1 PRESENTATION ON MODULE 3 From Malaysia PRESENTATION ON MODULE 3 From Malaysia

2 QUESTION NO. 1  Malaysia is geographically a natural disaster free country/ we are away from the earthquake zone  However, we did experienced natural disasters such as flood and storms but on a small scale.

3 QUESTION NO. 2  There was no available statistics on insured economic losses due to the minimal exposure on natural disasters  However, most of commercial properties and about 25% of private properties in Malaysia were insured against natural disaster.

4 QUESTION NO. 3  The retention on general cat XOL cover had been stable for the last 5 years.

5 QUESTION NO. 4  The current retentions were adequate, because at most the retention were pegged at 2% of shareholders fund.  In general, the insurance company in Malaysia were risk average.

6 QUESTION NO. 5  Yes, the rates were tariff rated.  These rates were computed based on data provided by the industry.

7 QUESTION NO. 6  Government relief disaster fund  Risk transfer – by reinsurance  Compulsory cat pool.

8 PROS  Easily available fund in case of natural disaster.  Mitigate losses.  To minimize long economic disruptions

9 CONS  Over reliance on government subsidy & limit government fund for development.  Increase in premium will increase in cost of good sold & as a result our product become less competitive  Public have to bear the cost of the fund.