Many pro-democrats (e.g. Codeblue editor) like to give unrealistic advices, like give NCB for medical insurance, or prevention, or DRG. Even on Linkedin, many people (including "industry expert") still think medical insurance from the point of motor insurance, ignore the fact that most medical insurance are sold as ILP, and those non-ILP are supposedly have increasing premium (i.e. from age 50 to age 51, you are paying for premium as you getting older, and extra 1 year of medical inflation, note BNM doesn't not cap the premium increase as you age.).

NCB or early prevention (e.g. AIA vitality) all will come with extra cost. When government now capping the premium (i.e. profit), who will spend extra cost on these? Personally I foresee in 2025, GL issuance will be a lot stricter, insurer/TPA ground staff onsite to monitor hospitals etc. Some procedure claims will be rejected, say unnecessary scanning or blood test. Deposit for admission (charged by hospital) will increase.

Surprised how fast people "forget" things. In early 2010s, there are a lot medical frauds, where policyholders by intention, admit to hospital, say for stomach ache, stay for 1 week, to claim for cash allowance (can up to RM800/day). Even agents publicly promoted this unethical practice.

There is new capital regulation in 2026, where in general, more capital is required, but you are allowed to recognize future profit (i.e. negative reserve) as capital. As ILP is profitable by its design (not because of medical rider), whether can recognize 50% of 100% as capital will change the ILP market in Malaysia.

*only Malaysia and Indonesia (and a bit in India), sell ILP that we all familiar with in the life insurance. Other markets, say China, Singapore, or UK, the ILP can be very different. Blindly refer to introduction or Pros/Cons of ILP from other markets is just plain ignorance.

To be fair, insurers can cap the GL (guarantee letter), more strict on claims, e.g. only approve a RM5000 bill, based on prior experience, instead of always increase the GL amount. Of course, this will increase operational cost, increase complains etc, but what to do.

Inflation is inevitable, and certain sector is understandable will have higher than average inflation. It is a lot better to not price in inflation in everything (not just medical insurance), and hence medical repricing itself is inevitable. It is really just common practice everywhere in the world.

too many uncertainties on medical repricing and capital standard where management probably prefer to retain more profit.

Based on data, as of today, Allianz probably has the worst medical loss ratio among big 4 life insurers. However, Allianz also has youngest average policyholder age. Note that BNM restricted repricing for age 60+, but actually allowed 10% increase (for 80% policyholders) and 10+% for the rest. Short term impact, if Allianz always go for maximum allowable increase, is minimal for Allianz. BNM and MOF completely kowtow to politicians during this medical repricing drama.

The key impact on Allianz future earning is still the new regulation, a decision on whether 50% or 100% negative reserve as capital available, that could make a significant impact on Allianz future growth, but that will be 2026 onwards.

Could be average, or lower, due to repricing cap, and upcoming new capital requirements

received notification about medical repricing again. probably a good year ahead for Allianz.

Maybank is said to weigh options for insurer Etiqa, value @ around $4billion, ~RM 17.6bil, more than double of Allianz current market cap.

I compared AIA MY and Allianz MY NB growth, Allianz is marginally higher than AIA for 2023 vs 2022, and 2023 vs 2019. Anyways AIA HK covers too many markets, and hard to put value on them, vs Allianz MY is a lot more simple.

Allianz is currently priced at around 1x BV for GI, and 1x CSM + NAV for Life.
PBB is offering to takeover LPI @ ~1.74x BV.
In Singapore, Allianz offers to takeover NTUC @ 100% EV (failed), GE offers to privatise @ ~70% EV (not going well).
Regionally, Prudential and AIA are still trading at near record low, and FWD IPO still keep delaying due to weak market sentiment.
If GI is fully priced (based on Lonpac 1.74x), share price should be ~28.
If both Life and GI is fully priced (based on pre-covid era, life insurance valuation), share price should be ~40.

Allianz FY2023 total expense is ~650mil, while PBT is 957mil. I understand that Allianz is currently undergoing some cost saving measure, say if materialise, a 10% cut in expense, can increase PBT by 6.8%.

Immediate catalyst will depend on Anwar's healthcare reform.
Currently, Malaysia healthcare expenditure is ~50bil, of which 17% by private insurance (~8.5bil).
Allianz has ~1.5-2bil/yearly (and rising, with loss ratio ~80-90%) in medical premium/COI alone (>17% market share).
Anwar is pushing for rakan-KKM/FPP in government hospital, and supposedly in his ideal world, only B40 can enjoy RM1 healthcare, in the crowded government hospital. M40 can go for full pay gov hospital, and T20 can go private hospital. A lot room for medical insurance, if Anwar's plan success, of course, at the expenses of rakyat, and make greedy private investors richer.

Expert Foresees ‘Full Privatisation’ Of MOH’s FPP Service

Allianz's proposed acquisition of a 51% stake in Singapore's Income Insurance for US$1.6bn has been called off after the Singapore government intervened, stating the merger "would not be in the public interest."

