Extracts from the address of the Chairman,

Mr Koh Heng Kong,

at the 36^th Annual General Meeting on 31^st March 2009

Annual report on the activities of National Insurance Association of Malaysia ("NIAM") for the year ended 31 December 2008.

It gives me great pleasure to submit my report on the activities of National Insurance Association of Malaysia ("NIAM") for the year ended 31 December 2008.

The year was a satisfactory one with much activity being attained on a broad front, which I am proud to say, was achieved, under difficult market conditions.

Committee

For the year, the Association operated under the following Committee structure:

•  Executive Committee

•  Education Sub-Committee

•  Finance Sub-Committee

•  Sihat Malaysia Standing Committee

•  Teras Malaysia Standing Committee

•  Bijak Malaysia Standing committee

•  Tani Malaysia Standing Committee

•  Executive Committee of National Insurance Claims Soceity

The Executive Committee held 5 meetings during the year and with a total of 48 meetings being conducted by Sub-Committees and Standing Committees. This level of activity is reflective of the commitment of the committee members towards the goals of the Association.

Finance

I am happy to report that the finances of the Association are healthy.

For the financial year ended 31 December 2008, the Association recorded a Net Surplus of RM14,861 (2007: RM5,240) from its operations, bringing the Net Funds of the Association to RM166,153 (2007: RM151,292).

The Association's Cash at Bank amounts to RM162,643 as at 31 December 2008 (2007: RM29,834).

Whereas, Fixed Deposit at Bank is RM108,909 as at 31 December 2008 (2007: RM151,008).

Membership

As at 31 December 2008, the Association's membership is thirty five (35) companies, analysis of which is as follows:

Year 2008 saw the admission of the following new members. The Association welcomes, Asia Capital Reinsurance Malaysia Sdn Bhd, CIMB Aviva Takaful Bhd and AmG Insurance Bhd. In view of AmAssurance Berhad's business reorganization the AmG Insurance Bhd and AmLife Insurance Bhd are now treated as separate entities.

Our effort to constantly project the "Buy Malaysian" campaign logo has reflected the unique strength and nationalistic spirit of our member companies, and has given a significant competitive edge in terms of identity and recognition amongst the consumers of Malaysia.

Our motto, "Owned By Malaysians, For Malaysians", is key to our growth today and tomorrow.

Sihat Malaysia Project

The Standing Committee is chaired by En Muhamad Umar Swift (Malaysian Assurance Alliance Bhd)

"Sihat Malaysia" is a hospital and surgical product for both life and general insurers. The product was launched by the Association in September 1999.

The total cumulative number of Sihat Malaysia cardholders since its inception in the past nine (9) years has reached over 1,296,371 with total cumulative annual premium income of RM369 million.

The sales of the Sihat Malaysia plan during 2008 decreased by 31.18% to RM22,870,429.30 million (2007: RM33,230,561.18 million). This was in view of members having their very own health product with various features.

Sihat Malaysia Standing Committee has appointed two (2) MCOs namely MediExpress (M) Sdn Bhd and Metronic iCares Sdn Bhd in order to adopt a more competitive environment. The MCO fees have now been reduced to RM17.00 per Individual (Child / Adult) and RM45.00 per family.

The Association will continue to take advantage of its economies of scale, of having nine (9) Member companies to promote Sihat Malaysia to a better level.

Teras Malaysia Project

The Standing Committee is chaired by Mr C. Kumaran (MCIS ZURICH Insurance Bhd).

Since the launch of Teras Malaysia in October 1998, it has achieved cumulative sales of over 298,422 policies, with an annualised premium income of RM273 million.

For the year under review, new business sales had declined by 42.17% to RM12,833,736.02 million (2007: RM22,191,841.09 million) principally because member companies wanted to reduce the visibility of the current product till the enhanced product is being officiated.

On 18 November 2008, Teras Malaysia was officially withdrawn and now I'm happy to announce that new product "Teras Malaysia Extra" was launched on 09 February 2009, with extra features of 36 critical illness, daily hospital allowance and funeral expenses. This enhanced plan targets all citizens from all walks of life that need an affordable term insurance protection with a money back reward at plan maturity. 

A press conference was held on 24 February 2009 which was well received by the media. Since its launch, Teras Malaysia Extra has achieved RM126,980.63 annualized premium.

The Teras Malaysia Extra Working Committee has also organised its first Extra Bonanza Competition for Agents from 09 February 2009 till 31 December 2009 with a budget of RM150,000.00.

We believe that Teras Malaysia Extra is another successful initiative by NIAM.

Tani Malaysia Project

The Standing Committee is chaired by Mr Lai Poong Shen (Oriental Capital Assurance Bhd).

