Malaysia Insurance Industry Updates

Should I just let the photos do it's own talking...?

Which company is more financially stable?

Which company is largest by size and revenue in 2010?

Which company growth the most in 2010, and continue growing?

Which is the first company to hit RM 1 BILLION sales in Year 2010 in Malaysia?

Terima kasih seBillion... Thanks a Billion.... 

Top 6 Insurance Companies in Malaysia as at Year 2010

Total Payout by Prudential in Year 2010 is RM753million...

Do you know the meaning of the term TPD in Insurance?

TPD is the short form for TOTALLY & PERMANENTLY DISABLED.


Still very technical and don't understand?


Well, that's why I'm here bringing out this BORING topic... (",)
Hope nobody falls asleep reading this post..


My aim is to make it clear, once and for all, in layman terms, so that ah pek, ah ma, uncle, auntie, brother, sister, and little boy, little girl also can understand..


A lot of time, we hear people saying:- INSURANCE CHEAT PEOPLE...


How true is that? We don't know and never bother to find out the facts and the true story behind. We just pity the "victims", and assumed that, YES, Insurance must be cheating someone, that's why someone is complaining and raising the issue with the media... And so, we stay away from it, as far as possible.. After all, it's better to be safe than sorry...


BUT, many a times, it is not that Insurance Companies cheat PEOPLE.. Insurance Companies operate under strict rules and regulations under supervision by BNM, and self regulated under LIAM and PIAM... And they all have to bide by the rules so that they do not lose their licences to operate. Everything is all in black and white, even IF the Insurance Companies were trying to cheat, they will be having a hard time finding ways... (I would say that it is almost impossible for them to cheat, at all.) 


Furthermore, how much is your premium? Will the companies be so STUPID in cheating our "less than RM100,000" premiums and risking their BRAND and GOODWILLS worth much more than that? No way, man....


Whereas, I have actually seen it with my bare eyes that people cheat Insurance Companies with the help of Insurance Agents, and Doctors... Well, I'm not going to share how they did it, because if their ways are perfect, they wouldn't have been caught already... 


Now, let me get back to the main topic today - TPD...


How is the word TPD defined in Insurance Policies? 
How can a person qualify under TPD?


I'm sure many are starting to scratch their head now... 
Let me ask you few simple questions..


1. Is losing one or two of your palm considered TPD?
2. Is losing an arm or a leg considered TPD?
3. Is losing eye sight of an eye qualify for 50% of TPD?


If you answer YES to above 3 questions, then you are like most of the people on the street...


Would you mind if I ask you to bring out your Insurance Policies from your drawer now?
Go, check it out, and read aloud what it wrote.
Look at the fine prints as well...


Having problems finding where is it located in your policies documents? 
You may email me at marvynchoong@hotmail.com. 
If you are from within Malaysia, you may try to make an appointment to meet me in Penang, I'll help you out personally.


Now, let me show you the actual BLACK and WHITE definition from Prudential policy document.

So, what do you understand from the above definition circled in RED?


Now, what does it mean lose by severance one limb each at or above his wrist and ankle, or two limbs at or above his wrist or ankle?


It means that the limb must be lose by severance. 


But, what is lose by severance? 
Mandarin translation is 失去遣散.


But, you understand the meaning?


In layman terms, that literally means the limb must be detached from your body.
If the limb is still attached to the body, but loss its functions, then it don't fall under clauses (iii) and (iv).


Now, go back to point (iii) and (iv) again, do you noticed that the lose of limb by severance must be above wrist or ankle?


That means that, if someone loss his palm, or feet, he is not qualify under clauses (iii) and (iv).


So, looking at clauses (ii), (iii) and (iv), it tells us that to qualify for TPD, the someone must either loses sight in both eyes, or loses sight on an eye plus loses by severance a limb above wrist or ankle, or loses by severance two limbs above wrist or ankle.

Understand now?

Let me illustrate with drawings although my drawing is not nice... (",)


Now, the writing means that TPD = loss of 2/6 Body parts by Severance.
Let say both eyes are labelled as [1], [2], and both limbs above wrist are labelled as [3], [4], and lastly, both limbs above ankle are labelled as [5], [6].

