What this blog is about?

Purpose: This blog provides brief insurance news and digest for the busy executives. It is a handy archive covering major insurance news in Malaysia and nearby countries. 

Disclaimer: While all attempts are made to ensure the accuracy of the news herein, we are not liable for any loss arising from the use of any information contained in this blog.

Reproduction: You may reproduce materials published here provided that the source (actuaries.com.my/insurance-news) is properly acknowledged.

SMX deferred annuity product launched 

Insurance News

  -  April 22, 2014
Maybank launches a deferred annuity product named Smart Retirement Xtra (SMX) and targets to secure RM48 mil premiums this year.  http://bit.ly/TAS140422a 


Posted by Loo Hai Tuesday, April 22, 2014 9:04:00 PM Categories: Annuity Etiqa Product
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Allianz to launch retirement products by year end 

Insurance News

  -  August 6, 2013
Allianz is planning to launch its retirement products by end of the year. With its new partnership with HSBC, Allianz is targeting RM300 mil new business this year. The best selling products for the company are critical illness and health insurance, with education product as the 3rd pillar.
Allianz to grow assets under management by 10%-15% in H2 - The Sun Daily KUALA LUMPUR (Aug 6, 2013): Allianz Malaysia Bhd aims to grow its assets under management (AUM) by 10% to 15% in the second half of this year from about RM10 billion now, as it launches new retirement-linked insurance products, said its CEO Jens Reisch.


Posted by Loo Hai Tuesday, August 6, 2013 8:18:00 PM Categories: Allianz Annuity Bancassurance Medical Product Product PRS Strategy
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Average Malaysian is grossly under-insured - LIAM 

Insurance News

  -  Feb 18, 2013
LIAM's press release:
  1. RM6.7 bil claims in 2012, 19% higher than RM5.6 bil in 2011.
  2. RM7.6 bil paid on maturity and surrender.
  3. RM1.02 trillion sum insured in 2012, 8% higher than RM946 bil in 2011.
  4. Per capita sum insured: RM34,700 (2012), 6.7% higher than RM32,533 (2011).
  5. Huge protection gap compared to ideal sum insured per capita of RM310,000.
  6. New business weighted premium grew 2.2% in 2012 to hit RM4.3 bil.
  7. 49.5% (2012) of new business was ILP, compared with 45.6% in 2011.
  8. Anticipated NB growth rate in 2013: 10%.
  9. More annuity products will be rolled out.
  10. Medical insurance to enjoy high growth rate.
  11. Alternative channels will grow but agency channel will still be dominant.
LIAM: Life insurers paid RM6.7b in claims in 2012 - The Star KUALA LUMPUR: A total of RM6.70bil was paid out in life insurance claims in 2012, up 19% from RM5.6bil a year ago, according to the Life Insurance Association of Malaysia (LIAM).
LIAM: New commerce to grow in 2013 - Business Times The Life Insurance Association of Malaysia (LIAM) envisages that new business will grow 10 per cent this year, taking into consideration the projected economic growth rate of about 5 per cent.


Posted by Loo Hai Monday, February 18, 2013 5:54:00 PM Categories: Annuity LIAM Medical Product Outlook Product
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PRS or Deferred Annuity? The competition has heated up. 

Some PRS players are feeling the heat of not being able to guarantee a return on their PRS funds. This is especially so after the launch of a deferred annuity product by an insurer which guarantees the annuity payments (see how-attractive-is-the-great-retirement-plan-return on the calculation of the guaranteed return).

A PRS distributor challenged the validity of the term "guarantee" (http://bit.ly/TAS1212d) and hinted that the rules governing deferred annuity products by BNM are not as stringent as the requirements by the Securities Commission.

The insurer, Great Eastern, has since refuted the arguments (http://bit.ly/TAS1212c).  Under BNM's regulations, the term "guarantee" is not to be used freely. The guaranteed benefits are subject to stringent actuarial reserve under the Risk Based Capital framework.  It is also not fair to say that as insurers do not issue prospectus, the disclosure level is less stringent. BNM requires deferred annuity products to meet the Retirement Savings Standards before the products are allowed to be offered to the public.

Meanwhile HwangIM chief product officer was quoted as saying that PRS clients are not subject to any lock-in period. Our understanding from reading their PRS Disclosure Document is that this is not strictly true.  There is a lock-in period of 1 year as "The first request for a withdrawal from a private retirement scheme may only be made after one year has elapsed from the date of the first contribution to the private retirement scheme" (Clause 7.3, Disclosure Document dated 31 October 2012).

There are other subtle differences between a PRS product and a deferred annuity, some of which were highlighted by us in our recent presentation to Actuarial Society of Malaysia.

