be used in the event a child falls ill. Besides that, if anything unfortunate were to happen to me, my child would continue to be provided as well,” she says.

A flexible education plan is also one worth considering as it allows parents to maximise their funds and support the choices that suit one’s budget and needs as they change with the circumstances.

For parent’s looking for investment plans, CIMB Bank offers capital protected investment deposit that is long term, yet flexible for top-ups – a good fit for parents who want to invest and save for their children’s education.

CIMB Bank Bhd head of retail banking Peter England says this product encourages a savings-discipline in account holders, where they consistently set aside extra cash into the account, which offers potentially better returns than regular savings accounts and/or fixed deposits.

“From as little as RM50, customers can invest in a capital-protected instrument for tenures of 15, 20, 25 or 30 years that pays out a profit based on the highest value achieved during its tenure. Customers would also have full flexibility to withdraw and invest at any time at prevailing market values,” he says.

England added that besides education loans of up to RM500,000, parents could opt to exercise overdraft (OD) facility on a pledged-fixed deposit (FD) by CIMB.

“With this, parents do not need to uplift the interest bearing FD while enjoying attractive OD rates,” England says.

Besides banking and insurance products, parents could also choose to save in the National Education Savings Scheme (SSPN) account offered by the National Higher Education Corporation (PTPTN).

The SSPN account provides a number of benefits to depositors including eligibility to apply for PTPTN loans with minimum savings of RM20 in their SSPN accounts, tax relief on savings of up to RM3,000 a year, free insurance coverage of up to RM50,000 for depositors who have a minimum deposit of RM1,000, dividends and tax exemption on dividends.