Monday, November 30, 2009

No Claim Discount (NCD)

discountNCD is a financial incentive for the Insured, if he hasn’t made any claims under the Motor Insurance policy.

In Singapore, if there is no claim made during a period of Insurance immediately before the renewal of a policy, a NCD will be granted on the renewal premium.

The discount increases as the years increase.

NCD is transferable from one Insurer to another

What is Excess? (Motor Insurance)

 

excess

The term “Excess” in Motor Insurance relates to the 1st part of any claim that the Insurer will not pay. This amount has to be paid by the Insured.

Excess” may be removed/reduced if the Insured proposes to pay a higher premium.

Reasons for “Excess”:

- Making the Insured liable for the excess payment, instills a greater sense of care on the part of the Insured

- Rather than terminating the policies of Insureds with bad claim experience, higher excess may be offered

Types of Private Motor Insurance Cover

 

mi

In Singapore, private motor insurance applies only to the following areas:

- The Republic of Singapore

- West Malaysia

- Part of Thailand within 50 miles of the border between Thailand & West Malaysia

There are 4 general types of Motor Insurance:

1] Act Liability Only

- This is the only compulsory cover in Singapore

- Covers only death or bodily injury to third-parties (including passengers)

- This cover is usually not sold on its own

2] Third-Party Only

- Covers death or bodily injuries to third-parties and/or passengers, and also covers damage to property belonging to third-parties

3] Third-Party, Fire & Theft

- Covers death or bodily injuries to third-parties and/or passengers, and also covers damage to property belonging to third-parties

- Plus covers loss or damage resulting directly from Fire and Theft Only

4] Comprehensive

- This cover has the widest protection, it covers the Insured’s liability for causing death/bodily injury or property damage to third-parties (including injury/death to passengers)

- Also covers damage to vehicle the Insured owns

- It can provide for reasonable medical expenses incurred arising from his own bodily injury and also Personal accident benefits

An examples of a Comprehensive plan is AIG Auto Plus.. 

AIG Auto Plus Brochure download:

http://www.aiggeneral.com.sg/Images/AutoPlus%20Brochure%200409_tcm440-66918.pdf

For more information, please drop me an email: mark.lim@aia.com.sg

Over 100 evacuated after fire at Marine Parade; two hospitalised

 

fire-at-marine-parade phpeP6DCN

“Over 100 people were evacuated from a block of flats in Marine Parade on Monday after a fire broke out in an apartment.

A MediaCorp viewer captured the fire on film as it burnt a 5th floor unit at Block 53, Marine Terrace.

The fire broke out shortly before 3:30pm.

SCDF officers broke into the burning unit and quickly put out the fire which had started in a bedroom.

A Chinese man, who is believed to be in his 40s, was found in the living room with burn injuries. He was rushed to the Singapore General Hospital.

His neighbour - a Chinese woman in her 60s - was sent to the Changi Hospital after complaining of breathing difficulties.

The cause of the fire is being investigated.“

SOURCE: http://www.channelnewsasia.com

Sunday, November 29, 2009

E.T.H.I.C.S.

 

Ethics

E-xcellence –> To be the best one can be

T-rustworthiness –> An Insurance Agent possesses specialized knowledge that an average person will not usually know, thus they are reliant on the Agent to provide professional service & expertise

H-onesty –> Telling the whole truth and being fair

I-ntegrity –> Incorruptible

C-aring –> Having a caring attitude is the motivation behind the work of an Insurance Agent, no amount of money or recognition is reward enough for the challenges Insurance Agents face everyday

S-elflessness –> To identify the risks and to help clients get adequate cover for the risks they are facing, by serving others’ best interests, Insurance Agents indirectly serve their own interests

What is Co-Insurance?

 

coins

Co-Insurance is a method where several Insurers share direct responsibility for a risk, it increases the capacity of a market to underwrite risks.

What is Reinsurance?

 

reinsurance

Reinsurance is where an Insurer transfer part of a risk to another Insurance company (Reinsurer).

The Reinsurer can also transfer part of their risk to other Reinsurers, this is called Retrocession.

