1. Members Report: MP Insurance Brokers Sdn Bhd
AAA Conference | 17 May 2018
Auckland, New Zealand
Members Report: MP Insurance Brokers Sdn Bhd

2. AAA Members Report – Malaysia
Country : Malaysia
Name of Member : MP Insurance Brokers Sdn Bhd
Membership details (update)
Annual Premium Turnover : RM 43 million
Number of Staff : 20
Location : 25-3 & 25-5, The Boulevard Office,
Lingkaran Syed Putra, Mid Valley City,
59200 Kuala Lumpur
Countries of Operation : Malaysia

3. AAA Members Report – Malaysia
Professional Indemnity Details (update)
Limit of Indemnity : RM10 million
Legislative Requirements : Financial Services Act 2013/Islamic
Financial Services Act 2013
Insurers : Pacific Insurance Berhad with Markel

4. AAA Members Report – Malaysia
Who regulates Insurance Brokers : Bank Negara Malaysia (Central Bank)
in the country
What Insurance Broker and Agent : Basic Certificate Course in Insurance & Takaful
Education Programs exists Broking (BCCITB) required for new entrants
Continuous Professional Development with
minimum 20 hours annually

5. AAA Members Report – Malaysia
Number of Insurers : 55
Life & General Business : 4
(Composite)
General Business : 19
Life Business : 10
Reinsurers : 7
Takaful Operators : 11
Retakaful Operators : 4
Number of Insurance Brokers : 30
Insurance Broker (G.I) : 1
Insurance Broker (Composite) : 28
Takaful Broker : 1
How many Insurers
operate in the Country
New Insurer : Danajamin
Nasional Berhad (Financial
Guarantee Insurer)
Market conditions –
Number of Insurers decreasing,
increasing or stable

6. AAA Members Report – Malaysia
Market Conditions
Insurance capacity decreasing, increasing, stable
: Increasing but Lloyds did not secure
Tier 1 license
Premiums decreasing, increasing, stable
: Decreasing and market is very “soft”
Motor Detariffication +/- 10%
Fire Detariffication /- 30%
Commissions decreasing, increasing, stable
: Stable
Average Broker income percentage earned as fees
: 15% Non-Motor & Employee Benefits
10% Motor and Employee Benefits

7. AAA Members Report – Malaysia
Number of Brokers decreasing, increasing, stable
: Stable (30 brokers licenses as per last year)
Overall level of Insurance Business decreasing, increasing, stable
: Decreasing due to de-tariffication of Motor & Fire
Percentage of business controlled direct by Brokers
: % (G.I.)
11.07% (Takaful)
Percentage of business controlled direct by insurers
: % (G.I.)
38.00% (Takaful)
Percentage of business controlled by agencies & other outlets
: 68.49% (G.I.)
50.94% (Takaful)

8. AAA Members Report – Malaysia
Information Technology used by Brokers (including Internet)
: Equal Insurance Broking System
Locally developed broking software

9. AAA Members Report – Malaysia
Political issues at time of report :
14th General Election May 9th 2018
Economy at time of report :
• The Malaysian economy registered a GDP growth of 5.8% (2017) against 4.2% (2016) • The country’s economy is projected to register 5.0% - 5.5% growth in 2018.
• Domestic demand continues to be the principal driver of growth. • Private investment growth is expected to expand over 7.0% in 2018.
• Domestic Demand projected to grow at 5.2% in 2018
Contributing Factors : Projects MRT2, ECRL, Pan Borneo Highway, Menara Warison etc.

10. (relative to 1.1% last year)
AAA Members Report – Malaysia
Member’s view of Insurance Broking over the next three years:
Overview of Current Market Conditions
THE GENERAL INSURANCE ASSOCIATION OF MALAYSIA (PIAM)
Gross Written Premium
2017
2016
2015
Growth / Decline from 2016
Motor
RM8.32 billion
RM8.17 billion
RM8.09 billion
Growth 1.9%
Fire
RM3.41 billion
RM3.27 billion
RM3.10 billion
Growth 4.2%
Medical & Health
RM1.1 billion
RM1.03 billion
RM0.96 billion
Growth 6.6%
MAT
RM1.34 billion
RM1.56 billion
RM1.682 billion
Decline 7.0% PA
RM1.13 billion
RM1.30 billion
RM1.303 billion
Decline 12.6%
Misc (Bonds, Liability, Engineering & WC)
RM2.355 billion
RM2.35 billion
RM2.31 billion
Growth 0.2%
Overall
RM17.65 billion
RM17.67 billion
RM17.48 billion
Flat or (0.02%Decline)
(relative to 1.1% last year)

