Life insurance firm has embarked on transformation strategy which it says has strengthened core foundation and operational platforms of its business
A MANAGEMENT shake-up has occurred at Gibraltar BSN Life Bhd following alleged multi-million insurance investment fraud cases at the life insurance company.
Dubbed collectively as “the biggest insurance scam in Sarawak” by media in Sabah and Sarawak, the cases, which came to light late last year, allegedly involved Gibraltar BSN agents collecting insurance premiums amounting to millions from over 150 customers for policies that did not actually exist.
According to reports, the customers, mostly from Sibu, Sarawak, were enticed by “returns offered of between 8% and 14% per annum”.
In some cases, there were also allegations of misappropriation of client payments.
It is understood that the insurance agents involved are no longer with the company.
Gibraltar BSN is a joint venture (JV) between the American-based Prudential Financial, Inc (PFI) and Bank Simpanan Nasional (BSN), a statutory body under the Finance Ministry.
PFI has a 70% stake in the JV, with BSN holding the remaining 30% interest.
Gibraltar BSN did not respond to StarBizWeek queries on whether it had or is being investigated by the authorities and whether there had been any action taken against it so far but said that there has been a change in top management of the company in recent months.
Vincent Kwo Shih Kang, the former CEO, for instance, had been replaced by Tim Oommen Thomas in June.
In its reply to StarBizWeek, the company says Kwo “decided to step down from his position as the CEO citing personal reasons”.
It is also understood that besides Kwo, who was Gibraltar BSN CEO from 2011 until June, there were also movements among other senior management personnel this year, including the appointment of chief operations officer Chua Kim Soon, believed to be formerly from ACE Jerneh Insurance Bhd, and new chief financial officer Lee Kok Wah.
In its reply, Gibraltar BSN says:“In recent months, Gibraltar BSN has significantly strengthened its management team with the appointment of high calibre leaders from the insurance industry to help the company drive its next phase of growth in Malaysia.
“With its strong leadership team, the company developed a transformation strategy to expand Gibraltar BSN’s presence in Malaysia.”
The company says this transformation strategy is underway and has “significantly strengthened the core foundations and operational platforms of the business aligning itself to PFI’s standards and best practices.”
Gibraltar BSN, in its reply, also says Thomas had joined PFI in 2011 “to strengthen PFI’s presence and drive its South-East Asia strategy.”
He was also instrumental in the acquisition of Uni.Asia Life Assurance and the setting up of the joint-venture partnership with BSN, it says.
As part of the transformation strategy, Gibraltar BSN recently launched its Employee Value Proposition programme to attract and retain talent, as well as to “engage the current workforce to sustain further growth for the company.”
The firm also aims to become what it calls a model “Community Insurer” in Malaysia, which refers to it reaching parts of the community that historically has not had access to financial solutions. It is doing this via its strategic partnerships with BSN and Pos Malaysia.
In its partnership with Pos Malaysia that was sealed earlier this year, for instance, dedicated officers, who are jointly accredited and trained by Gibraltar BSN and Pos Malaysia, are placed at Pos Malaysia outlets to give professional advice on insurance products.
These products are sold at Pos Malaysia branches nationwide.
Previously known as Uni.Asia, the company changed its name to Gibraltar BSN Life in 2014 following a RM518mil acquisition by PFI through its subsidiary, The Prudential Insurance Company of America, and BSN.
According to information on its website, Gibraltar BSN has a network of 11 branches and over 1,000 agents nationwide.
Last year, new business premiums for the life insurance industry in Malaysia grew 1.8% to RM9.12bil, lower than that of the 9.3% achieved in 2014, owing largely to the weak economy which affects demand for such products.
According to CIMB Research, growth of new premiums for the life insurance sector was weak over the period of 2009 to 2014, growing at a compounded annual growth rate of 3.5%.
The research house has projected single-digit growth rates for the entire insurance industry’s new premiums from 2015 to 2016 – at 5%-6% for general insurance and 7%-8% for life insurance.
It notes that growth for life insurance premiums is expected to be relatively faster than the general insurance segment as the former is under-penetrated.
The life insurance penetration rate in Malaysia is currently around 40%, according to reports.
It has been brought to our attention that Vincent Kwo's exit from BSN Gibraltar was something he had planned well ahead with the emergence of a new shareholder in the company.
He has pointed out that it had nothing to do with the fraud that took place that involved one particular ex-agent that left in early 2015.
Kwo said he had decided to step down as chief executive officer in the middle of 2016 after completing his task of integrating the operations to the new shareholder and setting up a new management team . He said he had left to pursue his personal interest and was going to continue serving the industry.
Among the things he was assigned to do was to recruit a chief operation officer, a chief financial officer and setting up a new team subsequently.
Kwo said he has completed the assignment and has left to pursue his personal interest after having served as CEO for various insurance companies in the last 20 years. He is currently served as Deputy President of Malaysia Financial Planning Council.