Tani Malaysia Scheme was formed on 24 July 2008 with nine (9) NIAM Members participating in the scheme with a total of 64 units equivalent to RM1.6 million. Over the last eight months,   the Standing Committee appointed by the participating member companies have reviewed and approved the policy wordings, FAQ, claim forms, survey forms, underwriting consideration, panel of consulting veterinarians.

The Standing Committee will be arranging Reinsurance on behalf of the Pool Members  and  shall embark on a series of training programme to prepare Consortium Members in the promotion, sales,  underwriting and claims management  of the product.   Whilst,  they have not commence marketing the product, Tani Malaysia is not short of enquiries from the farmers, cooperatives, banks and government agencies.  They are confident that once all systems are in place, Tani Malaysia will be well received.

Bijak Malaysia Project

The Standing Committee is chaired by Mr Koh Heng Kong (RHB Insurance Bhd).

Bijak Malaysia is a first of its kind whole life Insurance plan that provides superior protection coverage.

The six (6) companies have achieved cumulative sales of over 26,930 policies, with an annualised premium income of RM45 million, since its launch in July 2007.

Bijak Malaysia will be organizing a Convention in Bangkok in July 2009 to provide a platform for the distributors to share best practices and success stories with the objective of elevating Bijak Malaysia's performance to a higher level.

Bank Negara Malaysia has issued a new Bancassurance Guideline on 05 December 2008, introducing the new Commission Structure. Hence, the Bijak Malaysia Standing Committee is now working towards the 1st Repricing of the Product.

Seminars

Over the years, NIAM has been focusing its attention on the improvement in professionalism, leadership and marketing skills of our Managers. In the year 2008, we have successfully conducted a total of nine (9) seminars for middle and a top management.

In view of favorable support and feedback from our member companies, we shall be continuing with our seminars and will be carrying out eleven (11) programmes for year 2009.

This programme includes a Top Management seminar which will be held overseas. I hope all or you will be able to attend this overseas seminar.

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 per course.

Further, as a show of appreciation, I am pleased to inform that the Association has re-distributed 80% of the nett surplus earned from 2008 seminars back to Members, in the form of Credit Notes, on a pro-rata basis based on the amounts spent by Members. These Credit Notes can be utilised for any seminars conducted during the year 2009.

I take this opportunity to thank Malaysian Reinsurance Bhd, and specially the President/CEO, En Hashim Harun and the Executive Vice President/COO, En Mustaffa Ahmad, for continuing to support the Association, by sponsoring the course fees of the Facilitators.

Social Activities

The Association has been organising cocktail receptions, with the objective of bringing together CEO's and Senior Management of local companies to develop trust and co-operation amongst our Members. By knowing each other, we should be better able to grow together.

We have also combined these gatherings with launch or award activities for our four (4) products thereby keeping our Member companies' management aware of our activities.

As we will be holding another cocktail later this evening, I invite all of you to please stay on after this meeting.

National Insurance Claims Society (NICS)

The National Insurance Claims Society, was sponsored and launched by NIAM on 15 December 1998. The Society is presently chaired by Mr Melvin Oh with support from thirteen (13) Executive Committee members.

For the year 2008, NICS had successfully organised a full day workshop on "Latest Issues Affecting Marine Insurance Claims" attended by 58 participants and "RBC" attended by 71 participants in June 2008. Further, the Society organized 3 more workshops on Liability Insurance & the Challenges, Underwriting & Claims and Marine Insurance.

The Society has also organized a Seminar on Leadership, Motivation & Dynamic Teambuilding Skills, sponsored by Malaysian Re in August 2008.

Further earlier this month, NICS organized a grand dinner to celebrate its 10th Anniversary and this was attended by 300 guests.

I hope that 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. 

Summary

I would also like to place on record my sincerest appreciation for the support and confidence of our Member companies. It is indeed rare for companies, who are in fact competitors, come together to develop goodwill and mutual support for the common good of all.

I would like to take this opportunity to thank the Officers at Bank Negara Malaysia and specially Madam Yap Lai Kuen, Director Insurance Regulation for their guidance and support in seeing the development of greater local participation in our industry.

Lastly, I would like to express my appreciation to my fellow EXCO Members, all the Standing and Sub-Committees and our Secretariat for their valued support and assistance. Without all the work that they have put in, our success of 2008 would not have been possible. Please join me in expressing a round of applause to all our dedicated Members.

With that, on behalf of the EXCO, may I wish that in this new era for our Malaysian Insurance industry all our Member companies grows from strength to strength.

Thank you.

KOH HENG KONG
Chairman
31^st March 2009