1. Members Report: MP Insurance Brokers Sdn Bhd
AAA Conference | 24 May 2019
Beijing, China
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 : 56
General Business : 20
Life Business : 14
Reinsurers : 7
Takaful Operators : 13
Retakaful Operators : 2
Number of Insurance Brokers : 29
Insurance Broker (G.I) : 1
Insurance Broker (Composite) : 27
Takaful Broker : 1
How many Insurers
operate in the Country
Market conditions –
Number of Insurers decreasing,
increasing or stable
Effectively stable except the
split in Composite licenses into
life and G.I.

6. AAA Members Report – Malaysia
Market Conditions
Insurance capacity decreasing, increasing, stable
: Stable
Premiums decreasing, increasing, stable
: Decreasing and market is very “soft”
Motor Detariffication +/- 10%
Fire Detariffication /- 30%
Commissions decreasing, increasing, 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
: Decreasing (29 at the moment but due to the M&A of Howden with Malene and Marsh with JLT, we are awaiting the final position with the licenses)
Overall level of Insurance Business
decreasing, increasing, stable
: Slight increase for both G.I.(1.5%) and Life (1.8%)
Percentage of business controlled direct by
: % (G.I.)
Brokers
8.89% (Takaful)
Percentage of business controlled direct by insurers
: % (G.I.)
35.67% (Takaful)
Percentage of business controlled by agencies & other outlets
: 68.91% (G.I.)
55.45% (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 :
None
Economy at time of report :
• The Malaysian economy registered a GDP growth of 4.7% (2018) against 5.8% (2017) • The country’s economy is projected to register 4.5% growth in 2019.
• Domestic demand continues to be the principal driver of growth.
Note :
Slowdown in China, US-China trade conflict, global monetary tightening, oil price swings, cancellation of several billions of Malaysian Ringgit of infrastructure projects, all lends to market volatility.

10. (relative to 1.02% decline 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
2018
2017
2016
2015
Growth / Decline from 2017
Motor
RM8.47 billion
RM8.32 billion
RM8.17 billion
RM8.09 billion
Growth 1.8%
Fire
RM3.51 billion
RM3.41 billion
RM3.27 billion
RM3.10 billion
Growth 2.8%
Medical & Health
RM1.16 billion
RM1.1 billion
RM1.03 billion
RM0.96 billion
Growth 5.2%
MAT
RM1.33 billion
RM1.34 billion
RM1.56 billion
RM1.682 billion
Decline 0.3% PA
RM1.21 billion
RM1.13 billion
RM1.30 billion
RM1.303 billion
Growth 6.9%
Misc (Bonds, Liability, Engineering & WC)
RM2.24 billion
RM2.355 billion
RM2.35 billion
RM2.31 billion
Decline 4.8%
Overall
RM17.92 billion
RM17.65 billion
RM17.67 billion
RM17.48 billion
Growth 1.5%
(relative to 1.02% decline last year)

11. AAA Members Report – Malaysia
Overview of Current Market Conditions (con’t)
THE LIFE INSURANCE ASSOCIATION OF MALAYSIA (LIAM)
In Force Premiums
The total in force premiums grew by 5.7% to reach RM38.8 billion in 2018 as compared with RM36.7 billion in 2017.
January to December
RM Million
2017
2018
Growth
- Traditional
16,775
16,326
-2.7%
- Investment-linked
16,406
18,590
13.3%
- Annuity
610
655
7.4%
- Group
2,929
3,252
11.0%
Total
36,720
38,823
5.7%

12. AAA Members Report – Malaysia
Overview of Current Market Conditions (con’t)
THE LIFE INSURANCE ASSOCIATION OF MALAYSIA (LIAM)
Number of Policies In Force
2018
12.65 million policies
Group policies grew by 2.9%
Type
2017
2018
Difference
Growth
Traditional
7,665,075
7,302,844
(362,231)
-4.7%
Investment-linked
4,884,068
5,229,634
345,566
7.1%
Annuity
96,537
95,334
(1,208)
-1.3%
Group
25,359
(9.6 million lives)
26,098
(10.1 million lives)
739
2.9%
TOTAL
12,671,039
12,653,910
(17,129)
-0.1%

13. AAA Members Report – Malaysia
Overview of Current Market Conditions (con’t)
THE LIFE INSURANCE ASSOCIATION OF MALAYSIA (LIAM)
New Business – Total Premiums
New business total premium grew by 1.8% in 2018 amounting to RM10.3 billion as compared to 10.1 billion in 2017.
Total Premiums
January to December
RM million
2017
2018
Growth
Individual
- Traditional
2,227
2,305
3.5%
- Investment-linked
4,652
4,451
-4.3%
Group
3,240
3,545
9.4%
Total
10,119
10,301
1.8%

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
As at 25 February 2019, the industry launched 48 new Motor
and 46 new Fire Products in the market 13

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.
For 2018, there was a slight growth of 1.5%. One of the reasons is the spike in motor premiums due increase in motor vehicle sales boosted by the tax holiday.
However for 2019/20, we anticipate drop in overall G.I. premiums by about 3/5% in 2019/20 as the effects of the de-tarrification flows through. So, the insurance broking earnings will likely fall in the same proportion.
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 and will continue to progress.
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.