Comments on AMIB report:
i. mandatory coinsurance, on long term, is good for everyone (except private hospitals)
ii. market risk charge under RBC2 will be higher, yes, but overall risk charges might not be higher. Also, comparing CAR change from RBC to RBC2 is completely meaningless. There are new risk charges (or new components), but there are also diversification.

Prudential is not the only company that foreign owns 100% via bumi proxy. GE has gotten exemption. AIA has approval from white house, probably no one dare to touch. HLA and Etiqa are local. Allianz/Manulife are listed. Sunlife/MCIS/Generali/FWD/AmMetlife all have local partner. Zurich and Tokio Marine probably still 100% foreigner own, with proxy.

No，Pru plc owns 51% of PAMB. If bumi proxy can just anyhow songlap foreigner share, I think discourage Prudential from growing MY market is the least concern.

Before 1998, Pru plc owned 30% of PAMB, Berjaya owned ~69%. In 1998, Berjaya divested in PAMB, and supposedly sold all ownership back to Pru plc. However due to insurance act 1996, Pru plc cannot, on paper, own 100%, hence the Detik Ria (30% @ 1998) as bumi proxy. Vincent Tan personally also hold 19% of PAMB share at this point, only later (unknown when), sold the 19% to Detik Ria. Pru plc has signed some put and call options on the ownership of Detik Ria (i.e. fixed price) that it will repurchase back the ownership at later time.

Later in ~2017, BNM (or government) started to want to enforce the foreign ownership (now 70%), Pru plc then planned to get back the 49% and then disinvest accordingly. This Tommy, used the excuse that not getting MoF approval, but ignoring that BNM has given the approval. Next time how? listen to who? MoF or BNM?

Who is enforcing the 70%? BNM. From the article, BNM also ok with Pru plc approach, to get back 100% of share, and proceed with disinvestment accordingly. Then suddenly, VT and Tommy, come out with this idea, to songlap Pru plc ownership.

Bcorp now owns 5% of Prudential Malaysia!!! Huat ar

https://theedgemalaysia.com/node/720998

If my understanding is correct, Allianz will loan out its internal staff (under a single entity), as shared service to other BUs, and get to profit from it. A more common way is, shared service will operate as a separated entity (might or might not under local BU, typically not under local BU, but directly under Group).

Allianz already has some existing shared service in Malaysia, but in a very weird arrangement.

Allianz has announced a pre-conditional voluntary cash general offer to acquire at least 51% of the shares of Income Insurance, subject to regulatory approval. Allianz intends to offer $40.58 per share for a total transaction value of approximately $2.2 billion (approximately EUR 1.5 billion) for 51% of the shares in Income Insurance. The offer price represents a premium over Income's NAV of $29.55 per share of 37.3%.

For many white collar office job, you (and maybe your family) already covered by your employer's group insurance. There is no real need for you to have a cashless medical insurance.

Many hoo-ha with co-payment medical insurance recently. Insurers are already moving away from cashless, yet some doctor association/consumer group jump out and said, cashless is better. Many people don't see the point that, the saving in premium, will higher than the deductible in just 2-3 years time. You might need to fork out RM500 or RM1000 for admission, but you save back premium (and hidden commission) in 2-3 years. There is no free lunch, for everyone, but dropping the cashless feature, will introduce a great saving immediately.

New RBC framework just out yesterday, effectively 2027, but will have immediate impact on product mix starting next year.

Income Insurance, Allianz in talks on tie-up, seeking regulatory approval

just a hypothetical number, could be 3x 5x, could also just be 2x.

In fact, in a way yes, for single premium product, there is 0 capital upfront. For ILP (regardless if conventional or takaful), there will be a strain, and a limit of how much can sell at a point.

So, in theory, say if we got 1.4bil population, STMB can immediately sell 45x of MRTA, but Allianz probably can only sell 3x of ILP before being restricted by the capital.

However, this is not meaningful at all. And similarly focus on ROE is not meaningful as well. MRTA is good, profitable business, but in the end, still restricted by how many new house loan by your bank partner.

No right or wrong. But need to know product strategy and maximise bancassurance channel. Etiqa as example, become top 6 purely with bancassurance, but another Tokio Marine, struggle to have meaningful market share with RHB bancassurance. HLA got mix of agency and banca, not sure with the split.

Yes, but less volatile vs pre IFRS17.

Short term, negative impact to capital, might reduce ability to pay dividend etc. Long term, higher yield will have positive impact to future profit.

Diluted NTA is just RM14.85.
While it is possible to reach RM30, probably won't happen in 3 years time. RM25 probably max for this year.

If not mistaken, great eastern adopts a very aggressive method to calculate future profit from medical business, something like always reprice 10% annually hence the Pv profit can become very unrealistic (in my view). However, not sure how the normal retail shareholders view it, since they won't have such info.

筹资跨足电影业
大马保险代理Norman Pang
明年新加坡上市

OCBC takes Great Eastern private @ S$25.60 per share, last traded price of S$18.70, embedded value per share = S$36.59.

Exact % varies by product, but in most case, you will not able to get back any commission paid, and some expenses incurred (typically relatively negligible, except for small ticket size policy).

