Micro Insurance for Small Businesses

PROTECT WEALTH

THE introduction of micro insurance for small-scale businesses in Malaysia is a highly original and innovative measure, to ensure continuity and viability of small traders to weather sudden losses which affect their business, say insurers.

"The introduction of a micro insurance scheme with premiums from as low as RM20 per month will provide financial protection to many small businesses," said Life Insurance Association of Malaysia (LIAM) president Md Adnan Md Zain.

It also said the additional RM1,000 tax relief granted for annuity premiums is most apt to support the development of retirement schemes by life insurance companies.

The expansion of micro insurance and retirement schemes will help to improve the penetration rate of the life insurance sector, which is currently at 41 per cent.

 The General Insurance Association of Malaysia (PIAM) said the government's move to support and facilitate proposals for the restructuring of motor insurance cover for third party liabilities is necessary.
This will lead to ultimate deregulation and liberalisation of the motor and fire insurance sectors, which are currently operated under strict tariff regimes.

"The restructuring of the third party motor insurance sector, especially in relation to third party bodily injury liabilities, augurs well for the positive development of a viable, sustainable and affordable mandatory scheme for third party motor insurance in Malaysia," its executive director Lim Chia Fook said.

BIMB Holdings Bhd group managing director Johan Abdullah said the budget is an encouragement for takaful players to explore more overseas potentials as profits derived from overseas operations will be tax exempted.

By Rupinder Singh
Source: Business Times Online