Kuala Lumpur, 19 July 2018 – Persatuan Insurans Am Malaysia (PIAM) and Malaysian Takaful Association (MTA) are encouraging vehicle owners to look at the purchase of their motor insurance/takaful policies in a new light. The liberalisation of the Motor Insurance Tariff which started on 1 July 2017 has adopted a phased approach to ensure a smooth and gradual transition to a fully liberalised environment. This was to enable consumers to better understand liberalisation and the impact that it will have on their motor insurance policies. Under the phased liberalisation insurance companies/takaful operators have also introduced new and innovative products to meet the evolving needs of consumers.
PIAM and MTA have recently launched the “Play Your Role” National Consumer Education Campaign which is focused on educating the public by creating awareness on the benefits of the Motor Tariff liberalisation. Its objective is to empower consumers to make the right choice for their insurance cover. The industry has appointed Ms. Adibah Noor as the Ambassador for this campaign which was officially launched on 11 Jun 2018. Adibah Noor, is a household name and a renowned actress, comedian and singer nationwide and will be able to reach out to Malaysians of all age, gender, race and social status with our educational messages.
As consumers are now more empowered to make choices, some pointers that they can consider when purchasing motor insurance/takaful cover are:-
Be A Smart Consumer
Insurers and takaful operators are providing new protection for motor vehicles, in addition to the conventional cover. As at 16 July 2018, 55 new motor insurance/takaful products have been launched. These include cover for sports rims, child car seats, remote keys for keyless car ignition systems, flood cover damage and many more.
Being a smart consumer also means doing things the smart way. Know what you need and how you can get the best protection for your vehicle. Motor insurance/takaful products can now be purchased comfortably online. The online platform known as the Motor Product Selector is easy-to-use, convenient and provides a wide variety of products to choose from. The Motor Product Selector is available on both PIAM and MTA’s websites at www.piam.org.my and www.malaysiantakaful.com.my, respectively.
On this platform, consumers can request for quotations from insurance companies /takaful operators of their choice. This will help and guide the consumers to be aware of the many special products offered in the market. Premiums quoted for a selected cover may vary from one insurance company/takaful operator to another, based on their business risks models and strategies. A point to note is that cheaper premium does not mean it is the best cover for you. Consumers should decide based on what the coverage provides. Customer service standards, claims handling and the track record of insurers are key factors to be considered.
“Motor insurance is basically a coverage that Malaysians have been buying without much thought. With Liberalisation, we are empowering consumers to get the right coverage from a wider range of products available. They can choose what is most suitable for them. At the same time, we have designed the Motor Product Selector to facilitate online purchase of motor insurance/takaful policies. In the event consumers wish to be guided during their purchase, they should consult their insurance agents for advice, or contact their selected insurers for more information” said Mr Antony Lee, Chairman of PIAM.
Know Your Risk Profile
Insurance remains a key risk transfer tool and risk profiling is an assessment of a risk that is to be insured. When risk profiling a motor vehicle to be insured, insurers/takaful operators will evaluate the probability of a claim arising and the possible amount of claim that may need to be paid out. This assessment will result in what insurers/takaful operators would charge for that risk i.e. the premiums. Various parameters are used for the assessment of a risk and may apply differently according to the Underwriting Guidelines adopted by the respective insurance company/takaful operator. Some of the parameters used are:-
- Age of the vehicle– An older car with more wear and tear as well as higher mileage makes it prone to more repairs, breakdowns and parts’ failures, which may result in an accident or even fatality.
- Age of the driver – A younger driver may have a higher chance of getting into an accident due to inexperience or a rash attitude. Statistics have shown most serious accidents were recorded by motorists aged between 17 and 23 years. Older motorists also have higher perceived risk as age causes a slowdown in reflexes leading to unsure or unreasonably slow drivers, resulting as a hazard to other drivers on the road. Illnesses like Dementia, heart problems and Parkinson’s disease have also caused accidents.
- Gender of the driver– Many studies have proven that females make better drivers as they are more patient and less reckless behind the wheel, thus resulting in safer driving habits. In the UK, male drivers pay more premium than female drivers for a similar motor insurance policy.
- Driver’s claims record – A motorist, who is constantly involved/causing accidents and making insurance/takaful claims is obviously high-risk and will end up paying higher motor premium/takaful contribution.
Other risk profile considerations may include the vehicle make, engine capacity, safety and anti-theft features installed in the vehicle, home and office location of the driver, number of previous traffic offences and maintenance record of the vehicle.
PIAM and MTA are also working diligently together with key stakeholders to ensure Malaysian motorists are provided with the best in service quality, professionalism, product options and distribution channels.
The Chairman of MTA, Mr. Muhammad Fikri Mohamad Rawi added “To further assist motorists in times of an accident or other breakdowns on the road, PIAM and MTA have setup the Accident Assist Call Centre (AACC) Helpline at 15-500, operating 24/7. In addition to arranging for roadside assistance, AACC also responds to basic or common enquiries on claims procedures or identifying the caller’s insurer/takaful provider as a free add-on service. We aim to enhance the industry’s overall service to its customers. AACC also seeks to provide consumers with peace of mind if they face any problem on the road.”