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.