Racing not covered by motorcycle insurance – PIAM

Racing not covered by motorcycle insurance – PIAM

In Bikes, Local News / By Anthony Lim / 4 March 2016 2:05 pm / 19 comments

More on the topic of legalised motorcycle street races, which Federal Territories minister Datuk Seri Tengku Adnan Tengku Mansor says he plans to hold in KL. The Persatuan Insurans Am Malaysia (PIAM) says that a motorcycle insurance policy does not cover activities such as racing, and it is an exclusion under the policy, The Sun reports.

The association told the publication that while legal and professional racers can get insurance coverage for legitimate racing, illegal racing is not covered by insurance. It said any such activity is done at the rider’s own risk, and if there is an injury caused to a third party or damage to another person’s property, the rider will be personally responsible for any damage costs.

“In the event an Insurer (Insurance Company) is held liable to pay by virtue of the provisions under Section 96 of the Road Transport Act, the insurer can seek indemnity from the motorcycle owner and/or rider,” PIAM explained, adding that it advised those taking part in such activities to refrain from it.

The insurance body stated this in response to Tengku Adnan’s proposal, which moots the idea of closing specific roads once a week to allow motorcyclists to race in legal fashion.

lack boxes for commercial vehicles need buy-in 4 FEBRUARY 2016 @ 11:01 AM

Black boxes for commercial vehicles need buy-in 4 FEBRUARY 2016 @ 11:01 AM
Read More : http://www.nst.com.my/news/2016/02/125709/black-boxes-commercial-vehicles-need-buy

I REFER to “Johor Bus Operators Association seeks abolishment of monitoring device requirement” (NST, Jan 28). The majority of the 47,441 buses in the country are insured by the Malaysian Motor Insurance Pool (MMIP) as most insurance companies decline to insure them, particularly those with poor claims records. However, it would be unfair for insurers to lump all buses as high risk, as not all of them are. Moreover, there are different types of buses, such as stage, express, excursion, chartered, worker or school buses. MMIP was formed in 1992 to provide the minimum motor insurance coverage required by law for owners unable to or have difficulty securing motor insurance.

All general insurance companies operating in the country are required to share losses in this pool, as decreed by Bank Negara Malaysia. In an attempt to cut mounting losses, MMIP initiated this “black box” project. In January, bus operators were shocked when notified that motor insurance would not be renewed after Feb 1 unless their buses are fitted with a monitoring device by an appointed vendor. Unlike taxis, it is not easy to stop buses from running, as operators also have to seek approval from the Land Public Transport Commission (SPAD) to suspend services. Moreover, operators have to cough up RM3,400 for each monitoring device for installation, and RM900 annually for maintenance.

Over the past few decades, the attempts to introduce “black boxes” for commercial vehicles have been dismissed by the public as nothing more than money-making projects. Stage bus operators are making losses, as they are required to run unprofitable routes, and fares have to be kept low as the majority of the passengers cannot afford to travel in taxis or buy their own cars. Stage buses are critical for many people because of their extensive network, and more commuters ride them than trains. As it costs the government less to subsidise private stage bus companies than to expand government-run bus services, the “Interim Stage Bus Support Fund” was set up on January 2012. While stage bus companies are on life support, MMIP seems keen to draw blood from these ailing patients.

Earlier, many buses had been fitted with a Global Positioning System, allowing SPAD to monitor and track them. Surely this is known to MMIP, so, what is the justification for another monitoring device? If MMIP requires funding, it should turn to government agencies, such as Bank Negara, and enlist support from SPAD instead bleeding stage bus operators. Just like the Automated Enforcement System, vehicle telematics is also an effective measure to promote road safety. But, without seeking the necessary buy-in, it is sure to result in a public outcry. n YS CHAN, Kuala Lumpur
Read More : http://www.nst.com.my/news/2016/02/125709/black-boxes-commercial-vehicles-need-buy

Gov’t mulling age limit for commercial vehicle drivers

In Local News / By Gerard Lye / 8 January 2016 5:30 pm /

The government may be required to enforce an age limit for drivers that operate commercial vehicles. This comes in light of a recent decision by insurance companies to no longer provide coverage for commercial vehicle drivers over the age of 65.

According to The Sun, Deputy Transport minister Datuk Aziz Kaprawi indicated that the Road Transport Department (JPJ) may have to review the issuance of the Goods Drivers Licence (GDL) and Public Service Vehicle (PSV) licence to elderly drivers.

“It looks like we have to synchronise the regulation for commercial vehicle drivers due to the latest policy by the insurance industry,” he said. However, Aziz stated that the Transport Ministry will meet with Bank Negara Malaysia and various insurance players to come to a consensus on the issue, with the aim of extending the age coverage for commercial vehicle drivers.

