online family takaful in malaysia: going digital way · underwriting system, purchase the plans and...
TRANSCRIPT
1
ONLINE FAMILY TAKAFUL IN MALAYSIA: GOING DIGITAL WAY
By Nurul Azlyna Mohamad Rasidi
CIFP, Bach. of Acc (Hons), CII
THE BACKGROUND
Takaful industry in Malaysia has positioned itself as a trusted and valued solution
provider for many years. The industry has recorded strong growth with almost 18% of
market share in 2018 from 3% a decade ago. With 15 registered operators, Malaysia
currently leads the takaful industry in the region.
Similar to insurance, there are general and family takaful that essentially serve the same
purpose of providing coverage to the participants. This paper however will only
highlight the family takaful in Malaysia.
Offering three types of plans to choose from, family takaful provides financial
protection against death or permanent disability and long-term savings to the
participants. The plans are;
a. Ordinary Family
b. Annuity
c. Investment-linked Takaful
Interestingly, the industry’s performance is considerably outstanding with a new business
grew approximately 10% (year-on-year) in 2018 compared to approximately only 2% for
life insurance.
Family Takaful: New Business Contribution (in RM million, as at)
Source: Bank Negara Malaysia
1,068
1,311 1,321
1,640
2,0111,785
1,8852,069
2,224
2,510
3,254
1H09 1H10 1H11 1H12 1H13 1H14 1H15 1H16 1H17 1H18 1H19
2
FAMILY TAKAFUL: DOING IT DIGITAL WAY
As the takaful industry matures, digitisation and technology adaptation is expected to
change the market landscape. Technology is also expected to pave significant inroads
in providing new solutions and avenues in reaching the consumers.
As stated in KPMG’s Insurtech 10: Trends for 2019
“Mature insurance markets may see the new highly automated insurance platforms
such as those developed in China as a direct challenge and seek to compete with
them. The successful incumbents will likely be the ones who learn from them, adapting
and adopting their tech where appropriate”.
Meanwhile according to EY, “more than 80% of customers are willing to use digital and
remote contact channels (including web chat, email, mobile apps, video or phone) in
place of interacting with insurers via agents or brokers”.
To support the digitalization effort, Bank Negara Malaysia (BNM) has established the Life
Insurance and Family Takaful Framework in 2015 as an initiative to diversify distribution
channels in promoting greater accessibility and wider outreach.
The framework requires the life insurers and family takaful operators to offer pure
protection term products via direct distribution channels including online through their
websites. The online channel allows customers to instantly get quotes via an innovative
underwriting system, purchase the plans and receive immediate coverage; a great
convenience to the customers indeed.
The commission - free standalone pure protection products namely term, critical illness
and medical and health insurance/takaful. Pure protection product would be the
simplest and cheapest form of coverage available to consumers, making it easy for the
operators to curate and offer.
The digital initiative, unsurprisingly, has received positive responses from the customers
based on the higher share of new premiums and contributions incurred by online
channel in 2018. It jumped significantly to 3.2% from 0.6% in 2017, suggesting the
stronger digital presence and encouraging acceptance among customers.
In contrast, the agency channels indicated lower share from 47.4% in 2017 to 41.8% in
2018, marking the downward trend experienced by the traditional channel.
Nevertheless, the agency is still the most preferred channel compared to others.
*However, please take note that the data caters for both life insurance and family
takaful.
3
Life/ Family Takaful New Premium and Contribution (By Distribution Channels), in %
Source: Bank Negara Malaysia
THE PLAYERS WHO GO DIGITAL
Following the initiative made by BNM, there are currently 211 family takaful products, as
at to date that can be applied via online. The products offered are affordable and
simple application process.
The digitalization journey should offer hassle-free and convenient ‘online shopping’
experience to the customers. The processes include exploring the choice of operators,
choosing and understand the products details and eventually to sign-up.
