How has the company evolved from being a shareholder in MCIS Zurich to what it is today?
As a 40% shareholder of MCIS Zurich, we had a strong relationship with them. In time, we had to decide whether we were going to pursue serious growth in Malaysia or exit the market. We concluded that it was a market that we wanted to grow in, and so in 2012 we acquired MAA, which has operated in Malaysia for 48 years. Since the acquisition, we have been executing some serious integration work with our group to align better strategically, whilst still focusing to grow the business locally.
Can you elaborate on the importance of an established local presence – what is unique about operating in Malaysia?
Malaysia is one of the fastest growing markets in Southeast Asia. As a group, we want to make APAC a sizeable market for Zurich on the whole, and having a strong foothold in Malaysia can assist us in that. Malaysia, as we know it, has a vast and diverse economic landscape. It is also a land with many opportunities for various markets, such as the Takaful and the SME markets. This has given us an edge over the market.
How did Optimuz come about?
Optimuz has been specially designed for SME business owners, and covers both general and life insurance aspects, thus making it an all-in-one holistic solution for small business owners. Optimuz provides a simple solution for customers to empower their decisions in protecting their business. It provides customers with the privilege to choose a 360° coverage and protection for those they truly love, be it their assets or employees. The plan comes in different approaches, therefore giving the customers the ease and convenience to do business.
What makes this different from what is already offered to SMEs?
Most of what is currently offered to SMEs is prepackaged. The most commonly sought-after form of insurance for SMEs is protection against fire liabilities. However, most prepackaged insurance offerings can also include many others kinds of protection for which SMEs are paying premiums but do not necessarily need. Our approach is different because Optimuz was developed to be intelligent and robust in order to empower our customers, agents and employees. It is simple and convenient as it allows fast flow underwriting, anytime and anywhere. This approach provides a dedicated team of underwriters for our SME customers and we provide insurance coverage, which is relevant and customizable to meet the needs of our customers.
Detariffication of motor and fire insurance will begin in 2016. How is this going to impact the industry and what opportunities will it bring?
Detariffication will not only lead to more informed consumers, but also help them to distinguish between value and price. For Zurich Insurance, this is about creating value directly around our process so that we do not end up engaging in bidding wars. Currently, there is capacity in the market so average rates are declining. After detarriffication, this trend should continue as insurers will want to gain market share. This tends to lead to market volatility, as those firms losing money are obliged to increase rates again. Zurich's aim is to create consistency within the pricing model and ensure that every product that we offer will continue adding value.
What is your outlook for 2016?
We have identified a couple of key initiatives for 2016. First, we have to separate our composite license in line with new regulations. We also need to adapt to the changes brought about by detariffication in order to continue creating value and understanding our customers in the new competitive landscape. In a more liberalized market, segmentation becomes crucial. Much of our focus is now on creating and leveraging on differentiated value propositions through matching our unique service offering to the appropriate market segments. Malaysia is a strategically high-priority market, and one in which our ownership will continue to invest.