Warranty W.4CV, which deals with the age limits for drivers of commercial vehicles outlined by Malaysian Motor Insurance Pool (MMIP), says that “only drivers whose age is between 21 and 65 years on the driver’s last birthday shall be permitted to drive the insured vehicle.” It is yet unknown when the policy came into effect, but it is believed that insurance companies have been applying it since 2014.

Established in 1992, and is a special-purpose entity set up and owned collectively by all general insurance companies operating in Malaysia. Its primary aim is to provide motor insurance coverage to vehicles which may be considered ‘high risk’ and which will not be underwritten by any single insurance company.

The Sun said the issue came to prominence when a 73-year-old lorry driver, Liew Kon Yew, discovered he was not covered under the company’s insurance policy after getting involved in a road accident in Kajang with an MPV two years ago. An experienced driver, Liew has had clean records of more than 40 years driving many different types of lorries.

Malaysia Heavy Construction Equipment Owners Association commercial affairs officer Lam Kok Wai chimed in on the issue, stating that industry players were caught by surprise with the policy. “We admit that we didn’t read all the clauses in the insurance policy as drivers above 65 had been getting coverage,” he said.

“Mr Liew passed the medical test every year as he was deemed to be in good health with excellent physical attributes. So it is puzzling that the MMIP is getting ahead of the government,” said Lam, who added that the real yardstick of able and healthy drivers is the annual renewal of GDL with RTD.

Meanwhile, Kuala Lumpur and Selangor Lorry Association general-secretary Alvin Choong said the MMIP’s decision to renounce liability when it comes to elderly commercial vehicle drivers is setting a bad precedent.

He deliberated that “to perceive that elderly drivers cognitive skill as weak is the responsibilities of the government. In doing so, driver over age 65 should not be able to renew their GDL, right?” He also suggested that the next best solution is to impose a slight surcharge on insurance premiums.

Malaysian School Bus Association Alliance president Mohd Rofiq Mohd Yusof also urged the authorities to put into consideration the livelihoods of nearly 10,000 drivers across the industry (taxi, lorry and bus operators). He said that many of them above 65 are government retirees and the operators of school buses and taxis. “They are safe and careful drivers. Why single them out? We are talking about their livelihood.”

Should commercial vehicle drivers over 65 years of age be denied insurance coverage? Or should they not be allowed to operate commercial vehicles altogether? What are your thoughts on the matter?

http://paultan.org/2016/01/08/govt-mulling-age-limit-for-commercial-vehicle-drivers/

Lloyd's looks for Malaysian expansion

by Maryvonne Gray | 03 Aug 2015

Lloyd’s of London is applying for a Malaysia onshore licence as part of a broader push into Asia.
Group chairman John Nelson said a licence would enable Lloyd’s to write more cover than the $137 million of business it does via Singapore, London and Labuan, Malaysia’s offshore jurisdiction.
“If you have people on the ground you get better access and a much better understanding of the risks,” he told The Financial Times.
“If we look at our performance around the world where we go onshore, our performance improves.”
Asia accounts for about 12% of the group’s business, with Nelson saying he expected that to grow at a faster rate than the region’s economic growth as governments and companies looked to close an insurance penetration gap.
Insurance penetration in the 10-member Association of Southeast Asian Nations is equivalent to about 3% of GDP, compared with a global average of 6%.
However, the region is more vulnerable to natural catastrophes than any other part of the world, The Financial Times reported.
Over the past 20 years Asia has borne almost half of the global economic cost of natural catastrophes – about $53 billion each year, according to the Asian Development Bank.

Fitch: Reforms Prepare Malaysian Insurers for Liberalised Market Sun Apr 19, 2015 11:16pm EDT

http://www.reuters.com/article/2015/04/20/idUSFit91712520150420

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Malaysian Insurance Market Dashboard 2015 here SINGAPORE, April 19 (Fitch) Fitch Ratings says in a new report that ongoing regulatory developments will enhance the Malaysian insurance sector's global competitiveness as it transitions into a liberalised market. With intensified market competition, under-capitalised insurers and takaful operators are likely to seek strategic investors or alternative capital to meet their capital needs.

Fitch believes the level of M&A activities will persist in the near term, given the attractive growth prospects in Malaysia's insurance industry. General insurers' underwriting performance is expected to remain steady due to favourable margins in fire and non-motor classes. This will offset the pressure from adverse claims experience in the compulsory motor class despite gradual tariff increases over the years. The claims exposure from the two airplane mishaps in 2014 and major flooding in December 2014 are likely to be manageable for the industry as a whole, given the relatively low penetration ratio.

