Chartis Vice President, Mr Wong Fu-tat, said at a press conference that as the incident was a special case, “the level of compensation for victims has been doubled from HK$500,000 to HK$1 million, under insurance covering accidents caused by public transport”. The insurer will also help with the cost of bringing the remains of the dead to Hong Kong.

Mr Wong adds that the injured stand to receive up to HK$1 million in medical insurance benefits. Chartis will also provide them with cover of up to HK$100,000 for six months of follow-up medical treatment in Hong Kong.

Separately, the Manila Bulletin newspaper reports that the victims of the hostage-taking crisis will receive insurance benefits from the Passenger Accident Management and Insurance (PAMI) Agency as the bus that carried the tourists is insured by the agency.

Land Transportation Franchising and Regulatory Board (LTFRB) officer-in-charge Assistant Secretary, Dante Lantin, said: “The families of the dead victims of the hostage are entitled to at least PHP60,000 (US$1,318) insurance claims each. As for the injured passengers, PAMI has committed to shoulder part of their hospital expenses,” he said. Apart from the eight Hong Kong tourists killed, the hostage-taker himself, former police officer Rolando Mendoza, was shot dead. At least seven others were injured in the incident.

It is the highest fine levied on a single firm for data security failings.

Margaret Cole, the FSA’s director of enforcement and financial crime, said: “Zurich UK let its customers down badly.”

Stephen Lewis, chief executive of Zurich UK, said: “This incident was unacceptable.”

The data on policyholders, including in some cases bank account and credit card information, went missing in August 2008.

However, Zurich did not become aware of the loss until a year later, when it then began notifying customers.

The information went missing during a routine transfer to a data storage centre in South Africa.

‘Oblivious’

The FSA said in a statement: “Zurich UK failed to take reasonable care to ensure it had effective systems and controls to manage the risks relating to the security of customer data resulting from the outsourcing arrangement.

“The firm also failed to ensure that it had effective systems and controls to prevent the lost data being used for financial crime.”

Margaret Cole added that Zurich “failed to oversee the outsourcing arrangement effectively and did not have full control over the data being processed by Zurich SA”.

“To make matters worse, Zurich UK was oblivious to the data loss incident until a year later.

“Firms across the financial sector would do well to look at the details of this case and learn from the mistakes that Zurich UK made,” she said.

Zurich said that it had no evidence the data had been misused. The firm said it had introduced new security measures, and had appointed a dedicated information security officer.

Mr Lewis said that the incident “served to remind us of the need to strive continually to improve the ways in which we seek to protect customers’ data”.

As Zurich agreed to settle at an early stage of the investigation the firm’s fine was reduced by 30%. Without this discount the fine would have been £3.25m.

Encryption

Experts said the size of the fine sends a signal that the authorities will crack down hard on data loss.

Rupert Casey, partner at Macfarlanes law firm, said companies and organisations had previously failed to take data loss seriously.

“That stemmed from the fact that data protection law never had any bite to it. That has all changed.

“What this fine should do is drive the issue up the agenda,” he said.

Better encryption of data, password protection, and measures to ensure large files cannot be downloaded to devices like memory sticks must all be improved, he said.

The FSA has previously fined HSBC, Nationwide and Norwich Union for data loss.

Prior to joining Chartis Malaysia, Mr Harris was Chief Executive Officer of Chartis New Zealand, where he led a large team and was responsible for designing and implementing a co-ordinated business strategy across multiple operating divisions and support functions.

Mr Harris has more than 20 years experience in general insurance during which time he has worked in various operational disciplines including underwriting, product, actuarial, reinsurance, claims and risk/governance functions. He gained this wide-ranging experience working for major insurers in Australia, New Zealand, India and the United Kingdom. He is a senior associate member of the Australian and New Zealand Institute of Insurance and Finance.

Chartis Malaysia Insurance Berhad is a leading property-casualty and general insurance provider in the country. It has 15 offices nationwide, offering insurance services to businesses and consumers via a network of more than 3,000 professional agents, brokers and staff.

