News Risk Management19 Dec 2018

Malaysia:Road safety among four key risk areas of concern in 2019--AIG

19 Dec 2018

Road safety is among four key risk areas in 2019 to look out for amid changing lifestyles and progress in technology, according to AIG Malaysia.

AIG Malaysia CEO Antony Lee, also identified cyber security, protection for SMEs and travellers as the insurer’s other key focus areas in 2019. He did so at a special media briefing to mark the insurer’s countdown towards its global centennial year next year.

Road safety and high mortality rates

In 2017, Malaysia’s Ministry of Transport reported 533,875 road accident cases nationwide and over 6,700 fatalities. To tackle road safety and high mortality rates, AIG will be introducing an intelligent mobile app in 2019 which utilises telematics to engage with Malaysians and inculcate safer driving habits via gamification.

“Technology has allowed us to locate and manage real-time risks as we improve road safety standards for drivers and pedestrians alike. In line with our #AIGJagaYou promise, we will leverage data-driven insights from our mobile app, along with our claims experience, to cultivate better driving behaviours nationwide. This effort is also in line with the liberalisation of motor insurance where premiums are now heavily influenced by driver risk profiles,” said Mr Lee.

Demand for cyber-protection to rise

Another area of risk highlighted by AIG is cyber. With the advent of big data and the Internet of Things, demand for cyber-protection has exploded in recent years. In Greater China last year, AIG saw an 87% increase in cyber submissions following the WannaCry cyberattack - more than double the 38% increase in cyber submissions that AIG observed globally. There was also a 75% increase in total cyber insurance claims from 2016 to 2017.

Malaysia’s National Cyber Security Policy, which is currently being drafted and is expected to be launched next year, is expected to help curb cyber attacks from within and outside the country. AIG anticipates that local demand for cyber-protection against data breaches, identity theft, and malware will rise.

85% of SMEs underinsured and at risk

Another risk focus for the insurer is the need to protect Malaysian Small and Medium Enterprises (SMEs) against the unforeseen risks beyond the obvious perils, with property and equipment the greatest risks for SMEs next year. Last year alone, SMEs made claims in excess of MYR8.1 million ($1.9m) from AIG, and future claims are expected to persist at a higher range. With

According to AIG claims data, fire accounted for most SME claims in the last three years, and claims count and claim amount for fire losses also increased year-on-year in 2017. Despite the increase, only close to 15% chose to purchase business interruption insurance and similarly only 15% have purchased flood cover even though heavy downpour and unpredictable flooding has increased business risks significantly for SMEs – the Ministry of International Trade and Industry reported that the Kelantan floods in 2014 affected 13,000 SMEs, almost 40% of SMEs in the state.

Greater risk exposure due to democratisation of travel

The fourth risk for 2019 highlighted by Mr Lee is travel risks. The democratisation of travel through new technologies has made new experiences and destinations more affordable and accessible, with international outbound trips from Malaysia forecasted to reach 14.2m by 2021. However, globalised travel and unpredictable weather also exposes travellers to new risks such as natural disasters and terrorism.

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