KUALA LUMPUR, 16 NOVEMBER 2009 – Malaysian vehicle owners should get enhanced services and value from motor insurance and motor takaful [Islamic insurance concept] products following the approval of a new business intelligence solution, according to local insurance firm ISM Insurance Services.
ISM Insurance Services Malaysia chief executive officer Carl Rajendram said its Automotive Business Intelligence System (ISM-ABI) has been approved by agency Persatuan Insurans Am Malaysia (PIAM) and Bank Negara Malaysia (BNM).
“This means the market value guide could now be incorporated into the motor insurance policy as an allowable reference point to determine the market value of vehicles,” said Rajendram, adding that this practice is in line with developed markets.
“Presently, many insurance companies printed the previous year’s sum insured and corresponding premium on the renewal notice sent to its vehicle owners,” he said. “The onus was then on the vehicle owner to adjust the sum insured to the current market value before requesting his agent or company to re-compute the premium to be paid.
ISM Insurance Services Malaysia is a financial services shared services provider with MSC (Multimedia Supercorridor) Malaysia status.
Increasing transparency
“Many consumers are caught unaware as they failed to adjust the sum insured accordingly, resulting in either over insurance or under insurance,’ he added. “With the new service from ISM, insurance and takaful companies now have the ability to generate renewal notices with the current year sum insured with the corresponding premium to be
paid.”
“The ISM-ABI is the only approved system for vehicle valuations among financial
services companies in Malaysia,” he said. “The service increases transparency in the whole motor insurance process not only for purchasing insurance but also during claims.”
“In the event of claim, the consumer would be penalised for under-insuring his vehicle or in the event of over-insurance, only the market value would be payable. Prior to the ISM-ABI, there was no credible and quantitative reference point to determine the vehicle market values,” said Rajendram. “This has given rise to numerous complaints against insurers in the past wherein the consumer had failed to adjust the sum insured for his motor insurance—in the event of a theft claim market value settlement determined was often less than the unadjusted insured amount. The whole process lacked transparency for both the consumer and the insurance company.”
“With the new system from ISM, insurers and takaful operators may also choose to pre-determine the compensation upon theft and total loss claims by referencing the database,” he said. “Consumers are also able to verify the vehicle market value themselves from the website, www.carprices.com.my, and access the same information that insurers are accessing.”