Sharing the author’s experience whilst completing this assignment, it is exciting to see
some operators’ webs are conveniently accommodating to the need. It is easy to spot
the online products without much navigation.
Having clear details, adequate information and hassle-free process can help customers
in making decision. That is how the ‘online shopping should be.
Some of the operators with the easy to spot segments are:
1 Including AIA I-One Plan that is mentioned by MTA but not available in the page
0.6 3.28.2 7.5
39.042.4
47.4 41.8
4.8 5.1
2017 2018
Internet and Others Brokers Banking Inst. Agents Direct Clients
4
Great Eastern Takaful
Hong Leong MSIG Takaful
5
Zurich Insurance & Takaful
PruBSN Takaful
6
Takaful Malaysia Bhd
Except for Takaful IKHLAS Family Berhad, here are the lists of online family takaful
products by operators:
1. AIA PUBLIC TAKAFUL
a. AIA I-ONE PLAN
Description A term family Takaful plan which covers death and total
and permanent disability for one year
BENEFITS
Death or Total and Permanent
Disability (TPD)
RM50,000
RM100,000
RM150,000
RM200,000
RM300,000
RM400,000
RM500,000
*This product is not available in AIA page but mentioned by MTA. This info is retrieved here: https://www.aia.com.my/en/our-products/online-products/aia-i-one-plan/faq.html
7
2. AMMETLIFE TAKAFUL BERHAD
a. I-AM-WIRA
Description
-A regular contribution protection plan.
-An additional 3 times of sum covered is payable if death
or TPD is due to accident or death due to dengue or any
insect/snake bites
BENEFITS PLAN 1 PLAN 2 PLAN 3
Death or TPD due to All Causes RM50,000 RM100,000 RM200,000
Death or TPD due to Accident
RM150,000 RM300,000 RM600,000 Death due to Dengue or Any
Insect/ Snake Bites
Hospitalisation due to Accident
(per day) RM100 RM200 RM300
3. ETIQA FAMILI TAKAFUL BERHAD
a. I-SECURE
Description A term takaful plan that provides death and TPD coverage
BENEFITS
Death and TPD From RM100,000 to RM500,00
Extensive Period of Coverage Extended up to 75 years old (participation between
21 years to 45 years old)
No medical check-up No medical examination required
b. I-DOUBLESECURE
Description A term takaful plan, where coverage sum payable for
accidental causes will be doubled
BENEFITS
Double Death The beneficiary will receive double the sum covered
when death is caused by an accident
Double TPD
Insurer and loved ones will receive double the sum
covered when total permanent disability is caused
by an accident
Flexible Coverage Three coverage amounts specifically, RM50,000,
RM100,000 and RM200,000
No medical check-up No medical examination required
8
c. E-MEDICAL PASS TAKAFUL
Description -A standalone medical Takaful plan that provides medical
coverage up to age 80
BENEFITS SILVER GOLD PLATINUME
Overall Annual Limit RM60,000 RM80,000 RM120,000
Overall Lifetime Limit No Limit
SECTION A: IN-PATIENT & DAY CARE SURGERY BENEFITS
Hospital Room & Board Charges
(per day limit) RM100 RM150 RM200
Hospital Room & Board Charges
(days per annum limit) No Limit
Intensive Care Unit Charges (No
limit on days per annum)
As Charged (subject to overall annual limit)
Surgical Fees
Anaesthetist Fees
Operating Theatre Fees
Hospital Supplies & Services
Charges
In-Hospital Physician / Specialist
Visit Charges (2 visits per day limit)
Day Care Surgery Fees
Ambulance Fees
SECTION B: OUT-PATIENT BENEFITS
Pre-Hospital Diagnostic Tests
Charges, or Specialist
Consultation Fees
As Charged
Post-hospitalisation Treatment
Charges
(subject to overall annual limit)
Emergency Accidental Out-
Patient Treatment Charges
Out-patient Kidney Dialysis
Treatment Charges
Out-patient Cancer Treatment
Charges
SECTION C: OPTIONAL
Deductible Option
Yes – Deductible limit: RM1,000, RM3,000 & RM5,000
per hospitalization
No – 100% of the eligible medical bill paid by Etiqa
