| Extracts from the address of the Chairman, En Majid Mohamad, at the 32nd Annual General Meeting on 29th March 2005.
The Association's members are local controlled insurers, comprising 4 of which are Life Insurers, 6 Composite Insurers, 17 pure General Insurance Companies and the balance 3 being Re-insurers. Highlight some of the activities that the Association has carried out: • TERAS MALAYSIA Teras Malaysia, which is a life insurance product that caters for the insurance needs of the middle and working class, has now entered its sixth year of operation. Teras Malaysia has been well-accepted by the public and the eight participating companies have achieved a sales record of over 217,315 policies with an annualised premium of RM181 million for the 6 years since October 1998. Teras Malaysia have held six (6) Super Bonanza Competition for agents since its launch. The 6 th Super Bonanza Competition Prize Draw is to be held later after this meeting and the Grand Prize will be Proton Gen-2. The 7 th Super Bonanza lucky draw contest is currently in progress and is scheduled to end in December 2005. All Agents are entitled to one lucky draw coupon for every ringgit of new premium during the contest period, and for your information, a budget of RM100,000 for the prizes has been allocated. Due to large negative cashflow in the initial years, thus incurring strain for the participating members, the Teras Steering Committee had studied the database built up since the inception. Based on the study the Committee has re-priced Teras Malaysia premium by 20% effective from 01 st February 2005. The Teras Malaysia Steering Committee is chaired by En Mohd Salihuddin of Mayban Fortis Bhd. This Committee under En Salihuddin's very capable leadership has also planned the next phase of their marketing campaign, and look forward to even better results from Teras Malaysia in 2005. • SIHAT MALAYSIA Sihat Malaysia is a hospital and surgical product for both life and general insurers. The product was created out of the joint effort of our member companies in September 1999 with the objective of using common pricing, policy conditions, coverage and promotional activities. In the last five years, the participating companies have invested heavily in product promotion through aggressive advertising campaigns in the press, billboards, radio and TV. They will continue to take advantage of the economies of scale of having 11 member companies sharing the advertising and promotional expenditure to promote the Sihat Malaysia brand name. The Sihat Committee has been working together with Joint Committee of PIAM and LIAM and has submitted the final proposal on Hospital And Surgical Insurance (HSI) Underwriting Guide to Bank Negara. The HSI Guidelines will be used as a Guide only for underwriting for Individual and Section 186 policies. Further, use of Standardised Definitions will be Mandatory for all medical policies and the guide will only apply to Hospitalisation And Surgical Insurance Policies. The Committee has requested for 6 months for implementation of the changes. To-date, the Committee is happy to report that the total number of Sihat Malaysia cardholders have surpassed the 1,000,000 th mark with total annual premium income of RM260 million. To encourage greater sales activity among the Agents and to create greater retention of Sihat Malaysia policies for 2004, the Standing Committee has planned a special contest, “Sihat Malaysia Merdeka” which commenced from 01 May 2004 to December 2004. The prize draw for this contest is scheduled tentatively for August 2005. The Sihat Malaysia Standing Committee is chaired by YM Tunku Ya'acob, with the Sub-Committees headed by Mr Sonny Tan, Pn Nora Ishak, Mr Chong Chee Yoong and Ms Foo Mei Yuen. • PENSION ANNUITY The Pension Annuity Standing Committee, together with their actuaries has successfully finalized “Anuiti Malaysia” plan designed for members of the public to plan for their retirement. It has two components, pre-retirement and post-retirement components. The retirement is investment linked plan while the post retirement plan is the annuity plan which will provide lifetime incomes to retirees. “Anuiti Malaysia” is designed to complement EPF's role of providing income security to the conscious Malaysians for their retirement. The post-retirement component of Anuiti Malaysia is also available to those EPF contributors who have attained the age of 55 years. They can withdraw their money from EPF and purchase the post-retirement component of Anuiti Malaysia. The Actuarial Certificate has been submitted to Bank Negara. Meanwhile, the Standing Committee is planning for “Anuiti Malayisia” launch by inviting Y.B Tan Sri Dato' Nor Mohamed Yakcop, our Finance Minister II, Y.B. Datuk Dr Ng Yen Yen, Deputy Finance Minister II and YBhg Tan Sri Abdul