Chartis is a worldwide leader in property-casualty and general insurance. Chartis Companies employ more than 34,000 people worldwide and serve more than 40 million business and individual customers in 160 countries and jurisdictions on every continent. In 2009, Chartis companies wrote gross premiums of over US$40-billion worldwide and the company paid out an average of US$75 million worldwide in claims everyday.

From next year, the limit of bank deposits insured by Malaysia Deposit Insurance (PIDM) will be raised to RM250,000 per depositor per member bank from RM60,000 now.

Prime Minister Datuk Seri Najib Razak also announced yesterday a plan to introduce an explicit insurance compensation scheme (ICS) for insurance and takaful policyholders.

According to the Finance Ministry, it is the Prime Minister’s intention to implement a package of legislative initiatives aimed at enhancing financial consumer protection for Malaysians.

“The plan is for this package to be tabled in Parliament for debate and enactment before year-end,” the Finance Ministry said.

With the ICS, policyholders of insurance and takaful products will also enjoy a similar level of consumer protection provided by PIDM for depositors in the commercial and Islamic banks.

Since the temporary government deposit guarantee would lapse as scheduled at the end of this year, the enhanced protection package would continue to provide increased protection to depositors.

“With this new limit, 99 per cent of depositors will be protected in full,” the ministry said.

Chief executive officer of PIDM Jean Pierre Sabourin said at a media briefing in Kuala Lumpur said the RM250,000 limit was proposed based on a survey of member banks and took into consideration the expected growing wealth of Malaysians in the years ahead.

He said PIDM will be issuing the new deposit insurance information regulations to be effective in January 2011.

“The purpose of the regulations is to ensure depositors receive accurate, relevant and timely information on deposit insurance, limits and coverage,” he said.

On the ICS, Sabourin said the scheme is to protect policyholders from the loss of their policy claims or insured benefits in the unlikely event of a failure of an insurance or takaful company.

He said the establishment of the ICS was timely since the insurance has an important economic role.

Like in the Deposit Insurance System, PIDM will also collect annual levies or premiums from member insurance companies but it may also borrow or raise funds from the capital markets.

Allianz Shield is devised to cover among others, medical expenses that include dengue, malaria or Japanese Encephalitis, bungee jumping, amateur sports (except martial arts and boxing), natural disasters, scuba diving (up to 50 metres deep), kidnap coverage, evacuation programme, snatch theft and more.

Via Business Times.

Last month, both Bank Negara Malaysia and the General Insurance Association of Malaysia (Piam) endorsed Insurance Services Malaysia’s automotive business intelligence system (ISM-ABI).

The ISM-ABI is the only approved system for vehicle valuation among financial services companies in Malaysia.

“The introduction of the new system for motor insurance is in line with practices in other developed markets,” said ISM chief executive officer Carl Rajendram in Petaling Jaya yesterday.

Rajendram said that most major motor insurers and takaful operators are in the process of adopting the new and more transparent system for motor insurance starting 2010.

“It is part of the modernisation of Malaysia’s motor insurance and takaful cover announced recently and will ultimately benefit the consumers, insurance and takaful companies,” Rajendram said.

“The entire automotive industry is moving towards greater competitiveness and efficiency and we are confident that the ISM-ABI will play a pivotal role in driving this objective among all stakeholders,” he explained.

With the new service from ISM, insurance and takaful companies now have the ability to generate renewal notices with the current year sum insured with the corresponding premium to be paid.

“The services increase transparency in the whole motor insurance process not only for purchasing insurance but also during claims,” Rajendram said.

With the new system from ISM, insurers and takaful operators may also choose to pre-determine the compensation upon theft and total loss claims by referencing the database.

“Consumers are also able to verify the vehicle’s market value themselves from the website and access the same information that insurers are accessing,” he said.

The new service will reduce uncertainty when insuring a vehicle and reduce dissatisfaction that consumers experience when making a claim.

Kurnia Insurans (Malaysia) Bhd managing director and chief executive officer (CEO) Captain K.H. Chia has resigned, after just 17 months on the job.

Chia told Business Times that he had tendered his resignation, which will be effective at the end of this month.

