In recent days, My E.G. Commerce Sdn Bhd (including MyEG Services Berhad) and their insurance principals are consistently lambasted with complaints coming from other insurers. Most cited the blatant breach or disregard the existence of General Regulation 33 of the Motor Tariff, Guideline on Minimum Disclosure Requirements in the Sale of General Insurance Products and PIAM Members’ Circular on Website Advertisement by Agents of 13/11/08 (the guidelines focused on insurers control over their agents’ promotional materials on the web). (We were requested to post a blog in respect of insurance-eCommerce development in Malaysia with focus on MyEG….. firstly, to highlight the greenfield venture challenges of MyEG, secondly is to identify what exactly are the chronic and critical compliance related issues that MyEG and other similar ventures are facing and would be facing in the long and winding roads ahead.)
While MyEG Services Berhad own this website, www.myeg.com.my, the registered agent is My E.G. Commerce Sdn Bhd. They are representing two principal, RHB Insurance Berhad and Etiqa Takaful.
The Perpsectives of Non-compliance
While most non-life insurance community supported “MyEG” as a group in expanding the e-Commerce channel and providing option to the buying public, the same community is not in agreement to the manner MyEG promote their products and services. Tha major questionable isuues in as far as the insurance industry is concerned:
(1) Reviewing the website’s frontpage, the following banner is prominently displaying this message “Enjoy free RM30,000 PA insurance and other benefits”:
On clicking this “free PA…..” stuff, the web navigates the user towards the page apparently linked to RHB Insurance, as clearly depicted with the following statement “Step 1 of 3 Buy insurance from RHB Insurance Berhad…..Choose other insurance companies”. There is simply no explanation or illustration as to the “free PA….” stuff. The whole chapter is twisted to just buying insurance. This navigating command of the site tantamounts to enticing the customers towards buying Motor insurance in order to enjoy the “free PA…”!
(2) Taking a look at MyEG’s FAQ….”MyEG’s FAQ_Road_Tax_Insurance_Rebate(16092009))“, can’t help but create an impression that MyEG has little regards for the industry regulations. In Q5, the statement, “If you purchase your insurance and roadtax with MyEG, you will get…….” depicted buying insurance is a condition for the customers to enjoy the list of benefits prescribed! Q25 is also very shady, which could mislead the customers into believing “cash” maybe given to them…. or possibly a replacement car while vehicle is undergoing repairs!
(3) Agency registration number is not inserted by My E.G. Commerce Sdn Bhd, the agent for RHB Insurance and Etiqa Takaful. The website certainly did not try to differentiate between the two entities; My E.G. Commerce Sdn Bhd and MyEG Services Berhad although it has stated that the former is a wholly owned subsidiary of the latter. As MyEG Services Berhad is not the authorise agent, it must not made statement(s) in respect of insurance. As far as the proper lines are being drawn between insurance and the other products and services, then it makes compliance straightforward and manageable…..
Having said what ought to be said…. notably MyEG Services Berhad and their subsidiaries and associates (“MyEG”) must have gone through tough and difficult times reaching this point.
(1) In recent times, another 4 services providers were awarded with access to the Road Transport Department’s (RTD) database for driver’s licence renewal, LDL Application, Roadtax renewal, e-Hakmilik cancellation endorsement and PDRM summons alert. Undeniably MyEG’s position now in respect of insurance sales and RTD’s e-services is being compromised. Surely this is very true, especially where these new providers are charging fees that are less than 50% of what MyEG charges…..
(2) MyEG had tried approaching PIAM seeking exemption from the usual 1-Agent-2-Principal practice so that they can have the priviledge granted to POS Malaysia a few years ago, alas was outright rejected. At the time, May 2008, agents felt threatened by the MyEG’s eCommerce adoption, but it turned out that agents actually benefited from the roadtax renewal services of MyEG. However, members of PIAM have viewed MyEG as not complying with the various prescribed regulations…..and complaints against them continued!
(3) Syndicated cheats are also using MyEG Services website to paid for traffic summons, renewal of road tax and purchaing insurances using their compilation of fake or stolen credit cards…. on behalf of their “acquired’ customers, as was discovered recently. These were noted to be “clean jobs” complete with receipt from MyEG printed out for the customers. The lastest reports – just traffic summon alone totalled up to 600 cases. Now police is making efforts to cancel off those payment (vide the syndicate’s credit cards) made for summons. This means the summonses are being reinstated….too BAD, the consumers would have to pay again…sooo it seems!
MyEG said it achieved a strong bottom-line growth of 16 per cent year-on-year to RM17.2 million for its financial year ended June 30, 2009, following rising demand for its e-government services, particularly its online auto insurance and road tax renewal, and related services. With the above developments, looks like this may not be necessary so……
Into the future
Perhaps MyEG has adopted a WRONG business model, a model that is almost too good to be true, but always threatening the very existence of the agency force and the insurers. With the four NEW service providers starting business soon and in their case adopted a more friendlier equations with the agency force, which is certain to challenge MyEG into tough times. MyEG Services Berhad is a concessionaire for the Malaysian E-Government MSC Flagship Application. It is Malaysia’s dominant e-service provider with major focus in areas of government-to-citizen (G2C) services. The company’s main activities comprise development and implementation of e-government services and the provision of other related services for the e-government services projects. Perhaps because of their very diversified eCommerce businesses available MyEG should not have made substantial encroachment into the insurance selling channels – they should have recruited the market agents and made them part of the MyEG delivery system – the main objective is for the agency channel to drive traffic and audiences to the web system. Then with the RTD’s e-channel moving at a much faster pace under the strong influence of the agency force, MyEG would be able to put more focus into other areas of G2C development….
Do you agree with this blog posting? Or you are accusing me of promoting MyEG’s website here?