Halim, Chairman of EPF. The Standing Committee hopes that with strong advertising, the public will take up the Anuiti Malaysia product in large numbers. The Annuity Standing Committee chaired by Mr Ng Lian Lu of AmAssurance Bhd. • TANI MALAYSIA The Government is giving great attention to the Third National Agricultural Policy. The latest development of our proposal for agriculture insurance product called ‘Tani Malaysia'. Bank Negara and Ministry of Agriculture have decided that the proposed Paddy Scheme may not supported by the farmers due to proposed premium rate and the lack of familiarity for insurance coverage. However, Bank Negara has requested NIAM to work out a framework for National Poultry and Aquaculture Insurance Scheme. This report prepared by the appointed Consultant, Mr Chin Sew Pook has been submitted to Bank Negara for their consideration. The Tani Malaysia Technical Committee chaired by Mr Lai Poong Chen of Oriental Capital Assurance Bhd. • SEMINARS NIAM has been focusing its attention on the improvement in professionalism, leadership and marketing skills. In the year 2004, NIAM have successfully conducted a total of 8 seminars for Middle and 1 for Top Management. In view of favourable support and feedback from member companies, NIAM shall be continuing with seminars and will be carrying out 9 programmes for year 2005. To encourage our Members to send more staff for training, NIAM will continue giving 10% discount to member companies who register 3 or more participants. Further, NIAM has awarded seminar vouchers worth RM1,500 to eight (8) member companies who have sent ten (10) or more participants to NIAM seminars held last year. These vouchers can be utilized for any seminars during the Year 2005. NIAM Eexcutive Committee would like thank, Mayban General Assurance Bhd, Mitsui Sumitomo Insurance (Malaysia) Bhd, Multi-Purpose Insurans Bhd, Oriental Capital Assurance Bhd, Progressive Insurance Berhad, RHB Insurance Bhd, Royal & Sun Alliance Insurance (M) Bhd, Uni.Asia General Insurance Bhd for their good support towards NIAM Education & Training. In the same breath, NIAM urge those who are not so active, or not sending any staff at all, to take a look again at our programme and give support to your association. NIAM looks forward to the continuous support from all the Members to join in our pursuit of knowledge excellence. NIAM take the opportunity to thank the Board of Directors of the Malaysian-Re, and specially the Managing Director, En Anuar Mohd Hassan and the Senior General Manager, Encik Mustaffa Ahmad, for continuously supporting NIAM, by sponsoring the course fees of the Facilitators. With the Malaysian-Re's kind and generous subsidy, the seminar fees charged to our members are much lower, thus enabling more participants from member companies to improve their skills and knowledge. • NATIONAL INSURANCE CLAIMS SOCIETY (NICS) NICS or the National Insurance Claims Society, was sponsored and launched by NIAM on 15 December 1998. The Society is presently chaired by Pn Rosliza Yusof from Kurnia Insurans Bhd, with support from her 9 Executive Committee Members. For the year 2004, NICS organized two (2) training programmes on Customer Service Skills and Combating Insurance Fraud for Claims Examiners and Executives. Further 18 participants from higher level in the claims industry attended the seminar on Insurance Claims Benchmarking Workshop which was held in Bali. The Executive Committee had a Brainstorming session on Bodily Injury Claims attended by Allianz, General Bhd, Malaysian Motor Insurance Pool (MMIP), Pacific & Orient Insurance Bhd, Motor Insurance Bureau (MIB) and American Home Assurance Bhd. The Committee is in the midst seeking legal opinion and advice for the benefit of the industry from legal practitioners based on this session held in October 2004. NICS will continue to have the full support from our member companies, for if we are serious about managing claims we must commit our time and resources to this very worthy organisation. The impact of claims, as the single largest cost component of our operations, should never be underestimated. Therefore, the development of professional and highly competent claims management is paramount for the long-term success of our industry. • GUIDANCE AND SUPPORT FROM BANK NEGARA MALAYSIA NIAM would like to thank the Officers of Bank Negara Malaysia for their guidance and support for all the projects that we have undertaken. Their invaluable guidance to our various proposals help us to realize Teras Malaysia, Sihat Malaysia, Annuity Malaysia and of late, Tani Malaysia. No industry can progress without a caring Regulator; NIAM are certainly progressing, and are certainly being well taken care of.
MAJID MOHAMAD Chairman 29th March 2005
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