Reasons for Reinsuring:

1] Stability – It stabilizes the insurers losses by smoothening the fluctuations of the losses from each year

2] Capacity – The direct Insurer might not have the underwriting capacity to accept certain risks

3] Catastrophe Protection – Catastrophes can lead to massive claims, Reinsurance can cushion the effects of such events

Methods of Reinsuring:

1] Facultative – Customizable, time-consuming and costly

2] Treaty – Not customizable, Reinsurers are bound to accept risks without prior knowledge, less cumbersome and less costly

Types of Reinsurance:

1] Proportional – The amount of risks & premiums retained are shared in the same proportion by the Insurer & Reinsurer

2] Non-proportional – Reinsurer automatically accepts liability for all losses in excess of an agreed amount

Wednesday, November 25, 2009

Claim Disputes

 

disputes

Claim disputes between the Insured and Insurer may arise if the Insured is dissatisfied with the Insurer with respect to the quantum of loss.

The parties involved may go to Court to settle their disagreement, but it is expensive and time consuming.

Alternative methods of settlement are available, these include:

mediation

1] Mediation

This is a voluntary process, a Third-party (Mediator) helps to resolve the differences amicably between the interested parties.

The Mediator’s opinion is strictly without prejudice, his role is not to decide whose fault it is but to help the parties understand the whole situation and reach a solution that is acceptable to everyone.

Once an agreement is reached, it is enforceable by Law. if at the end of Mediation the parties are unable to come to an agreement they are free to proceed to Litigation or Arbitration.  

The main mediation centre in Singapore is the “Singapore Mediation Centre” (SMC).

Advantages of dispute resolution by Mediation includes:

- Parties have more control over the outcome

- Parties work together to solve the problem

- Time and Money is saved

- It is a less Formal and Confrontational proceeding

- It is more confidential

 

Arbitration

2] Arbitration

If the dispute is purely on the amount of compensation, Arbitration may be resorted to resolve the dispute.

Advantages of Arbitration includes:

- Less formal and can be completed quickly

- Less expensive

- The dispute is resolved fairly by specialized persons

 

litigation

Litigation

When unable to reach an amicable resolution, a claimant may have to resort to Litigation.

Advantages of Litigation:

- Gives the parties access to the knowledge and experience of the Judiciary

- The Court will give detailed reasons for its decisions

Disadvantages:

- Procedural requirements require interviewing witnesses and reconstructing facts after the event thus it is likely to be expensive

- Litigation takes more time, may even take years for a complex dispute 

Independent Damage Assessment Centre (IDAC)

 

car-accident

IDAC was launched to help improve the vehicle accident reporting and Insurance claims process.

IDAC will ensure that the extent of damage following an accident is ascertained immediately so as to reduce any chances for aggravated damages or inflated claims.

This will help control the rise of Motor Insurance Premiums.

Motorists may visit IDAC for vehicle damage assessment after an accident, IDAC will help complete the accident reporting form.

Who are Loss Adjusters?

 

loss_adjuster

Loss Adjusters are independent intermediaries who assist in validating claim settlements fairly.

They investigate claims on the Insurer’s behalf.

They can help the policyholders contact the relevant specialist services, and ensure the eventual claim is fair to both the Insured and Insurer.

The idea of an independent adjuster is based on the principle that both the Insured and Insurer are interested parties, it is important to have the opinion of an independent professional who is acceptable to both parties as well as the Court of Law in the event of a dispute.

Tuesday, November 24, 2009

Canadian woman loses benefits over Facebook photo

 

fb

BROMONT, Quebec – A Canadian woman on sick leave for depression says she lost her benefits after her insurance agent found photos of her apparently having fun on Facebook.

Nathalie Blanchard said Monday she was diagnosed with major depression and was receiving monthly sick-leave benefits until payments dried up this fall.

When Blanchard called her insurance provider, Manulife, to find out why she says she was told the Facebook photos showed she was able to work.

"If you have insurance, be careful. This is a major battle and it's not going to be easy," Blanchard, 29, said in a telephone interview from her home in Bromont Quebec.

She said her insurance agent described several pictures Blanchard posted on Facebook, including ones showing her having a good time at a Chippendales bar show, at her birthday party and on a sun holiday.

Blanchard said Manulife told her it was evidence she is no longer depressed.

Her lawyer, Tom Lavin, said Blanchard was wrongfully dismissed from her benefits, and she had the right to go on holiday.

"The issue for me is that they stopped her disability benefits without the proper medical recommendations. Her doctor recommended she go on vacation," he said.

Blanchard said she took three four-day trips when she was feeling especially low, on her psychiatrist's advice.

Manulife declined to comment on the case specifically but has said in a statement that "we would not deny or terminate a valid claim solely based on information published on Web sites such as Facebook."