No medical examination No medical examination required
9
d. E-CANCERCARE TAKAFUL
Description A pure protection plan that covers early stage to advanced
stage cancers, up to 20 years
BENEFITS
Early Cash Payout A cash payout of 30% of the covered amount will be paid
directly for early stage cancers, including carcinoma in situ
Lump Sum Cash Payout A lump sum of 150% of the covered amount will be paid directly
upon diagnosis of advanced cancers
No medical examination No medical check-up required
4. GREAT EASTERN TAKAFUL BERHAD
a. I-GREAT MURNI 2.0
Description A term plan that provides lump sum benefit payment upon
death or TPD
BENEFITS PLAN 1 PLAN 2 PLAN 3 PLAN 4 PLAN 5
Death and TPD RM100,000 RM200,000 RM300,000 RM400,000 RM500,000
Bereavement Allowance RM5,000
Underwriting surplus and
investment profit Entitled to the underwriting surplus and investment profit, if any
b. I-GREAT CRITICAL CARE
Description A stand-alone Takaful plan that provides coverage any of 45
Critical Illnesses
BENEFITS
Sum Coverage Up to RM500,000
Coverage for 45 Critical
Illnesses
Except for angioplasty and other invasive treatments for
coronary artery disease whereby the claim payout is limited to
10% of the Sum Covered subject to a maximum of RM25,000
Underwriting surplus and
investment profit Entitled to the underwriting surplus and investment profit, if any
No medical examination No medical examination required
10
c. I-GREAT MEDI CARE 2.0
Description
A standalone medical Takaful plan without savings and
investment element that provides coverage for Hospitalisation
and/or Surgical Treatment due to accident or illness up to age
80 years next birthday
BENEFITS PLAN TYPE D MC 200
Hospital Room and Board
RM200
As charged, subject to the limit stated above.
Intensive Care Unit As charged.
Hospital Supplies and
Services
As charged.
Reimbursement of Reasonable and Customary Charges which
is consistent with those usually charged to a ward or room and
board accommodation which is approximate to and within the
daily limit of the amount stated in Hospital Room and Board
benefit under the plan covered.
Surgical Fees
Operating Theatre
Anesthetist Fees
In Hospital Physician Visit (2
visits per day)
Pre-Hospitalisation Diagnostic
Tests (Within 60 days before
hospitalisation)
Pre-Hospitalisation Specialist
Consultation (Within 60 days
before hospitalisation)
Post-Hospitalisation
Treatment (Within 90 days
after hospital discharge)
Ambulance Fees
Day Surgery
Emergency Accidental
Outpatient Treatment
3,000
As charged, subject to the limit stated above.
Overall Annual Limit for Items 100,000
Overall Lifetime Limit No limit
Zero Co Takaful No Co-Takaful is applicable for this plan
No medical examination No medical examination required
11
Underwriting surplus and investment
profit
Entitled for underwriting surplus and investment profit, if any
5. HONG LEONG MSIG TAKAFUL BERHAD
a. HLM TAKAFUL I-CRITICAL CARE
Description
-A standalone critical illness (CI) Takaful product which covers
5 critical illnesses namely heart attack, stroke, cancer, kidney
failure and coronary artery bypass surgery.
-This plan is guaranteed renewable for a term of 10 years
BENEFITS
Critical Illness Benefit
-Sum Coverage up to RM500,000
-Upon diagnosis of any one of the covered diseases listed
below:
Heart Attack – of specified severity
Stroke – resulting in permanent neurological deficit
with persisting clinical symptoms
Cancer – of specified severity and does not cover
very early cancer
Kidney Failure – requiring dialysis or kidney transplant
Coronary Artery By-Pass Surgery
No medical examination No medical examination required
b. HLM TAKAFUL I-HOSPITAL CARE
Description
-A standalone hospital income benefit Takaful product which
pays daily cash allowance upon hospitalisation.