11. AAA Members Report – Malaysia
Overview of Current Market Conditions (con’t)
THE LIFE INSURANCE ASSOCIATION OF MALAYSIA (LIAM)
SUM ASSURED
NUMBER OF POLICIES
Type
2015
2016
Difference
Growth
Traditional
345,955,466,648
341,442,701,192
(4,512,765,456)
-1.3%
Investment-linked
376,173,903,116
440,278,367,250
64,104,464,134
17.0%
Group
515,492,186,004
518,115,555,078
2,623,369,074
0.5%
TOTAL
1,237,621,555,768
1,299,836,623,520
62,215,067,752
5.0%
Type
2015
2016
Difference
Growth
Traditional
8,217,633
8,003,614
(214,019)
-2.6%
Investment-linked
4,215,701
4,533,941
318,240
7.5%
Annuity
95,169
96,147
978
1.0%
TOTAL
12,528,503
12,633,702
105,199
0.8%

12. AAA Members Report – Malaysia
Overview of Current Market Conditions (con’t)
THE LIFE INSURANCE ASSOCIATION OF MALAYSIA (LIAM)
NEW BUSINESS – ANNUAL PREMIUM EQUIVALENT
On new business total premium basis, the industry grew 6.9% in 2016 with total premium volume recording RM9.75 billion
Note :
Life Insurance & Family Takaful Framework (Effective 23/11/2015) – Transformation
Process Government’s aspiration to have 75% of population insured by 2020
Annual Premium Equivalent
January to December
RM million
2015
2016
GROWTH
Individual
- Traditional
1,909
2,290
20.0%
- Investment-linked
2,640
3,074
16.4%
Group
366
348
-4.8%
Individual + Group
4,914
5,713
16.2%

13. AAA Members Report – Malaysia
Overview of Current Market Conditions (con’t)
THE MALAYSIAN TAKAFUL ASSOCIATION (MTA)
Insurers entering the micro-takaful market and the liberalisation of commission structures in the life insurance sector are the biggest drivers.
In 2016, key regulatory measures for takaful were introduced to promote a more rigorous process for capital management.
Two policy documents were issued on Internal Capital Adequacy Assessment Process (ICAAP) and Stress Testing for takaful operators. These measures aim to strengthen capital adequacy assessment and risk management whereby takaful operators are expected to establish internal capital level targets and assess their overall capital adequacy and ability to meet future claims.
2015
2016
GROWTH
Moderate growth for
Gross Contributions Motor Takaful
RM1.42 b
RM1.46 b
2.3%
Single digit growth for
Gross Contributions Non-Motor Takaful
RM0.88 b
RM0.95 b
8.6%

14. AAA Members Report – Malaysia
Phased Liberalisation of Motor and Fire Classes
Implementation Dates
Motor Class
Fire Class
1st July 2017
Premiums +/- 10%
Expanded Scope of Coverage
To-date 31 New Motor Products launched
Premiums +/- 30%
Selected Occupation
To-date 26 New Fire Products launched

15. AAA Members Report – Malaysia
INSURANCE MARKET in Next 3 years
De-tariffication (Motor and Fire)
The phased liberalisation plans will continue to feature and revenues and margins will erode further. At the moment the motor is not showing too much fluctuation in premiums as the Bank Negara parameters stipulate a +/- 10% margin on motor pricing. However, the Fire classes will likely register a much bigger gap as starting point for most insurers average at a 25% to 30% reduction with package policies.
Due to this, we are anticipating a drop in overall G.I. premiums by about 5% to 6% in 2018/19. So, the insurance broking earnings will likely fall in the same proportion.
ASEAN Community
There is still not much clarity as to the actual impact of this initiative although the 7th Package of Commitments under the ASEAN Framework Agreement on Services included the commitment by Malaysia to liberalise the cross-border supply of marine aviation and transit insurance and insurance broking services since 20 December 2016
Digital Platforms and New Distribution Channels
2017 was reflective of a landmark year for digital transformation particularly for claims processes and back end support functions.
Insuretech and aggregators will likely surface in a more definitive format and erode market share from some of the channels.

16. AAA Members Report – Malaysia
Any major issues to be resolved
: No
Member’s principle activities over last
: Continue to develop and build team
year
expertise in focus areas such as Financial
Lines, Employee Benefits
Member’s planned activities over the coming year
: Continue with our focus in Financial Lines,
Employee Benefits and Digital offering.