It could be true that maybe 20% people lapse the contract in first year (in this year), and probably get back less than half of initial premium paid. I don't think it will over 50%, even the most lousy tier 3 insurers also have better persistency. And no, insurers do not profit from this. BNM actually prohibits insurers to profit in this manner. Agents that "profit" from it, even if a whole life ILP only lasts for one year, the first year ~40% commission still need to pay to agents.

technically, yes, you can do that too, but most of the time, after repricing, your total premium will increase, say to 1200 (400 to life, 800 to medical), then to 1600 (400 to life, 1200 to medical) and so on.

Medical insurance by itself (either standalone or rider) is not that profitable (in %) vs other line, e.g. personal accident, life, waiver, CI etc. However, it contributes to the largest absolute amount. e.g. if you have a breakdown of the premium for each components of your investment-linked plan, medical will be > 50% of the total premium.

Unique for medical insurance is the ability to reprice, and higher future profit. Your ILP now could be 40% premium to life (fixed, say 400) and 60% premium to medical. After 10 years, say 3 rounds of repricing, the breakdown could be 400 to life, 1000 to medical. The ability to reprice, essentially also meant, insurers are guaranteed never lost any money in this block of business over the long term.

Essentially, for protection business, insurers will earn a x% of total claims payment. And for Malaysia, medical claims are a lot higher than life claims.

No, there are other loading for commission and expense. Usually commission is fine, since you will incur as you sold, not much variance there, except for outperformance related. Expenses then a different story. Your expense loading might (and usually) insufficient to meet actual expenses. And the 25% margin for medical, is just expected. Medical service will rise by inflation, rapidly. It might be 25% now, then erode to 15% by year end.

The 25% is only cost of insurance, over paid claims. Not including any expenses. Any previous IFRS4 / IFRS17 profit margin is not meaningful.

No, should be just 4th (by NB volume), 5th by IF volume (HLA 4th). Key difference between HLA and Allianz Life is the proportion of investment linked business (most profitable) over total business.

There is a new guideline on medical insurance by BNM yesterday. BNM push for coinsurance (lower premium, higher margin), and mandate that future reprice premium cannot higher than initial profit margin. BNM also push for a centralized data platform for medical claims.

Malaysia don't have rubbish financial products like the US, but we have rubbish politicians. The only remotely possible way Allianz will bankrupt in near future is government/BNM doesn't allow medical repricing. It took the industry quite a while to make general public and BNM understand that repricing is inevitable, but then I don't think Malaysia politicians will really honor what the previous government has agreed upon and can just u-turn anytime, doing anything for the sake of vote. Looking back past 10 years, insurance companies have been force to donate to mysalam, 70% ownership, delay repricing during covid, donation during covid etc, on top of a general prosperity tax in 2022.

you cant fake death or fake critical illness, but very easy to fake hospital admission.

https://money.udn.com/money/story/123742/7696251

660k is your annual limit. 99% of the claims, the amount will not exceed 100k, but the average claims amount will keep increasing. 660k annual limit, or unlimited limit medical card, the actual coverage policyholders entitle for in next 10 years, will have minimal difference.

Nowhere on earth that medical insurance rate is fixed, simply because you will not able to price in all future inflation, hence naturally it will only be short term basis, and will require frequent repricing. Medical insurance margin, in % is actually one of the lowest, and it is a lot harder to manage it vs say death claims.

The first real round of medical repricing started in ~2015/2016. Prior to that, yes, many life insurance operate at a loss on their medical business. Because of that, previously there is no fancy million dollar limit / unlimited coverage, sort of like limit the coverage in order to minimize losses.
After 2015/2016, BNM is more "open" to actuarially sounded medical repricing, and then we started to see fancy medical coverage.

A sense of how medical COI rates exponentially increasing as we age, age 50 COI = 153% of age 40 COI, age 60 COI = 180% of age 50 COI, age 70 COI = 233% of age 60 COI, and all these before medical inflation.
https://www.prudential.com.my/export/sites/prudential-pamb/.galleries/pdf/en/listing/PRUMillion-Med-COI.pdf

Current average age of policyholder for big4 should be ~age40.
Under IFRS4, future margin doesn't include in profit calculation, under IFRS17, a portion of future margin is included in profit calculation.

break 20 tomorrow?
maybe 22 when YE23 results out.

Medical business might be a loss if there is no reprice for a while, but usually will have 20-30% margin upon repricing (reflecting next 2-3 years inflation). e.g. first year after repricing 30% margin, second year 20% margin, third year 10% margin, then another round of repricing again. Margin on medical insurance is the key source of profit for big4 players.

Cost of insurance for medical, will increase over time, as policyholder ages, and due to medical inflation. Assuming nothing will change, the yearly absolute margin from medical business will grow at at least 2x of inflation rate.

Some might say, CSM (PV profit) should already capture all these and current reporting should already reflecting all these, but actually is no. Actuaries will not project medical inflation (~8% p.a.) until end of policy term, as it will give very extremely high number that very hard to explain.