-If the admission is due to Cancer, the daily cash allowance
will be doubled
BENEFITS
Hospital Cash Benefit (other
than Cancer)
Pays cash benefit ; RM100 – RM500 (in a multiple of RM50) per
day upon hospitalization
Hospital Cash Benefit due to
cancer Double cash benefit if hospitalised due to Cancer
No medical examination No medical examination required
12
c. HLM TAKAFUL ALPHA SAVER
Description - An endowment Takaful product that can fulfill protection and
savings needs
BENEFITS
Death or TPD
-Sum covered:
ENTRY AGE
MONTHLY
CONTRIBUTION 1-45 46-55
RM50 RM10,000 RM7,000
RM100 RM20,000 RM14,000
RM200 RM40,000 RM28,000
Funeral Benefit A guaranteed additional 10% of the Basic Sum Covered will be
payable upon death
Triple Coverage For
Accidental Death A guaranteed 200% of the Basic Sum Covered will be payable
Maturity Benefit 100% of the Total Contribution Paid will be payable provided
Value-Added Services
SERVICE AMOUNT
Hajj by Proxy(for Muslims) RM3,500
Waqf RM500
Qurban(for Muslims) RM750
Cash Payments
CASH PAYMENT (RM)
END OF
CERTIFICATE
YEAR
% OF THE
TOTAL
CONTRIBUTION
PAID
PLAN50 PLAN100 PLAN200
5 5% 150 300 600
10 5% 300 600 1,200
15 10% 600 1,200 2,400
20 15% 900 1,800 3,600
Total 1,950 3,900 7,800
No medical examination No medical examination will be conducted upon applying
13
6. PRUDENTIAL BSN TAKAFUL BERHAD
a. CANCER PLAN
Description
-A yearly renewable term takaful plan which
provides financial protection upon diagnosis of
cancer.
-No amount will be payable upon death of
participant.
BENEFITS
Sum Coverage Cash payout up to RM250,000 upon the diagnosis of
cancer
Easy to Subscribe Only answer 2 questions related to cancer
Wider Range Decide own contribution from as low as RM0.08 per
day, according to needs
b. MEDIC PLAN
Description
-A renewable medical plan
-It reimburses medical expenses incurred in the
event of hospitalisation and for specific outpatient
benefits.
BENEFITS
Hospital Daily Room & Board Benefit Up to RM150 per day
Hospital & Surgical Benefits
1.Intensive Care Unit/ Cardiac Care Unit
Benefit
2. In-Hospital & Related Services Benefit
-Surgical Benefit
-Hospital Supplies and Services
-Operating Theatre
-Anesthetist Fees
-In-Hospital Specialist’s Visit
As Charged, subject to Deductible
Outpatient Treatment Benefits
1. Pre-Hospitalisation Treatment Benefit
2. Post-Hospitalisation Treatment Benefit As Charged, subject to Deductible
3. Day Surgery Benefit As Charged
Additional Benefits
1. Emergency Treatment for Accidental
Injury Benefit
2. Government Hospital Daily Cash
Up to RM5,000 per annum
RM50 per day
14
Benefit
3. Outpatient Cancer Treatment Benefit
4. Outpatient Kidney Dialysis Treatment
Benefit
As Charged
DEDUCTIBLE RM1,000, RM2,000, RM3,000
ANNUAL LIMIT RM100,000
LIFETIME LIMIT No lifetime limit
EASY TO SUBSCRIBE Only answer 3 questions related to cancer
WIDER RANGE Decide own contribution from as low as RM4 per
day, according to needs
7. SUN LIFE MALAYSIA TAKAFUL BERHAD a. SUN ESSENTIAL-I
Description
- A term plan that provides death and TPD benefit due to all causes.
