Cardinal rule number 1 is that consumers should be consistently provided with more buying options but yet they are put in a position of limited option or no option at all; usually on the pretext that this “one and only” option is in the interest of the consumers. Main reason sighted is usually about improving coverage and lowering premium but is this so?; is Education Malaysia Global Services (EMGS) coming into such tie-up solely with AXA truly serves to benefit the students?
Why can’t EMGS do it with more insurers’ involvement, where insurers are free to decide if their agents be allowed to participate in the process or otherwise? I would think, failure to provide options makes the whole process anti-competitive….
Well…. you read you decide.
The following is the writeup on the controversial tie-up; you may click on the link for the original posting by Free Malaysia.
|In the exclusive tie-up between AXA Affin General Insurance Bhd and the government’s agency looking after the needs of foreign students, independent agents may be the eventual collateral damage.
Education Malaysia Global Services (EMGS) has appointed the insurance company as the sole provider for general insurance coverage that is compulsory for all foreign students.
This has effectively bypassed agents which had been servicing this niche market, depriving them of commissions.
Effective since Feb 1, 2013, the deal could be worth up to RM42 million in annual premiums for AXA Affin, which EMGS says will result in lower costs for students, without the cost-benefit to students.
However, for insurance agent Pee Chee Yong, who has been servicing the foreign student insurance market, it means a hefty loss.
“I see a loss of RM500,000 worth of premium for me in a very tough and competitive industry,” said Pee who made an industry standard 10% commission on the premiums earned.
Pee said a comparison of the benefits being offered by the AXA-EMGS plan are practically the same as what he and other agents have been providing, yet at a higher premium.
He said the tie-up is anti-competitive and he has filed complaints with the Malaysia Competition Commission (MyCC), Bank Negara Malaysia (BNM) and other agencies.
He said MyCC has not responded and that BNM has told him it was not the agency to oversee his complaint.
EMGS chief executive officer Mohd Yazid Abd Hamid responded to Pee and said that the negotiation with AXA Affin had be en done through an open and transparent procurement procedure, where the outcome is that EMGS can assure foreign students comprehensive coverage and proper healthcare at a standardised and affordable premium.
“It has never been EMGS’ intention to deprive anybody of their livelihood, as claimed by your complaint. And as for allowing for fair competition, that was EMGS’s intention by going through an open and transparent procurement process to award the contract,” said Mohd Yazid.
Another agent, Kunasekaran Vellaisamy, who claimed to have lost about RM600,000 in premium, supported Pee’s views and concurred with EMGS’plans being higher priced than the price he has quoted to universities and colleges for equivalent plans. “Why give expensive plans at lower benefit?” said Kunasekaran.
A comparative look by The Malaysian Reserve at the different plans, where the benefits cover group hospitalisation and surgical, outpatient treatments, repatriation benefits and personal accidents, EMGS charges RM500 to RM850, while the packages offered by some agents charged between RM300 and RM500.
The main difference is the coverage of emergency medical evacuation/repatriation where EMGS provides coverage between RM100,000 and RM300,000 depending on the plan chosen.
The agents’ plans offer between RM10,000 and RM50,000 coverage for the benefit. “RM20,000 coverage is enough to ensure the student can fly back to his home country under this benefit coverage,” said Pee.
According to Persatuan Wakil-Wakil Insurance Am Malaysia (Perwakim), the association representing about 37,000 general insurance agents in Malaysia, there have been similar deals where certain groups of businesses have been awarded to specific companies or bodies, therefore depriving insurance agents who have depended on those segments for their livelihood.
“Every time new rules are implemented, it affects the rice bowls of insurance agents. Don’t take everything away. Give us a portion of the share,” said Perwakim president Athinarayan Rao.
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