Posted by moven00 > 3 weeks ago | Report Abuse

Lagi Sekali ✅👏🏻….

Posted by wsb_investor > 3 weeks ago | Report Abuse

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

Posted by observatory > 3 weeks ago | Report Abuse

That means for an expected claim of RM100, premium is capped at RM125. The remaining RM25 (at max) needs to pay off commissions and management fees. Then not much will be left!

In comparison, the general insurance at least offers Allianz a combined ratio of 86%, i.e. underwriting margin is 14%.

Posted by wsb_investor > 3 weeks ago | Report Abuse

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.

Posted by observatory > 3 weeks ago | Report Abuse

Given such challenge, and BNM's caution in approving premium increase, is medical and health insurance a good business relative to other types of insurance? If not, why do insurers still offer such policies instead of freeing up their capital for other types of insurance business?

Posted by troy88 > 3 weeks ago | Report Abuse

Allianz will move up to RM30 eventually to join the likes of F&N, Dlady, etc in the RM30+ category..

Posted by wsb_investor > 3 weeks ago | Report Abuse

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.

Posted by yielder > 2 weeks ago | Report Abuse

is medical and health insurance a good business relative to other types of insurance? health insurance is not very profitable I think. Insurer is using it as a lead generator, to try to up-sell investment-linked plan, where they have much higher margin

Posted by wsb_investor > 2 weeks ago | Report Abuse

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.

Posted by yielder > 1 week ago | Report Abuse

wsb that means if I pay $1000 per month for ILP. initially $400 go into medical, $600 to investment. Later, insurer can adjust it, so $800 go to medical & $200 go to investment.
Is that correct? thanks

Posted by wsb_investor > 1 week ago | Report Abuse

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.

Posted by troy88 > 1 week ago | Report Abuse

Recent retracement was good time to buy. Long term TP 30+ still intact..

Posted by yielder > 1 week ago | Report Abuse

Heard from insider that 50% of people break the contract, as they cannot afford to continue paying the premium. Then they will get back less than half of their invested amount. I guess that's the most profitable part for the insurer?

Posted by wsb_investor > 1 week ago | Report Abuse

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.

Posted by yielder > 1 week ago | Report Abuse

wsb how is the refund calculated? if i've invested 100k, then got retrenched & need to stop the policy. do I get back 100k minus agent commission? I think there's a penalty. Do you know how much is that?

Posted by wsb_investor > 1 week ago | Report Abuse

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).

Posted by yielder > 1 week ago | Report Abuse

wsb if allianz were to redeem it's preference share. is it 1 pref share to 1 common share ratio? I found here, but not too sure. https://www.allianz.com.my/content/dam/onemarketing/azmb/wwwallianzcommy/pdf/investor-updates/2011/RightsofICPSHolder.pdf