More choices to buy insurance

The Star, Saturday, May 23, 2009, Kuala Lumpur: Insurance agents will remain a vital part of the general insurance industry even with the introduction of mandatory rebates for direct purchase of motor insurance, said the General Insurance Association of Malaysia (PIAM).

In a statement responding to the implementation of policy, the association said insurance agents would continue to be used as long as car owners were comfortable with and appreciative of their service.

The move, to be implemented on July 1, will see customers getting a 5% rebate in the first year and a 10% rebate for renewals when buying insurance directly.

“The concern of some agents that there will be a mass exodus of their customers to purchase directly is highly speculative and unwarranted,” said the association.
Insurance agents account for 60% of all business generated.

The association said that the move was intended to benefit consumers who wished to deal directly with companies.

“There are consumers who want more choices in terms of how they purchase insurance.

“We must also bear in mind the younger consumers who are very mobile and IT savvy,” said the association.

The association added that there were car owners who wanted to enjoy savings by going direct.

Meanwhile, the General Insurance Agents Association Malaysia (Perwakim) organised a meeting yesterday to protest the implementation of mandatory rebating.

Its president Liza Lau later told a press conference that Perwakim would start a signature drive as well as seek a dialogue with Bank Negara Malaysia and PIAM on the matter.
“We do not want this move to take place.

“It will lead to a loss of income which would in turn affect our ability to pay our staff,” she said.

Lau said many of the staff working for some 20,000 full-time agents would lose their jobs if the move were to take place.

Source from: The Star Online, URL:
http://thestar.com.my/news/story.asp?file=/2009/5/23/nation/3969860&sec=nation