Entertaining our business channels (eg. agents and brokers) is part and puzzle of doing business – this has always been a tradition of sort for most industry and globally recognised as such. In this aspect our Malaysia insurance industry is of no difference.
“Building relationship” is the calling of the day in the business of wheeling and dealings but to what extent should we draw the line or rather how insurance companies are handling the entertaining side of our business with such entertainment and other relationship-building expenses being on the uptrend.
I really can’t see the solution – more a case of “just manage them….” sort of situation. Truly this is all about how one manages their spending as well as professional sides of things in the context of channel-relationship building and at the same time not letting such act runs wild and affects the insurance company’s branding and so on…
I have received an email from one of our reader commenting or rather complaining how the entertaining sides of our industry is hurting her family – you read, you decide….. Anyway I have taken out those sensitive parts of her email, like names and so on.
Nov 16, 2010
Dear sirs @Malaysia Insurance Online,
I’d like to highlight increasingly serious trend of insurance companies rewarding insurance agents in highly immoral manner. Money spent on incentive trips, drinking sessions, visitations to prostitutes entertainment outlets, night clubs, etc… have destroyed many families, resulting in rising divorce rates, ruining the reputation of insurance companies’ sales personnel & branch managers in the following manner :
1) The so called ‘CONVENTIONS'(Used by AXXXX Insurance), ‘FORUMS’, ‘PRESIDENT COUNCIL MEETINGS’ (Used by CXXXX Insurance) are too frequently organised, without real educational activities, these are just a way to spend $$$ for insurance agents to enjoy eg. 4 days 3 nights trips, normally there’s either no speaker at all or that the speaker only comes around for a mere 3-4 hours throughout the whole 4 day trip. So these are INCENTIVE TRIPS tentamount to ENTERTAINMENTS, although insurance companies call them ‘CONVENTIONS’/’FORUM’/‘PRESIDENT COUNCIL MEETING’, in order to gain income tax deduction. I’ve written to IRB to conduct field audits to disallow the claims on these ‘CONVENTIONS’/‘PRESIDENT COUNCIL MEETINGS’. Insurance companies now happily spending huge $$$ to organize trips every now & then for agents & staff to enjoy. These trips have taken lots of family time away as Sat & Sun have been taken away!!
2) High entertainment budget per insurance personnel results in insurance personnel bringing insurance agents to engage in excessive alcohol drinking at pubs & visitation to high class GROs/prostitutes at high class night clubs. Imagine they start drinking session right from 4pm till 12am whereby they are supposed to be working, to contribute to our nation. In order to ensure these are claimable in tax, insurance companies have successfully make employees incur these expenses & reimburse the staff, thereby escaping the eyes of IRB. I’ve written to IRB to check that these expenses are all incurred at night time. The drinking bills escape IRB’s eyes as these are reimbursed to employees……..however prostitution bills, they normally don’t park under insurance companies, company pays for beers & liquor & they bear their own prostitution expense… Sad but true, they even know where to go to avoid the police raid. IRB cannot help this situation but why Bank Negara chooses to ignore this? BNM didn’t reply to my concerns. It’s a negative image of insurance companies in Malaysia!
Example – An insurance agent, named ‘TAN Exxx Gxxx” went for prostitutions with an insurance company’s employee.
– XXXXXX Insurance Company – KL MGMT TEAM
Back in 2007 when my husband was with XXXXXX BUTTERWORTH BRANCH, whenever the mgmt team visits Penang, the big boss & the mgmt team member named ‘JOE’ will go drinking till 2am. Big boss normally brings them to high class KTVs, with high class GROs…..which can easily cost few thousand dollars per night. This ‘JOE’ is even worse, he went for prostitution with a prostitute who has 3 nipples!! Immoral ppl like that is occupying a high post in XXXXXX KL. Wonder how the wife will feel if she gets to know about it.
– MXXXXX INSURANS BHD – PENANG BRANCH
‘YEO CXXX CXXX’ is always seen holding 2 china dolls while engaging in drinking sessions, of course drinks are on MXXXX’s a/c.
– CXXXXX PENANG BRANCH
‘WooX AXX YXXX’ the xxxxxx xxxxx manager also engages in excessive drinking, coz he’s nothing to do after work, wife is in KL. Everytime after drinks, he speaks foul languages
3) ‘QUARTERLY REVIEW’ (organized by XXXXXX, BM BRANCH) : normally held in the evenings, from 6pm to 2am, held at the pubs eg Slippery Seniorita in Penang & Butterwoth, involving drinking, messing around with waitresses, dancing, etc… How can you hold such serious matters in pubs???? Insurance companies use these serious wordings to escape the eyes of IRB. All these things without BNM or other regulatory bodies to intervene, insurance industry will eventually become a dirty industry. IRB’s power alone cannot deter them, coz they can just hv proper documentation but in substance, it’s so different!! The insurance personnel actually document down who they entertain, normally these are insurance agents that they entertain at night.
If I’m not mistaken, BNM or PIAM have stepped in to disallow overseas trips, so insurance companies now organize local trips instead, several times a year, stealing away precious family time. I’m the wife of an insurance company’s salaried staff. My husband doesn’t earn commission from any insurance contract, but why should he be made compulsory to attend those trips? Those trips are meant for agents, then let the agents go enjoy, but companies are stingy also, trying to escape IRB’s eyes by using serious words like president council meeting/convention/forum, in order to get tax deduction.
May I appeal to you to let me have some key person’s e-mail contact so that I can bring this dirty industry’s practice to regulatory bodies, eg BNM/PIAM or any other relevant ones?? Thank you in advance
Yes, this is some fury disposition of a lady who totally disagrees with how those entertainment stuff are being utilised. She has stressed that this has been affecting her family well-being and relationship with her husband who is also a part of the insurance workforce.