Dato’ Tan Kian Beng is ANZIIF’s new Ambassador to Malaysia

With more than 20 years of experience in the insurance industry, and a highly respected long-time member of ANZIIF, Dato' Tan Kian Beng, KLHO Regional Manager at Generali Malaysia is a worthy recipient of the role of ANZIIF Ambassador for Malaysia.

“I am truly honoured and excited to be appointed as an ANZIIF Ambassador,” says Tan, who became an ANZIIF Fellow in 2023.

“This role represents a significant milestone in my professional journey and provides an incredible platform to advocate for the growth and development of the insurance industry in Malaysia.”

Tan believes ANZIIF the main benefit members in Malaysia will gain from having an ambassador will be an official point of referral for resources and educational programs, such as workshops, seminars and online courses that focus on current trends.

“There are also networking opportunities and advocacy for the recognition and value of insurance professionals in the wider business community is crucial,” he says.

“ANZIIF could play a significant role in promoting the contributions of our members, helping to elevate the profession and attract new talent to the industry.”

Exciting prospects

Tan sees many exciting prospects for the insurance industry in Malaysia.

“The evolving Malaysian industry has gained good momentum since the pandemic years,” he says.

“Insurers have learnt to adapt to evolving protection needs, demonstrating resilience and strength in the face of adversity.

He says recent statistics show that Malaysia's insurance penetration rate (measured as gross premium written as a percentage of GDP) is around 4.5 to 5 per cent, which is relatively high compared to many of its neighbours.

For Tan, enhancing customer engagement through education and access will be key to increasing penetration further.

To improve customer engagement and retention in a competitive market, Tan says Malaysian insurers are improving customer experiences by making purchases and claims processing easier and personalising their communications through mobile apps.

They are also improving customer education by offering product explanations, gaining feedback through net promoter scores and innovating with tailor-made products to meet the evolving needs of the customers. Much of this is being achieved via rapid digitalisation.

Accelerating digitisation

Tan notes that more Malaysian insurers have accelerated digital transformation since COVID-19 due to many changes in consumer behaviours.

The growing market demand for digital insurance offerings in Malaysia can be demonstrated by the Fintech Malaysia Report in 2022, which reveals a total of 32 players who are actively involved in the Malaysian insurtech space compared to only 16 players back in 2019.

Malaysia’s central bank, Bank Negara Malaysia (BNM), has been running a sandbox that allows fintech companies to test innovative solutions since October 2016.

This year, it also introduced an accelerated track that provides a simpler and quicker way for financial institutions with strong risk management track records to test innovative solutions that face regulatory impediments.

Building cost-effective partnerships

Insurers and other interested parties can now also apply to BNM for digital insurer licenses, but Tan doesn’t expect this to result in a major shake-up of the industry. That’s because these insurers are expected to predominantly write policies like motor insurance or perhaps health insurance.

Tan observes: “A handful of companies have already applied for the licenses. By the end of this year, we should have a clearer picture of who has applied, who has got approval and how this will affect competition in the market.”

He believes the digital insurer licensing regime might be an opportunity for further players to enter the Malaysian market in cost-effective effective partnerships instead of acquiring a stake in existing local companies.

Market consolidation

Tan notes that the Malaysian general insurance sector has undergone much consolidation over the years, often because of foreign entrants.

“When I started in this industry, there were over 50 players. Now there are about 20,” he says.

In Malaysia, however, local insurers must be at least 30 per cent owned by local banks or other parties. 

As an example, the Generali Group, one of the largest global insurance providers, has been active in Malaysia since 2015 when it acquired a 49 per cent stake in Multi-Purpose Insurans Berhad to create MPI Generali.

In 2022, it acquired full ownership of this MPI Generali joint venture and purchased a controlling majority stake in AXA Affin General and Life Insurance in Malaysia. In 2023, it relaunched as a single, unified brand, Generali Malaysia.

Regulatory challenges

Tan says a major challenge facing the industry is meeting Malaysia’s robust regulatory framework, which is overseen by BNM.

For example, this year, BNM introduced operating cost controls (OCC) on how general insurers reward their intermediaries, giving insurers greater flexibility to manage operating costs in line with their business strategies.

Intermediaries are the major suppliers of insurance in Malaysia and can either be agents of insurance companies or insurance brokers acting on behalf of potential policyholders.

“BNM’s changes have caused fierce competition within the market as insurers adopt different interpretations on how they control their costs,” says Tan.

In addition, the liberalisation of motor and fire tariffs in a phased approach has also been critical to encourage innovation and competition among insurers and takaful companies in the market.

“As a result, customers will be able to benefit from coverage that best suits their needs at a competitive pricing,” Tan says.

Climate change inspires innovation

He says Malaysian insurers are increasingly adapting their risk assessment models to address the challenges of climate change and environmental risks.

While some industries, such as oil and gas, may struggle to obtain cover, new policies and coverage options are also being developed to explicitly address climate-related risks like solar panel insurance.

For its part, Generali Malaysia has introduced a new fire clause, the Green Material Enhancement, which will automatically be included in all new business and renewals without any added premium. It enables customers to repair or replace fire damaged property with green technology or environmentally friendly materials and has a limit of 30 per cent of the total loss amount or RM10,000,000, whichever is lower.

“Sustainability has always been the originator of Generali strategy,” Tan says. “Striving to bring long-term value as a lifetime partner, Generali is determined to build a resilient society through its roles as a responsible investor, insurer, employer and citizen.”

A unique opportunity

Tan believes that becoming an ANZIIF Ambassador offers a unique opportunity for him to give back to the industry that has been instrumental in shaping his career.

“ANZIIF is a globally respected institution, and this role enables me to actively contribute to the growth, education and professional development of insurance practitioners, both in Malaysia and on the international stage,” he says.

Tan’s first step as an ambassador will be to pay a courtesy visit to all major stakeholders in Malaysia's insurance industry.