- This plan also provides additional 100% of basic sum covered in the event of
death / TPD due to specified infectious diseases
BENEFITS PLAN 1 PLAN 2 PLAN 3 PLAN 4 PLAN 5 PLAN 6
Death and TPD
due to all
causes
RM50,000 RM100,000 RM200,000 RM300,000 RM400,000 RM500,000
Death or TPD
due to
specified
infectious
diseases
(Dengue Fever,
Chikungunya
Fever, Malaria,
Japanese
Encephalitis,
Avian Influenza
or Zika Virus
Infection)
RM100,000 RM200,000 RM400,000 RM600,000 RM800,000 RM1,000,000
No medical
examination No medical check- up required
15
b. SUN EMEDICARE INCOME-I
Description A medical and health takaful plan with surplus sharing that
provides comprehensive hospital income coverage up to age 70
BENEFITS PLAN 1 PLAN 2 PLAN 3
Daily Hospital Income
Benefit RM100 RM150 RM200
Specified Infectious
Diseases Daily Hospital
Income Benefit
RM150 RM225 RM300
Overseas Daily Hospital
Income Benefit RM200 RM300 RM400
ICU Daily Hospital
Income Benefit RM300 RM450 RM600
No medical examination No medical check- up required
c. SUN ECRITICAL SHIELD-I
Description
-A medical and health takaful plan that provides coverage against
lifestyle diseases
-This plan comes with Top 3 CI Care benefit* and Diabetes Care
benefit** and it covers up to age 70.
*Top 3 CI Care benefit refers to cancer, stroke and heart attack
**Diabetes Care benefit refers to Surgery for Type 2 Diabetic
Retinopathy, Limb Amputation due to Type 2 Diabetic Complications
or Severe Diabetic Nephropathy resulting in Kidney Failure
BENEFITS PLAN 1 PLAN 2 PLAN 3 PLAN 4 PLAN 5
Top 3 CI Care Benefit RM50,000 RM100,000 RM150,000 RM200,000 RM250,000
Diabetes Care Benefit RM10,000 RM20,000 RM30,000 RM40,000 RM50,000
No medical
examination No medical check- up required
16
8. SYARIKAT TAKAFUL MALAYSIA KELUARGA BERHAD
a. TAKAFUL MYCLICK MEDIPLUS
Description A medical plan that pays the eligible medical expenses
BENEFITS BRONZE SILVER GOLD
Section A: In-Patient and Daycare Surgical Benefits
Daily Hospital Room and
Board (No limit on
number of days)
RM100 RM150 RM200
Intensive Care Unit
(Maximum 60 days per
any one disability)
As charged
Surgical Fees
Anaesthetist Fees
Operati
ng Theatre
Hospital Supplies and
Services
In-Hospital Physician's
and Specialist's Visit
Ambulance Fees
Day Surgery
Daily Cash Allowance at
Malaysian Government
Hospital (No limit on
number of days)
RM100 RM100 RM100
Section B: Out-Patient Benefits
Pre-Hospitalisation
Benefit
As Charged
Post-Hospitalisation
Benefits
Out-patient Cancer
Treatment
Out-patient Kidney
Dialysis Treatment
Overall Annual Limit (for
Sections A & B) RM 50,000 RM 75,000 RM 100,000
17
Worldwide coverage
Access specialised care all around the world, subject to the
reasonable and customary charges in Malaysia
Pay and collect points Gain 8excite loyalty points and get great deals after paying
contribution
No medical check-up No medical examination required
b. TAKAFUL MYCLICK TERM
Description
-A term takaful plan that provides death and TPD
coverage
- Option to include 39 critical illness coverage
BENEFITS
Death and TPD From RM50,000 and up to RM500,000 or RM250,000
for participants’ children
Optional - Critical illness
coverage
39 critical illness coverage
Pay and collect points with
8excite
Gain 8excite loyalty points and get great deals after
paying contribution
No medical check-up No medical examination required
9. FWD TAKAFUL BERHAD (FORMERLY KNOWN AS HSBC AMANAH TAKAFUL
(MALAYSIA) BERHAD)
a. FWD PROTECT DIRECT
Description -A pure protection Takaful plan that covers death
-Participate in the product as an Individual or Family
BENEFITS
Death Up to RM50,000
Pay same contribution yearly Pay level contribution
No medical check-up No medical examination required
18
b. FWD CARE DIRECT
Description
-A pure protection Takaful plan that a lump sum benefit
when diagnosed with cancer
- Participate in the product as an Individual or Family
BENEFITS
Cancer Benefit Up to RM250,000
Pay same contribution yearly Pay level contribution
PERLINDUNGAN INITIATIVES
Apart from the above products, it is equally important to highlight on Perlindungan
Tenang initiative that see few online products created as part of the objectives.
