Consumer’s To Enjoy More Transparent Motor Insurance And Takaful Services

Vehicle owners will enjoy enhanced services and obtain better value for their ringgit spent on motor insurance and motor takaful products with the approval of ISM Insurance Services Malaysia’s Automotive Business Intelligent System (ISM-ABI). Following the apporval of both Persatuan Insurans Am Malaysia (PIAM) and Bank Negara Malaysia (BNM), the market value guide has been incorporated into the motor insurance policy as an allowable reference point to determine the market value of vehicles. The ISM-ABI is the only approved system for vehicle valuations among financial services companies in Malaysia.

Carl Rajendram, Chief Executive Officer of ISM Insurance Services in Malaysia, said the introduction of the new system for motor insurance is in line with pratices in other developed market. He said presently, many insurance companies printed the previous year’s sum insured and corresponding premium on the renewal notice sent to its vehicle owners. The onus was 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.

In the event of claim, the consumer would be penalized for underinsuring 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. 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, added Rajendram.

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. “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. The new service will reduce uncertainty when insuring a vehicle and reduce dissatisfaction that consumers experience when making insurance claim”.

The ISM- ABI database was launched in 2007 and was developed together with EurotaxGlass’s, the world’s leading provider of automotive business intelligence. Using the same international standards, systems and methodology employed by EurotaxGlass’s in the more than 30 countries around the world, a dedicated team of analyst at ISM have developed the most comprehensive and credible automotive specifications and valuation database in Malaysia. Covering motorcycles, commercial vehicles and passenger cars, the Malaysian database is the first such venture for EurotaxGlass’s in Asia.

Rajendram said that most major motor insurance and takaful companies are in the process of adopting this new and more transparent system for motor insurance commencing 2010. It is part of the modernization of Malaysian’s motor insurance and takaful cover announced recently and will ultimately benefit both consumers, insurance and takaful companies. “The entire automotive industry is moving towards greater competitiveness and efficiency and we are confident that the ISM-ABI will play a pivotal role in driving this objective among all stakeholders” said Rajendram.

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