MALAYSIAN MOTOR INSURANCE POOL (MMIP)

Malaysian Motor Insurance Pool (MMIP)

The MMIP which was incepted in 1992 carried on operations with 2 Insurers acting as Servicing Insurers. However, from May 2011, all Insurers and Takaful Operators having a license to carry out general insurance or takaful business were required by the regulators to issue MMIP covers on behalf of the MMIP and this has seen the Pool writing a greater volume of business. The MMIP recorded higher gross written premiums of RM210.5 million in 2011 as compared to RM157.7 million in the preceding year. The growth is largely attributed to the increasing demand for MMIP cover as a result of stringent underwriting selection of motor insurance by market insurers. The MMIP recorded a net loss of RM166.3 million in 2011 as compared to RM164.4 million in 2010. The large deficit was mainly contributed by the Bus class of business. The Pool incurred an overall loss ratio of 195.6% for 2011 as compared to 284.0% in the year 2010. The MMIP’s loss ratio is expected to remain negative since the Pool continues to write large volumes of unplaced market risks.The gross written premiums in 2011 shows a growth of 33.5% against 69.4% in 2010.

Joint Insurance and Takaful Council (JITC)

The Joint Insurance and Takaful Council (JITC) was established in September 2011 with an inter-association agreement signed between PIAM, the Life Insurance Association of Malaysia (LIAM) and the Malaysian Takaful Association (MTA). The formation of the Council marked a milestone for the development of the insurance and takaful sectors in Malaysia. The objective of setting up the JITC is to enhance harmonization between the three sectors as the JITC will foster a higher level of self-regulation in the industry. The JITC would promote consistency in the rules, regulations and guidelines in the life insurance, takaful and general insurance sectors. The JITC would also be used as a mechanism for resolution of any inter-sector disputes or complaints. Each association would be represented by three nominees on the JITC to provide a balanced view of issues that may be addressed by the JITC. Of the three nominees, two will be from outside the sector with a good working knowledge of that sector.

PIAM, LIAM and MTA’s representatives at the JITC Inter-Association Agreement Signing Ceremony

Amendments to PIAM Constitution

Following the gradual liberalization of the insurance industry, the Association felt that it would be timely to amend the PIAM Constitution which limits the seats for non-Malaysian companies on the PIAM Management Committee. The condition which limits the representation of non-Malaysian companies on the Management Committee to three seats had also imposed limitations on the process of electing members to the Management Committee via the rotation rules as some non-Malaysian companies have had to forgo their turn to be elected on the Management Committee. The Association in consultation with member companies adopted the relevant amendments to the PIAM Constitution which were subsequently approved by BNM and the Registrar of Societies. With these new amendments, all member companies of PIAM will not have any restrictions to be elected to the Management Committee and can be actively involved in the affairs of the Association.

26th East Asian Insurance Congress (EAIC) 29th october to 2nd november 2012

The 26th East Asian Insurance Congress (EAIC) will be held in Kuala Lumpur from 29th October to 2nd November 2012. The theme selected for this Conference is “Transforming the East Asian Insurers – Time for Action Now”. This is a biennial conference which is hosted in rotation by the 12 member cities of the EAIC. This will be the third time that Kuala Lumpur is the host having hosted this conference in 1974 and 1988 previously. The Conference will be held at the Kuala Lumpur Convention Centre and is jointly organized and hosted by PIAM, LIAM, Malaysian Takaful Association (MTA) and the Labuan International Insurance Association (LIIA). This conference will also mark the 50th anniversary of the EAIC which was formed in 1962. Kuala Lumpur as the host is looking at streamlining some of the sessions and setting aside more time for networking amongst the participants. The conference will highlight several key topics over the four days including how insurers can change the perception of insurance and how to become the partner of choice to the man in the street; how to adapt to new horizons in talent development and retention as well as to the increasing spate of natural disasters; and how insurers can engage the society in responding to these challenges. More details on the 26th EAIC can be obtained from its website at http://eaic2012kl.com

East Asian Insurance Congress (EAIC) Executive Board Meeting held on 24th October 2011 – Members of the Executive Board and representatives from EAIC Member Cities

General Insurance and Takaful Actuarial Seminar

The Association jointly organized the General Insurance and Takaful Actuarial Seminar with the MTA and the Actuarial Society of Malaysia (ASM) on 24th and 25th May 2011. The seminar with the theme “Taking Calculated Risks” had the objective of promoting and encouraging development of actuarial related expertise in the general insurance and takaful industry especially in view of the risk-based capital regime. The introduction of the Risk Based Capital Framework in 2009 had taken the insurance industry to a new era of underwriting where capital adequacy levels are deemed to be of high importance and are required to commensurate with the risk profiles of insurance companies. Although the framework allows greater flexibility for insurers to operate at different risk levels in line with their respective business strategies, the balance of risk profiles against the capital adequacies of insurance are paramount in ensuring companies are able to meet the targets set. These exercises of ensuring capital adequacy against risk profiles require mathematical or actuarial assessments, which can only be provided by experts. In view of these factors, the demand for actuarial assessments in the insurance industry is on the rise and the need for lesser reliance on outsourcing and more emphasis for insurance companies to have their own in-house actuarial teams had been encouraged by BNM. The speakers for the seminar included key speakers from BNM. Other speakers were sourced from both local and international actuarial firms. Their presentations focused on capital and risk management approaches for insurance, capital modeling tools available for insurers, practical considerations in motor pricing, de-tariffing of the motor insurance sector, general insurance reserving, applying actuarial judgments and also development of in-house actuarial teams.

Tri-partite Liaison Meeting between PIAM, General Insurance Association of Singapore (GIAS) and General Insurance Association of Brunei Darussalam (GIAB)

The Management Committee of PIAM hosted the annual tri-partite liaison meeting with the GIAS and GIAB on 30th June to 1st July 2011 in Penang. The objectives of these meetings are to maintain close rapport with the general insurance associations in the region and also to discuss issues of mutual interest. The meetings also provide a platform for exchange of information on developments in the respective markets and sharing of information on initiatives and activities undertaken by the three associations. The forum also fosters mutual understanding and encourages closer co-operation to address issues which affect the region.

PIAM/GIAS/GIAB Liaison Meeting in progress


PIAM/GIAS/GIAB Liaison Meeting – An exchange of souvenirs between PIAM Chairman, En. Hashim Harun and the President of GIAS, Mr. Derek Teo

The next liaison meeting which will be hosted by the GIAB will be held in Brunei.