To qualify for TPD,
Clauses (ii) means part [1] and [2].
Clauses (iii) means part [3] and [4],
                         or part [5] and [6],
                         or part [3] and [5],
                         or part [4] and [6],
                         or part [3] and [6],
                         or part [4] and [5].
Clauses (iv) means part [1] and [3],
                         or part [1] and [4],
                         or part [1] and [5],
                         or part [1] and [6],

                         or part [2] and [3],

                         or part [2] and [4],

                         or part [2] and [5], 

                         or part [2] and [6],

Crystal Clear now?

GOOD.. I assumed you are ULTRA clear now with the drawing plus my descriptions...

Now, some of you might have noticed that I purposely leave out Clauses (i)... and start wondering why!!

Let me explain the meaning of Clauses (i) first.

Clauses (i) means that if a person do not qualify for Clauses (ii), or (iii) or (iv), there are still hope for you, because Clauses (i) is more lenient, and not so strict. As long as a person can prove that he is unable to engage in any occupation and is permanently and completely unable to perform any work for remuneration or profit, then it means the person is also considered TPD.

Happy with Clauses (i) ?

I love this Clauses (i) so much that I also look out for it in every policies that I can get my hands on...
Why? Why do I need to check on every policies?
Isn't it standardized in every policies sold out in Malaysia?

I also thought so... But to my horror and disappointment... I realised that some Insurance Companies do not include Clauses (i) in the TPD definition.

Please... do yourself a favour, can you please spend some time to look through your policies documents once more?

Is there Clauses (i)???

If there's none, there's two things you need to do.

Firstly, check with the Insurance Companies whether there's any amendments on this TPD clauses that included Clauses (i), but somehow they forgot to update you. If their reply to you is that the Clauses (i) is included, please get a black and white endorsement on the said clauses with your policy number clearly stated on it. Do not be fool into believing their sweet talk or whatever verbal explanations, because at the time of claims, everything will have to be based on the BLACK & WHITE stated in your policy documents.

Secondly, if the Clauses (i) is not included, then you might need to consider getting extra coverages from companies which offer such Clauses...

Feel free to comment and share me what you think.

Insurance Cheat People?

Refer to the link about a real-life case: http://blog.thestar.com.my/permalink.asp?id=34871&cat=1

So, what conclusion you can get from this issue?

Hey, I'm Insurance Agent, yes, but I'm not here defending anyone or defending the industry as a whole. What's our rights, we need to find out, and if we are right, do not feel fear to fight for our rights... Well, there's why lawyers are for... Lawyer's job is to fight for us..

But, let me back to discuss what an Insurance Agent's job are..

Insurance Agent, like me, are here to explain and create awareness for the Public who feels that Insurance Companies have taken advantages on them..

One of the commentor, yeesang, even posted this...

Firstly, I have never trusted a second-hand car dealer or its salesmen.

Secondly, I have never trusted any insurance company and its salesmen too."

This is so....SAD...

Yes, I use the word sad because if yeesang didn't trust insurance at all, I can most certainly be sure that he/she don't have any insurance policies, and if my assumption is right, then who is ultimately going to pay his/her medical bills?

Now, let me highlight what the complaint is all about by reposting the whole text here:-

Yes, some insurance policies are so strict that they tantamount to cheating the customers.

There are some policies where the penalty for early cancellation is so severe you get practically zero.

My wife bought three policies without understanding fully the conditions. She was lured into promises of high surrender value but in actual fact she not only does not earn any form of interest but the so-called bonus rewards end up as a smoke screen. How come?

This is because when she wants to opt out after 10 years she has to forfeit a lump sum of her premium payments.

That is how your insurance agents earn their fat commissions!  - By bobocheah, 11-Apr-2011

He mentioned that someone lured his wife into believing that the surrender value is high!!

Wait a moment, you purchase a savings endowment plan because you want to get high surrender value???

How wrong is that?

We purchase endowment plan because we want to ensure that our retirement needs are taken care of, because we want to build up a cash pile to be ready when we are old, and to supplement as our 2nd EPF funds... and also because we know that if we are diagnosis with critical illness half-way during the accumulation periods, insurance companies will help us save and ensure that our retirement needs are well taken care of...

That should be our one and only aim when we sign on the dotted line for an Endowment Savings plan..