Kurnia Asia, which owns the country’s number one motor insurer, has not decided who will take over from Chia.

His departure followed the resignation of Datuk Adrian Loh from the board of Kurnia Asia Bhd which was announced on Bursa Malaysia’s website yesterday. Chia took over the post of Kurnia Insurans CEO from Loh on July 1 2008.

“My resignation is on my own accord. It’s a new year and I want to pursue my own aspirations,” he said. Chia hinted that his next move might be in the life insurance segment.

The 30-year veteran of the insurance industry started as a life insurance agent and was previously the CEO of Citic-Prudential in China.

A company insider said Chia had indicated that he wanted to move back to China.

“Chia had mentioned his intention to resign about two months ago. So it was no surprise that his decision to step down was made known to the senior management team on Monday,” the source told Business Times.

Chia was said to have made up his mind to join the Kurnia group after talking to Tan Sri Kua Sian Kooi, who is the chairman of both Kurnia Asia and Kurnia Insurans.

“Our relationship remains on good terms,” Chia said.

He was responsible for hauling Kurnia Insurans, which accounts for nearly 95 per cent of Kurnia Asia’s annual revenue, out of the red.

Under Chia’s leadership, Kurnia successfully launched the Transformation of Operations and Performance exercise in July 2007. The group has since turned around, with a net profit of RM57.1 million in the financial year ended June 30 2009 from a net loss of RM301.8 million in 2008.

Chief executive officer Rob Ryan said the company is strengthening its agency force, expanding its branch footprint nationwide and introducing various diversified products to boost its performance next year.

For the financial year ending December 31 2009, Ryan expects growth to remain flat compared with last year.

Gross written premiums rose 8.2 per cent to RM479 million in 2008 from RM442.6 million in 2007.
As of November 2009, Chartis Malaysia has recorded RM400 million in gross premiums.

The general insurer, represented by some 2,800 agents, which contributes about 54 per cent to its turnover, wants to increase its intake to 3,000 agents in the coming year.

“Our focus for 2010 will be targeted more on the small business sector, which is the backbone of the Malaysian economy. This is where we want to increase our presence,” Ryan told newsmen at Chartis brand launch in Kuala Lumpur yesterday.

He said Chartis plans to offer package policy for fire and liability for the small business community primarily through its agency force.

“We are also looking to expand our household contents insurance, the country’s penetration in this segment is only at about 5 per cent,” he said.

Another new product Chartis has recently introduced is the aviation insurance, which Ryan claims the company is the first locally incorporated insurer to offer directly in the country.

Ryan said as the operations and the team in Malaysia is getting stronger, Chartis will be opening at least three new branches in 2010.

Following the new branch to be launched in Klang, Selangor, on December 21, the insurer is planning to open another office in Sungai Petani, Kedah, in the first quarter of next year.

“We are also looking to open another office in Seremban, Negeri Sembilan, and at least one more in the East Coast next year,” he added.

Chartis is optimistic on Malaysia’s insurance prospects and is keen to continue investing in the country.

“We want to double our business here in the next five years,” Ryan said.

In the pipeline, Chartis is planning to set up a regional processing centre for Southeast Asia that would create 1,500 jobs

“The plan is to expand that globally,” said Chartis Southeast Asia’s regional president Leslie Mouat without disclosing the budget.

The proposed centre will initially be set up in Technology Park Malaysia in Bukit Jalil, Kuala Lumpur, and will eventually move to a bigger site in Cyberjaya, Selangor.

The Chartis name took effect on December 7 this year and is part of a worldwide roll out of the brand to harmonise and provide a consistent look and feel for the company’s operating business.

Chartis Malaysia, with a capital of over RM310 million, is above the 130 per cent minimum capital adequacy ratio required by the Bank Negara Malaysia.

“With the opening of MHinsure to travellers in Malaysia, Singapore and Australia, we are confident we will see more than 70 per cent growth in premium sales by end of next year,” said Muzzaffar Othman, MAS Senior General Manager in the Managing Director’s Office.

He said the national carrier’s plan is to expand MHinsure to other markets in the near future.

