Insurers In The Process Of Adopting ISM-ABI

PETALING JAYA, Nov 6 (Bernama) -- Most major insurance and takaful companies are in the process of adopting ISM Insurance Services Malaysia's Automotive Business Intelligence System (ABI) commencing next year.

ISM chief executive officer, Carl Rajendram, said the ISM-ABI was the only approved system for the valuation of vehicles by financial services companies in the country.

"The system will ensure that vehicle owners enjoy enhanced services and obtain better value for their ringgit spent on motor insurance and motor takaful products.

"It is part of the modernisation of Malaysia's motor insurance and takaful cover and will ultimately benefits both consumers, insurance and takaful companies," he told a media briefing on the new system here Friday.

Rajendram said Bank Negara Malaysia and Persatuan Insurans Am Malaysia had approved the ISM-ABI and the market value guide has been incorporated into the motor insurance policy as an allowable reference point to determine the market value of vehicles.

He said currently, many insurance companies would print the previous year's sum insured and corresponding premium on the renewal notice sent to its vehicle owners.

"The onus is on the vehicle owner to adjust the sum insured to the current market value before requesting his agent or company to re-compute the premium.

"Many consumers are caught unawares as they fail to adjust the sum insured accordingly, resulting in either being over-insured or under-insured," he said.

In the event of claim, Rajendram said, the consumer would be penalised for under-insuring his vehicle or in the event of being over-insured, only the market value would be payable.

Rajendram said prior to ISM-ABI, there was no credible and quantitative reference points to determine the vehicle's market value and this has resulted in complaints against insurers where the consumer had failed to adjust the sum insured.

"However, with the ISM-ABI, insurance and takaful companies are now able to generate renewal notices with the current year sum insured with the corresponding premium to be paid.

"The service increases transparency in the whole motor insurance process not only for purchasing but also during claims," he said.

He said the new system would also help insurers and takaful operators to pre-determine the compensation upon theft and total loss claims by referring to the ISM-ABI database.

Rajendram said consumers could verify the vehicle market value via the website at www.carprices.com.my and access the same information like the insurers.

"The new service will reduce uncertainty when insuring a vehicle and reduce dissatisfaction that consumers experience when making an insurance claim," he said.

-- BERNAMA