Perlindungan Tenang is a national initiative launched in November 2017 with the
support of BNM that aims to enhance financial inclusion of underserved segments in
Malaysia, particularly the bottom 40% of household (B40).
Under the initiative, insurance and takaful products were created based on three basic
criteria, which are affordable, accessible and simple. The first batch includes six life
insurance products, three family takaful products and one general insurance product.
So here are the 3 family takaful products available under the scheme:
Company AIA Public Takaful2 Prudential BSN Takaful Takaful IKHLAS
Product Name AIA i-Starter Plan Lindungi AGRO Mabrur-i
Where to participate
(Channel) Online Online
AgroBank Branches
Nationwide
Entry Age 16 - 55 Years Old 19 – 60 Years Old
18 – 64 Years Old (For
ages 60 and above,
ONLY eligible to Plan 1)
Sum Covered RM10k/ RM15k/ RM20k/
RM25k/ RM30k RM20k/ RM30k
RM13k (Plan 1)/ RM26k
(Plan 2)/ RM40k (Plan 3)
Contribution
As low as RM39.00 yearly
(Depend on
Age/Gender)
As low as RM50.00 yearly
(Depend on
Age/Gender/Health
Status/Occupation)
RM75 (Plan 1)/
RM135(Plan 2)/
RM195(Plan 3) yearly
Source: MTA
2 The page is not available in the company’s page but it is mentioned by MTA
19
THE FUTURE: THE DO OR DIE MISSION
The growth potential for family takaful industry remains enormous and promising given
the low percentage of the Malaysian population having takaful at 15.2% despite a
Muslim population of 60% (Malaysian Takaful Association).
Given the digital innovation in products, processes and business models of almost
industries in the world today, it is super imperative for the famiy takaful operators to
embrace the challenges presented by the digitalization. They should be agile and
responsive towards the digital transformation. As echoed by KMPG in its report Insurtech
10: Trends for 2019:
“Digitize or die — how insurers must adopt business process transformation and become
agents of change”
Ultimately, the advancement of digital technology would provide new ways for industry
to reinvent itself, improve its distribution channels and engage with customers to reach
out to more underserved markets.
Apart from that, going digital enables the operators to better insight on customers’
need based on the database. This help the operators to stay relevant in the market
and to say connected with customers.
Although the transformation is considerably still at infancy stage, Malaysians are
certainly ready for the change. The rapid growth of online channel and high number of
electronic payments (e-payment) made by the insurers show that digitalization is slowly
taking place in the country. According to Life Insurance Association of Malaysia (LIAM),
payments made by insurers via E-payment constituted 91% of the total volume of
transactions and 87% of premiums received by the end of 2018. Migration to e-
payments is one of the keys in transformation agenda.
Sharing the author’s experience; it is extremely important for the takaful operators to
build customer-friendly page that offer pleasant experience. There are few winning
factors to influence the customers’ decision; easy navigation, clear information and
details of products are easily available.