Since the launch of MHinsure in Malaysia last year, about 25 per cent of Malaysia Airlines’ passengers have bought the travel insurance online.

Now travellers, whether flying with Malaysia Airlines or other airlines, can buy MHinsure at www.malaysiaairlines.com, it said in a statement.

Passengers travelling with the national carrier will have an option to buy the insurance with the air ticket, while other customers can just proceed straight to the MHinsure section, it said.

“In Malaysia, the basic plan rate starts from RM15 for domestic travel, RM23 to Asean and RM40 for other international destinations for a five-day trip. Besides the normal coverage, our customers can get access to 24-hour Emergency Medical and Travel Assistance,” said Muzzaffar.

The airline said the growth of MHinsure will be expedited by the completion of various website initiatives such as speed and payment getaway enhancements.

The number of monthly website visitors has since increased to 40 per cent while internet sales have grown from some 30,000 to about 150,000 bookings compared to last year, it said.

MHinsure is designed to offer quality and extensive coverage at an affordable price with a comprehensive 24-hour worldwide assistance.

The insurance covers medical expenses, cancellations, baggage losses, delays and other travel disruptions.

MHinsure is available online at www.malaysiaairlines.com. In Malaysia, the insurance can also be purchased by calling the MHinsure Sales at 1-800-806-376, MAS Call Centre at 1-300-88-3000 or MAS ticketing offices at KLIA, KL Sentral and Subang Skypark.

KUALA LUMPUR — Public-private partnerships between the government and insurance players will be essential in providing suitable insurance schemes and developing risk mitigating mechanisms particularly when facing catastrophies, says Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz. With the increasing catastrophies that have been associated with global climate change and pandemics, such partnerships will be important when coping up with the resulting losses.

“According to a recent study, economic losses caused by natural and man-made catastrophes around the world in 2008 amounted to US$269 billion. “Asia accounted for the top five worst catastrophes in terms of fatalities in 2008. The recent natural disasters in Southeast Asia and the Pacific Islands also resulted in major destruction,” she said in her keynote address before officiating the 21st Federation of Afro-Asian Insurance and Reinsurance Conference 2009 here Tuesday. Zeti said greater collaborative efforts among industry players in the region in the form of technical assistance and pooling of resources would increase capacity and expertise to underwrite such risks.

“Through such collaboration, the ability for the insurance industry to underwrite and reinsure risks based on the requirements of the region can be significantly enhanced,” she added. While several of the advanced economies would continue to be weighed down by weak growth as the slow process of financial resolution continues and the high unemployment delays the recovery process, emerging economies, in general, and Asia in particular, have shown a high degree of resilience, Zeti said.

“While the emerging economies are expected to lead the recovery process, there needs to be a reassessment of the strategies for future growth. Over reliance on export orientation to the traditional markets would increase the vulnerability to external developments,” she added. Going forward, emerging economies now need to achieve a greater balance between external-oriented development strategies and the strengthening of their domestic demand, said the central bank governor.

Zeti said the evolving trends and encouraging growth prospects in respective regions present tremendous opportunities for the insurance and reinsurance industry. She said the overall aggregate financial position of insurers in the crisis affected countries have continued to be strong, and generally not severely affected by liquidity pressures or exposures in the credit derivatives markets.

Earlier losses by insurers in financial market activities had resulted in a shift to “back-to-basics” models, focusing on core underwriting business instead of heavily relying on investments as the main source of earnings. The industry had also benefited from the subsequent upturn in the pricing cycle which has fortified the capital position of insurers and provided the support to maintaining sound underwriting standards. Zeti said these conditions have placed the industry on a much stronger position to withstand the challenges from the current global financial turmoil. She said prospects for higher insurance penetration rate in the region continued to remain positive.

In 2008, insurance premiums accounted for 5.95 per cent of gross domestic product (GDP) in Asia and 3.57 per cent of GDP in Africa compared to 7.29 per cent in America and 7.46 per cent in Europe. She said the changing priorities of the growing population in the region, largely comprising a young workforce in the middle income group, have also enhanced the demand for investment-linked and wealth management products.