I always tell my prospects that, make sure the premium is something you are comfortable paying, as you will not be able to get back your capital if you are unable to continue the premium payment until the premium payment term.

So, to all those out there, can you go back and check on your policy document and find out what is the total premium payment term???

Don't just rely on your Insurance Agents telling you that you just need to pay for n years.

The n might be 5 years, 6 years, 8 years, 10 years... depending on your plan features...

To my horror, in fact, I found out that many irresponsible agents told their clients that n is 6 years, but actual term is whole life...

But why 6 years? Why the agent told its client only need to pay for 6 years?

Haha... Coincidentally, agent's commissions are for 6 years only..

After 6 years, agents don't get anymore commissions and that's why they don't bother whether you still pay for your policies, or whether your policy still inforce, because to them, even if your policies lapse, it would affects their persistency rates, and they had already earned full commissions from the policies..

So, as a conclusion, beware and always go through the policy documents when you received it from your agents. Remember, you have 15 days cooling off period to read through it and decide once more..

If you are unsure of anything, you can refer to your agent again, and if he/she can't go through the policies with you, most probably he/she is not good at his/her job, and probably, it's time to consider purchasing from others and cancel the policy.

Well, hope you learn something from this post, and feel free to share with me your own experiences and I'll share with you my views and probably some suggestions...

(",) Cheers!

Larger bank profits as BLR increase outpaces OPR rise

The higher increase in the base lending rate (BLR, to which lending rates are pegged) compared with that of the benchmark overnight policy rate (OPR) has raised more than eyebrows among consumers.

“This is totally unacceptable,'' a reader wrote in an email to StarBiz. “Banks will be making higher margins at our expense.

“If you look back since Bank Negara cut the OPR to 2% and then increased it back to 3%, the BLR has increased at a faster pace. Back in 2008 when the OPR was 3.25%, the BLR was 6.5% but now the OPR is at 3% and the BLR is at 6.6%.

“Bank margins have expanded by 35 basis points (one basis point is one hundredth of 1%). With RM900bil in total loans, this expands banks' profits by RM3.2bil at the expense of consumers.

“Also, when the SRR (statutory reserve requirement interest free deposits banks must keep with Bank Negara) was reduced from 4% to 1% of deposits, the savings were not passed on. But now that the SRR has been raised back to 3%, banks expanded BLR by five bps.

Effective May 11, the BLR went up 30bps (to 6.6%) which is higher than the OPR increase of 25 bps.

This speedier repricing of loans relative to fixed deposits may be mildly positive on bank margins in the near term but have already got some consumers up in arms.

“By our estimates, the additional 5bps increase in the BLR sufficiently compensates for the recent 100 bps increase in SRR to 3%,'' said Maybank IB, adding that this was probably an ad-hoc adjustment rather than to specifically compensate for the SRR hike.

RHB Bank principal officer Renzo Viegas said each banking institution could introduce its own BLR based on its cost structure and business strategies.

Under Bank Negara's new interest rate framework issued in 2004, this was allowed to provide more efficient pricing of financial products.

But for most banks, the OPR is a key variable in deriving the BLR.

“Assuming that cost structure and business strategies remain intact, it is therefore not surprising that with every OPR hike or contraction, the BLR will adjust in tandem with the change in OPR,'' said Renzo.

There are mixed views on regulatory intervention to prevent the rise of BLR following an increase in OPR.

“It is best that market forces determine the trajectory of interest rates,'' said Malaysian Rating Corp Bhd (MARC) vice-president and head of financial institution ratings Anandakumar Jegarasasingam.

Banks are likely to experience a narrowing of net interest margins with the recent OPR hike which is concurrent with the upward movement in the SRR coupled with intense competition, said RAM Ratings head of financial institution ratings Promod Dass.

“However, banks with a large proportion of their funding base composed of low cost deposits (current and savings accounts or CASA) and a predominantly floating rate loan book will be able to better mitigate this trend,'' Promod said.

Renzo sees that for banks with a high fixed rate loan book, this may have a negative effect on margins.

For banks with high floating rate books and strong CASA to fixed deposit ratio, the OPR hike will likely improve the overall net interest margin, said Renzo.

