Malaysian Motor Pool Case Study

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The Malaysian Motor Pool was formed on 24th July 1992 to replace the PIAM Unplaced Motor Pool to ensure that motor insurance cover was available to the public which could not readily find a local insurer to underwrite the risk The risks written by the Pool are collectively insured in equal proportion by all direct general insurance companies in Malaysia Membership .. as at dec 2011, member co 27 Operations are governed by a council of 10 members, comprising of CEOs or senior management of the member companies General administration was carried out by MMIP Services Sdn Bhd a subsidiary of MNRB Holdings. The Admin manager is also given the mandate to settle all third party bodily injury and fatal claims up to Rm50,000 per claim while the rest…show more content…
This in turn led to a significant negative impact to the profitability of member companies. The accounts ending 31st December 2010 showed a substantial deficit of over RM164 million or RM5.6 million per member company In essence, the substantial growth in MMIP business was an unintended consequence arising from the introduction of RBC against a backdrop of a Motor Tariff market that has not been revised since 1978. The performance of the Pool was further aggravated when the Pool, was directed in May 2011, to accept business from displaced vehicles without the appropriate loadings under MMIP rating structure. Members were concerned and alarmed that the situation in MMIP, if left unaddressed will be untenable and pose a major financial risk to the insurance industry. While recognising and appreciating the sensitivities of the issue and the various efforts made under the new motor cover…show more content…
hehe Net ibnr 31.12.2011 was computed to be rm288m vs rm142 m year before, increase of rm146m Issue.. on going losses on a day to day basis accepting new business with not enough loadings And in addition to book losses registered thus far.. MTA has firmly said that, based on shariah compliance, to participate in the MMIP POOL is NOT an option that can be considered. Root cause of the problem is the inadequacy of premium needs to be addressed The 20% per year premium hike for Act premiums as allowed by the New Motor Cover Framework helps to a certain extent MMIP loss ratios for Total Act as at Dec 31 2011 was

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