Blanchard's case will be before Quebec Superior Court Dec. 8.”

 

SOURCE: http://sg.news.yahoo.com/ap/20091122/twl-cn-canada-facebook-insurance-1be00ca.html

Saturday, November 21, 2009

What does Indemnity mean?

 

indemnity-insurance

Indemnity, means the protection against damage of loss.

In Insurance, a contract of indemnity is intended to provide financial compensation for a loss which the Insured suffers, and “restore” them back to the financial situation prior to the event which lead to the loss/damage.

The Insured is expected to be compensated for the full loss and nothing more, meaning the Insured should not make a profit from the loss.  

 

Contracts of Indemnity are usually applied for the following classes of Insurance:

- Property

- Liability

- Pecuniary

- Marine

Where a value can be placed on the subject-matter unlike Life Insurance. 

Why is the Insurance Company not the Proposer in an Insurance agreement?

 

Propose

In the Insurer’s case, they are generally not aware of all facts about the insured unless the insured tells them, therefore the Insurer is considered to be at a disadvantage as they cannot examine all aspects of the insurance that are material to them.

Hence, the Law sees the person taking up the policy as the proposer (main supplier of material facts to the agreement), and any non-disclosure of material facts will render the policy void.

In the Insured’s case, they can examine the specimen copy of the policy before accepting the terms in it.

Therefore, it is very important for the Insured to make a full and complete disclosure of material facts relating to the agreement to ensure that in the event of a loss, the claim is received without any complications.

The Benefits of having Insurance

 

benefits1] Financial Stability

- Prevents financial consequences that maybe faced without Insurance

- With Insurance, even if losses occur, people can look on the bright side and get their money back for those losses

2] Peace of Mind

- People can benefit from Insurance even if they do not claim from it, anxiety is reduced if the insured knows the Insurance is in place if an unexpected event were to occur

3] Stimulates Business Enterprise

- The need to retain large amounts of money to pay for potential losses disappears, and the money can be put to more productive use

Characteristics of Insurable Risks

 

house_piggy_bank

1] Large number of insureds

2] Accidental Loss

3] Definite Loss (in terms of Time & Amount)

4] The Loss must create a Financial Burden

5] Affordable Insurance (cost of Insurance is generally a small fraction of the item’s value)

6] Particular Risk (Does not affect the entire community)

7] Pure Risk

Types of Personal General Insurance in Singapore

 

ins

1] Motor Insurance

2] Property Insurance

3] Personal Accident Insurance

4] Travel Insurance

5] Personal Liability Insurance (coverage for Legal liability)

6] Foreign Domestic Maid Insurance

7] Golfer’s Insurance

8] Hospital Cash Insurance

9] Critical Illness Insurance

What are Actuaries?

 

act

Actuaries are professionals who design Insurance plans and evaluates the financial risks to the company that sells that Insurance plan.

The Singapore Actuarial Society was set-up in 1976.

Captive Insurers

 

captive

Captive Insurers are set-up to write the risks of its related companies.

Usually subsidiaries of large MNCs, the advantage of this is that they write only their in-house risks (price is based on their own loss experience), thus minimizing costs of Insurance.

The Insurance premiums are deductible as business expenses thus lowering corporate taxes payable.

Difference between an Insurance Agent & an Insurance Broker

 

agentbroker

An Agent is appointed by an Insurer to procure business for the insurance company, all acts carried out by the Agent in conjunction with the agency agreement have the same effect as being carried out by the Insurer.

A Broker advises his clients on their insurance needs and negotiates insurances on their behalf with Insurers.

Tuesday, November 17, 2009

What type of Health Insurance Product do i need?

 

whi

The above clearly illustrates which type of Health Insurance is needed to cover the respective needs…

 

Examples of the above Insurance products are:

Medical Expense – AIA Healthshield Gold Elite

Hospital Cash – AIA Pink of Health

Critical Illness – AIA Critical Guard

Disability Income – AIA Flexi Personal Accident

Long-Term Care – AIA Long-Term Care

 

Specially designed plans for children:

AIA Bundle of Joy

 

Specially designed plans for Women:

AIA Woman of Wisdom

Glow of Life

 

Do send me an email if you would like to know more about the above plans at: mark.lim@aia.com.sg

 

For more information about Health Insurance you may download the pdf below:

http://www.aiggeneral.com.sg/Images/GuideToHealth_English_tcm440-159217.pdf