According to Maybank IB Research, the prime beneficiaries would be Maybank and CIMB which have a lower proportion of fixed rate loans and higher CASA base.

Hwang DBS Research, in its update on Asean banks, had identified Maybank, Hong Leong and Alliance as having a higher proportion of variable rate loans and CASA.

However, higher rates may affect the repayment ability of some borrowers. “Any potential default as a result of this is likely to be manageable at this stage,'' Anandakumar said.

Analysts estimate about 55% of the total loan portfolio of banks comprises consumer loans, which include 24% to 25% in mortgages.

Besides the BLR, another indicator is the average lending rate which can vary especially in the cut-throat mortgage market.

“Five years ago, mortgage lending was BLR plus 1% or 0.6%. Since then, it is BLR minus 2.4%,'' said an analyst. “We have to look at the effective lending rate.''

“Pricing strategies deployed by banks would generally result in narrower margins,'' said Anandakumar.

However, that could result in expanded market share.

To compensate for the lower margins, banks have other strategies such as packaging lending products with lock-in periods and insurance products.

They have also made their deposit structures more attractive to ensure a supply of low-cost funding, he added.

“When all banks gravitate towards homogenous pricing across the industry to capture market share, the margins will definitely compress,'' said Renzo.

Those with strong credit risk controls and low expense base will continue to remain profitable; however, balance sheet growth does not necessarily lead to sustainable profitability growth, he cautioned. - by Yap Leng Kuen (The Star)

保险就是现金

What is Rat Race ?

When we just leave college and get a job, we have lots of dreams, and a whole list of things to buy. We felt the freedom because we finally become an adult earning and spending our own money.

We earn, we spend, the more we earn, the more expensive "toys" we can afford.

We buy these "toys" thinking that it is the best way to please ourselves after working so damn hard during the weekdays.

Sometimes, we spend a little bit more and swipe our credit cards a little bit too often.

Then the banks call to say that since we are obedient customers that pay the minimum amount on time, so they increase our credit limits.

With bigger limits, means we can please ourselves a little bit more.

Then we met someone right and decided that it's time to settle down and build a family.

Some of us will take up personal loan to finance the lavish once-in-a-lifetime wedding reception.

After married, we realized that combined incomes means we can afford better, larger things like a dream house and happily sign for a mortgage.

With a new house, we buy furniture and appliances to match with it.

Thanks to the 0%-interest installment plan, we can now afford to buy more furniture.

Soon, a baby comes along. We work harder and harder.

All of a sudden, we wake up to discover that the money we are earning is just merely enough to cover the monthly installments, and loan repayments.

With so many commitments and so many bills to pay monthly, we get stuck with our job.
We couldn't afford to lose it.

We hope and pray for a pay rise and promotion.

We end up forcing ourselves up every morning, pulling the heavy body to workplace, doing boring routine job, waiting for Saturday and Sunday, and the month end salary... We are addicted to the paycheck. We are working harder and harder for money.

Then we wonder, when will all these end?




















This is the typical life in the Rat Race.

Why called Rat Race?

See, everybody living months after months wondering why they are still not earning enough, it's exactly like little hamster running round and round in the metal wheel, come the next day, they are still in the same little cage.


It's a kind of Race that everyone participates but no one ever wins.

Have you ever ask yourself when will you stop running in the Rat Race?



If you were to ask my parents, they will probably tell you that all of these will stop when you retire or die.


Can you bear with it until you retire, or until you die?

Yes, many people are doing that, including my parents.

They believe they have no better option.

They look around, and they see everyone doing the same...

Then they tell themselves, it's life, everyone are working for money...

They work hard all their life, but in the end, nothing much left.

All that is left is a huge bill for the coffin, and few unpaid bills.

Then they say to themselves, it's better not to leave anything to the children, otherwise they will fight for the money...

That's the advice I get from my parents, but I'm sure that's not a workable answer in this 21st century.

Well, I truly believe that all of these will stops when we get out of the Rat Race.

There's no end to the Rat Race, unless you stop running, sit down and think rationally is this what you want out of life. The longer you run in the Rat Race, the less motivated for you to strive to get out of the Rat Race. It becomes a habit.

Let's focus on getting out of the Rat Race as soon as possible.

Let's motivate each others.