The new No Claims Discount (NCD) Mantra

This may or may not be good news for all….

When ISM-NCD system was implemented in 2007, the operating framework was nothing but on a parallel run; one leg with IT platform and the other leg with the usual manual related options. After having ran for almost two years, ISM-NCD which ought to be an IT platform was never treated like one…or should I say, “It was just a big boy misbehaving…and refusing to grow up”.  FocusPoint

ARE YOU LOOKING AT WHAT I AM LOOKING AT? Yes! That’s the sad part about life, we all will watch things go by without bothering the understanding part, except when those are interesting! You know, we began to FOCUS better…so you must be!

The current ISM-NCD operating framework was never workable from the very beginning when we allowed the FLEXIBILITY at the point-of-sales that resulted in a PAIN-IN-THE-ARSE at the back-room. eggs_it'shot

Well it is a good time to have fried-egg, but why fried at the arse?

Anyway, today is Friday and the good news (at least for the first round), ISM-NCD maybe be adopted at the front-end point-of-sales on a compulsory basis. Meaning all (100%) NCD must be confirmed at the point-of-sales (POS) before allowing it to the customers, and this would include renewal transacted within the same insurer.

This means all existing POS-IT systems must be integrated with the ISM-NCD system, and this must surely include IT systems adopted by Motor franchise, Malaysian Motor Insurance Pool (MMIP) and internet-based portal.

The MOTOR TARIFF will be amended to enforce 100% NCD confirmation at any POS nationwide, and applicable for all insurers, takaful and MMIP. This enforcement further make IT system integration with ISM-NCD system compulsory. It would also seek to enforce a NO OVERRIDING of NCD allotted from the ISM-NCD within the insurers/takaful/MMIP’s POS system domain. This simply means, agents / staff cannot override the NCD alloted and the ISM-NCD is deemed to correct at any point in time. If there is a contest against the accuracy of the NCD level, the handling insurer/takaful/MMIP must assist the Insured until a final decision is given to the him/her. With the framework in place, this new proposed operating framework will eventually settle down well within a 12 months period….everything would be perfect…at least I see it this way!

NOW, for the pain with the MONEY! We need to expand some money to intergrate all available POS systems….and this may costs the company a bomb – perhaps with a few systems to intergrate, the amount may hit RM250,000 or more?? Will Tahan expand this money to do it? Will you, MR. CFOs? No Choice…..because the insurer(s) who refuse to participate would have the ISM-NCD system shut out on them! 4 LOL! that’s the word…..

Now for the final part….ISM would be opening the access to all including the public for enquiry….for FREE whether through SMS or public web browsing! I am not sure…don’t quote me but that’s should be the way forward! If MyEG can allow FREE for enquiring “saman”, why can’t ISM? This is what I called ICT. ICT not IT because “C” represents communication and we need to do just that,….to communicate and be transparent to all our intermediaries and Insureds….

At the end…of this write up, it is NOT THERE YET?curiosity

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5 comments for “The new No Claims Discount (NCD) Mantra

  1. jack
    January 12, 2010 at 00:45

    This mantra of ISM is haywired, wondered if it will works!

  2. WatsUp?
    July 20, 2009 at 11:01

    This is really nothing new; it has always been part of the original plan when ISM-NCD framework was implemented. So, really, it’s high time that this part of the plan be incorporated.

    As pointed out, this certainly shall eat into Insurer’s expenses, in terms of $$$ and time – but the way i see it, it’s an investment. Hopefully, the Insurers are given enough time for the enhancement to be incorporated. It seems to me that the recent incorporation of Direct Rebating for Motor Insurance was deployed without taking into consideration the time required for changes to be made to the software applications. Everything was done in a rushed and stressful manner. Malaysia Boleh!

    • July 20, 2009 at 23:03

      yes the whole industry should thank me for my write up….it was this write up that unites all those wandering thoughts! One got to start a spark to start a fire burning! From S’pore……

  3. Jap-pan
    July 18, 2009 at 10:51

    SOunds good! At least the agents can now rest easy, but how is PIAM and ISM able to monitor breaches, eg. insurers still use confirmtion without getting it from the ISM system?

    • July 18, 2009 at 22:02

      No issue it is all control and IT system audited….PIAM and ISM merely conduct audit to all the insurers’ available POS systems, ie they must not have any option for agent/staff to override the NCD % obtained from the ISM-NCD. Even if they are able to get away with compliance, this can only happened for the first year after this ISM-NCD’s new formula is fully inforce, as on renewal, this same insurer still have to go back to the ISM-NCD to confirm – they cannot just rely on the NCD % as shown in their own IT system. Anyway with IT today, it is very easy to audit, the only problem is that many people still thought auditing can only be done manually….with people checking on the documents and their contents…they are not catching up with the new world order of today!

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