To us, whether a deferred annuity or a PRS product is better really depends on the needs of the investor. Factors to consider include the guaranteed yield vs the loss in potential upside return, the discipline of the investor in handling a lump sum at retirement vs receiving annuity payments over a period, the portability of the product, the trust placed by the investor on the company and the service level provided by the company and its distributors.

Posted by Loo Hai Wednesday, December 12, 2012 4:24:00 PM Categories: Annuity Great Eastern PRS
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How Attractive is the Great Retirement Plan Return? 

So how attractive is the investment return for a 35-year old policyholder who purchases Great Retirement Plan?

Based on the information provided in the newspaper article, we apply the following actuarial formula to work out the return to the policyholder:

By solving the above actuarial formula, we obtain an annual return of 3.56%.


As a comparison, EPF has a minimum guaranteed return of 2.5% and has declared between 4.25% to 6% in the past 10 years.

Maybank is currently offering 3.8% on fixed deposit of 60 months.

News Background

Great Eastern became the first life insurance company to roll out a deferred annuity product to take advantage of the RM3,000 tax relief, in response to the various Private Retirement Schemes (PRS) launched by unit trust companies.

The Great Retirement Plan provides guaranteed yearly income of 10 or 15 years from age 60 and 55 respectively. An example was given in the newspaper article for a policyholder aged 35:

Premiums paid: RM3,000 from age 35 for 10 years

Deferred annuity received: RM65,475 in 15 equal installments from age 55.

Posted by Loo Hai Thursday, November 22, 2012 2:01:00 PM Categories: Annuity Great Eastern PRS
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News Posts 20121001-20121007 

Insurance News

4 Oct 2012  -  Public
With the removal of the 8% tax on investment income of the annuity fund and RM3,000 tax relief on annuity premiums, insurance companies are likely to launch a slew of annuity products in the near future.  http://bit.ly/TAS1004b

INSURERS are set to launch a slew of annuity products in the near future now that the government has proposed to remove the eight per cent investment income tax on deferred annuity.

Insurance News

4 Oct 2012  -  Public
The takeover deal of ING Malaysia and Thailand by AIA could be completed by year-end and it is worth US$1.8 bil. http://bit.ly/TAS1004a
Talks in advanced stage for AIA to buy ING’s ops in Malaysia and Thailand »
PETALING JAYA: A deal worth about US$1.8bil could be struck very soon between AIA Group Ltd and ING Group for the former to acquire the latter’s insurance operations in Malaysia and Thailand as part o...

Insurance News

2 Oct 2012  -  Public
MII has been asked to conduct a research on the adequacy of medical cover and the reasonableness of medical insurance premiums in Malaysia.http://bit.ly/TAS1002a
Call for medical insurance study to ensure consumers adequately covered at reasonable charges »
KUALA LUMPUR: There is a need for a comprehensive research in the area of medical insurance to ensure consumers are adequately covered with reasonable charges, Deputy Finance Minister Datuk Donald Lim...

Insurance News

1 Oct 2012  -  Public
MAA Takaful claimed leadership in regular investment-linked (basic) and single premium investment-linked businesses with market shares of 31% and 54% respectively. It attributed the success to company's agency force, "war room" concept, products and services as well as its technology and online initiatives.http://bit.ly/TAS1001d
MAA Takaful out to maintain leadership in investment-linked business »
KUALA LUMPUR: MAA Takaful Bhd, a wholly-owned subsidiary of MAA Group Bhd, is confident of maintaining its market leadership in the investment-linked business, notably in the regular investment-link...
Insurance News1 Oct 2012
Anyone has the corresponding market share figures for PruBSN?

Insurance News

1 Oct 2012  -  Public
Steve Ong, the previous CEO of ING Funds, has taken up a new role as the CEO of the Private Pension Administrator Malaysia. http://bit.ly/TAS1001c
Steve Ong is CEO of PPA »
PETALING JAYA: The Private Pension Administrator Malaysia (PPA) has appointed Datuk Steve Ong Chong Gain (pic) as its chief executive officer with effect from Oct 1.

Insurance News

1 Oct 2012  -  Public
Great Eastern is planning to launch an annuity product by year end to take advantage of the RM3,000 tax relief. Its new business weighted premium grew 8% in 1H, the number of agents grew 27% and the Malay agents grew 179%. In 2H, it would focus on protection-based products in particular medical and critical illness products. http://bit.ly/TAS1001b
Great Eastern records 8% growth in new biz premium in H1 »
Great Eastern Life Assurance (Malaysia) Bhd recorded 8% growth in total weighted new business premium in the first half of 2012 and it expects stronger momentum in the second half, with continuous foc...


Posted by Loo Hai Wednesday, October 17, 2012 4:16:00 PM Categories: AIA Annuity Great Eastern ING MAA Merger MII PRS
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