Detariffication of motor insurancePOSTED BY Yamin Vong ON 23 May 2017
What is motor insurance detariffication?
Essentially, it is a system introduced to facilitate healthy competition amongst insurance providers in selling comprehensive motor insurance. Malaysians are expected to approve the introduction if it leads to:
- COMPETITIVE PRICING,
- GUARANTEED CLAIMS APPROVAL
- BEST TURNAROUND TIMES FOR CLAIMS APPROVAL
According to a Paultan.org survey commissioned by AIG Malaysia, consumers in Malaysia want insurance plans that are competitively priced, have a guarantee of being approved as well as good approval turnaround time on claims once motor insurance has been liberalised.
The survey, which polled some 4,400 respondents above the age of 18, showed that 89% of people preferred competitive pricing for their motor insurance purchase.
Besides competitive pricing, 70% wanted guaranteed claims approval within three business days for claims below RM5,000. Some 60% of those surveyed also preferred a settlement within 60 days for vehicle claims in the event of a stolen car not being recovered.
Additionally, 64% of respondents wanted discounts and rewards for being loyal customers while 55% opted for flexibility to customise their motor insurance plans.
Prior to making a decision of purchasing motor insurance, 86% said they would research on what insurance providers would offer, while 16% would go for insurers with the most advanced technologies and innovation. Another 69% would choose insurers that reward good driving behavior and 39%of respondents would go for insurance companies with the best reputation.
The survey was a joint effort by AIG Malaysia, a subsidiary of American International Group and Malaysia’s top automotive website, Paultan.org,and was previously posted on its website Motor insurance liberalisation: how will it affect you?
AIG Malaysia’s chief executive officer Antony Lee said, “This survey has displayed the true picture of customers’ expectations and knowledge about motor insurance, and the factors that make customers tick.”
“We are constantly committed to fulfilling our promise to offer the best claims turnaround time to our customers. This is clearly exemplified in AIG Malaysia being awarded the Best Insurer 2016 for best turnaround time for claims, a recognition that we have been receiving since 2011,” Lee added.
The survey also found that 42% of respondents were aware motor insurance in Malaysia was based on a government-standardised rate, while a whopping 83% were aware that motor insurance liberalisation would have an impact on their motor insurance renewal.
Besides that, the survey found that 24% preferred to purchase their motor insurance online, while the majority at 66% liked the more traditional channels, including dealing with an agent or visiting insurance providers’ branches.
Lee said, “The impending liberalisation of the motor insurance market will bring new opportunities and challenges. It will be an incredibly open and competitive marketplace, where customers can shop around for the best deals, an attractive motor insurance premium, or the best insurance coverage for their prized cars. Insurers will need to highlight their unique strengths such as their claims capabilities to stay ahead of the curve.”
Bank Negara Malaysia first announced the New Motor Cover Framework in 2011, with premiums to be revised gradually from January 2012.
On July 1, the second phase of the motor insurance liberalisation would begin, where insurance companies would be able to offer add-ons and product extensions. The first phase was implemented on July1 last year.