QBE Malaysia Confident Of Achieving Double-digit Growth

, , Comments Off on QBE Malaysia Confident Of Achieving Double-digit Growth

QBE Insurance (M) Bhd expects to continue to grow at above industry average this year, similar to the cumulative annual growth rate (CAGR) of about 16 per cent it achieved over the past five years.

Chief Executive Officer, Leo Zanolini said the company had grown profitably with good financial position and had gained market share in many general insurance areas including liability insurance, marine insurance, engineering insurance, as well as property insurance.

“Despite the Malaysian conventional insurance having suffered a contraction in the first quarter of this year, QBE Malaysia has shown a positive growth with sound financial position,” he told a media briefing on QBE’s “The Risk of Regret” report here today.

The report was based on interviews with some 300 small and medium enterprises (SMEs) and large corporations in Malaysia that took place in April and May this year.

Zanolini said the company was among the leaders in net return premiums in construction and engineering, marine and liability as the company was more geared towards corporate and specialty customers but had a smaller share in other general insurance segments.

The company’s liability portfolio, at about 15 per cent, was expected to grow rapidly, he added.

He said liability insurance, which is part of general insurance, was a complementary product that could protect businesses other than what was protected under general business protections like building, vehicles and health insurance.

Liability insurance could give a full range of protections so the company would have adequate coverage and safety nets, he said.

In his briefing, Zanolini said the findings showed a gap of awareness and usage of general business insurance and business liability insurance whereby nearly all (96 per cent) have some form of business insurance including general accident, and employees compensation cover but awareness and take up of liability insurance was far lower.

He explained that less than half (45 per cent) of Malaysian SMEs and large companies had business liability cover and 64 per cent were aware of it, while awareness was low for public liability insurance (31 per cent) and professional indemnity insurance (27 per cent).

In the last 12 months, the report showed that the most frequent risks faced by Malaysian companies included legal and regulatory compliance issues, loss of income due to business interruption, staff injuries while working, damaged or loss of inventory, equipment breakdowns and public or third party liability due to issues with product and services.

Hence, he said that with more companies experiencing legal and regulatory compliance issues last year, business liability insurance was becoming increasingly important for businesses.

“We are also surprised to see the pattern where companies are likely to take out business liability insurance only after a crisis hits. This is a concern because it potentially puts their businesses, clients, and the public at risk as they are missing out on compensation opportunities,” he said.

Looking ahead over the next 12 months, Zanolini said Malaysian businesses expected the challenging business conditions to continue with a slowdown projected, higher input costs and lower profitability.

He said the outlook also reflected the biggest challenges for businesses currently, namely profitability, cost reductions, staff retention, customer retention plus maintaining technology and systems.

Given the economic challenges and increasing pressure to invest into new technologies, companies needed to be sure of safeguarding their businesses adequately, he added.