Fitch does not expect the adoption of a goods and services tax from April 2015 in Malaysia to adversely affect the industry's performance. The agency believes premium growth will remain stable overall, underpinned by growing disposable incomes, rising consumer awareness and risk sophistication. Broader distribution networks and new product offerings by insurers and takaful operators will continue to support the industry. The industry's capital strength measured by risk-based capital ratio was strong at 253% in 2014 despite the regulatory hurdles and is well-supported by insurers' surplus growth.

The 'Malaysia Insurance Market Dashboard 2015' is available at www.fitchratings.com or by clicking on the link in this media release. Contact: Thomas Ng Analyst +65 6796 7224 Fitch Ratings Singapore Pte Ltd 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Siew Wai Wan Senior Director +65 6796 7217 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available on www.fitchratings.com ALL FITCH CREDIT RATINGS ARE SUBJECT TO .

Business ‘General Insurance detariffication likely to be partial’

Read more:http://www.theborneopost.com/2015/03/21/general-insurance-detariffication-likely-to-be-partial/#ixzz3V10l9GNn

KUCHING: The possible General Insurance (GI) detariffication of motor and fire insurance is likely to be ‘partial’ as there will be premium bands to prevent the risk of under-pricing premiums relative to risk.

Hence, analysts observed that this eliminates the risk of a probable severe GI margin erosion due to irrational competition.

RHB Research Sdn Bhd’s (RHB Research) channel checks suggest that the GI detariffication of motor and fire insurance may materialise in the second half of 2016 (2H16).

“Theoretically, GIs should not under-price a product if it bears a high loss ratio and places a heavy strain on its capital adequacy ratio (CAR).

“This effect caused the collapse of the GI industry in other countries when they experienced full detariffication together with absent strong regulatory capital enforcements.

“BNM is aware of this fact and stated that the risk of industry underpricing would be mitigated by applying premium bands, improving under-writing (UW) standards and continuing to enforce strict capital buffering requirements.

“We think the premium band is essentially a form of restricted deviation on premium change for motor and fire insurance products,” the research firm explained.

It added, “Given the higher CAR for GI, we take it as a leading indicator that the industry players may be adding further buffers to preserve capital in anticipation of uncertainties – which amongst others include the industry detariffication for GI and the life insurance (LI) framework for LI, and possible indication of heightened competition, given that some insurance players may have greater appetite to underwrite riskier businesses.”

Taking into account the possible changes in product pricing and competition, RHB Research said it expected the detariffication to not only be ‘partial’ but also gradual.

“We retain our assumption of a slight decline in UW margins for the GI insurers in the financial year 2016 (FY16) from FY15, though we do not foresee further downside risks in margins in FY16,” it said.

The research firm projected a six to nine per cent gross premium growth for GI and general takaful (GT) insurers in FY15, in line with the softened economic growth similar to FY14’s.

Meanwhile, on the growth of LI and family takaful (FT), RHB Research said the insurances’ long-term growth is expected to be anchored by low penetration.

It explained, “According to Life Insurance Association of Malaysia (LIAM), the low penetration rate, which is 54 per cent of the population insured, indicates that LI and FT players have more opportunities to reach out to policyholders in urban, suburban and rural areas.”

LIAM also believes that the remaining 46 per cent could be concentrated in rural areas.

RHB Research said, “Additionally, developing products to suit the different life stage needs of customers and introducing new delivery channels to reach out to this 46 per cent is possible.

“Cross-selling initiatives could also be leveraged for the 54 per cent insured to cater for areas of insurance needs that are still inadequate.

“All these are in line with our own estimates of Malaysia’s low LI and FT penetration rate of 54 per cent of the population insured, 3.1 per cent premium to gross domestic product (GDP) and 1.59-times sum insured over gross national income per capita for 2014.”

The research firm also believed Malaysia’s LI’s longterm growth could be dictated by a rising middle income population as the United Nations sees Malaysia reaching ageing population status by 2030.

It noted ageing population status is more than 15 per cent of the population age is more than 60 years old.

Aside from that, the research firm highlighted that mergers and acquisitions (M&A) have multiplied for insurers in the past few years at an averaged 2.3-folds P/BV, with transactions for GI and GT reportedly between 1.1 to 2.4-folds and LI and FT said to be higher at two to 3.2-folds.

It projected a moderate sector earnings growth of eight to nine per cent from its double-digits forecasts.

Read more: http://www.theborneopost.com/2015/03/21/general-insurance-detariffication-likely-to-be-partial/#ixzz3V10wb02Q