Economic package good for insurance


  • Business
  • Tuesday, 08 Apr 2003

By ELAINE ANG

MALAYSIA National Insurance Bhd (MNI) expects an increase in demand for insurance if the stimulus package to be introduced soon by the government is successful in generating more economic activity, according to managing director and chief executive officer Ahmad Subri Abdullah. 

He said there would be increased demand for certain types of insurance depending on which sector the stimulus package would be concentrating on.  

“If the construction industry is one of the sectors, then there would be more demand for insurance related to the construction industry like workmen compensation. This would provide an opportunity for the insurance industry and cushion a slowdown in other parts of the economy,” he told Starbiz

Subri said the outlook for the insurance industry was stable but did not anticipate any tremendous growth due to global uncertainties.  

However, he feels that initiatives taken by the government to pump prime the economy would soften any dramatic downward movement in the industry. 

Ahmad Subri Abdullah

On the war, Subri said the major impact would be on shippers and exporters as insurance rates for marine cargo and marine hull would increase if the goods and ships plied the Middle Eastern region due to the exposure to war. 

He said for the longer and medium term, the impact on the company would depend on how war would affect the economy as a whole and how the market would react to it. 

“MNI being a major player in the insurance industry would also be affected by a slowdown in the economy. If the equity market is affected, this in turn would affect MNI and other insurance companies which have a substantial amount invested in the equity market,” he said. 

Subri said MNI’s major source of revenue was from its corporate insurance sector, which accounts for about 60% of its business.  

He said the company had developed a niche market for itself in the corporate insurance business and serviced large corporations. 

“Larger corporations are comfortable dealing with MNI as the company, with shareholders' funds of RM1bil and an asset base of over RM5.8bil, would have the capability to handle any potential claims that may arise,” he added.  

With this, he said MNI's strategy was to develop its insurance business from small businesses like those in the retail and small-scale industry and also personal insurance. MNI also has plans to develop and further enhance its life insurance market.  

Some of its plans, Subri said, included the revamp of its agency force, reviewing its product offering by coming up with new products or even repackaging them, and improving its services to its life insurance customers. 

According to Subri, the company’s life insurance sector is still very new and would take another two to three years before results were seen.  

Another area of focus, according to him, is MNI Oneline, the company’s one-stop contact centre for insurance purchases, policy inquiries, servicing and claims. 

“For mature markets like the US and Europe, the way to purchase insurance is through the telephone,” he said. 

He said that about 30% to 40% of insurance purchases in Europe were through the telephone. 

Subri said an insurance purchase through MNI Oneline only took 12 minutes to complete.  

“Once the quotation is accepted, payment is made through the credit card and accepted, the policy is printed and delivered by normal mail to the customer,” he said. 

According to Subri, once payment is accepted the customer would be insured. 

Currently, the reach of the MNI Oneline is restricted as the only payment accepted is through the credit card.  

Subri said MNI was looking at the possibility of the centre accepting other payment modes and sees the introduction of the debit card as something very positive.  

“With the additional payment mode, the number of insurance policies closed through MNI Oneline could exceed the 6,000 policies targeted per year,” he said.  

The centre currently has 20 consultants with the capacity to increase to 50 seats with no additional investments. 

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