Chubb, a leading American insurance company, is reportedly planning to exit Myanmar, prompting criticism from its customers.
Chubb Insurance Company, a subsidiary of Chubb Corporation, founded in Philadelphia in 1792, employs more than 30,000 people worldwide and operates in 54 countries, including Zurich, New York, London, and Paris.
On April 8, 2019, the company received approval from the Ministry of Commerce to operate a life insurance subsidiary in Myanmar.
There have been reports on social media that the company is leaving Myanmar after six years, and has recently suspended its insurance-related activities.
The suspension began on December 12, according to some people working with the company and insurance agents.
"As far as we know, the systems used by Chubb insurance agents have been down since December 12," a source close to the company said.
According to a letter circulated on social media by Chubb Life Insurance Myanmar Limited, the company has submitted a letter to the Insurance Business Regulatory Board requesting the company to surrender its insurance license and close its representative offices due to the challenges it faces in its operations and the economic environment.
In order to avoid harming the interests of customers and to prevent claims, the company said it would suspend and cancel all insurance policies sold from December 15.
For policies valid until December 15, 100 percent of the premiums paid will be refunded or, if applicable, the policy terms and conditions will be adjusted accordingly, the company said.
The company's decision to liquidate and withdraw is not a failure of the customers, but a failure of the company. When the customers fail to pay their premiums in full, all premiums are lost, and there is no compensation from the company in the event of default, and there are also questions and criticisms about the fact that the company will only return the premiums after the deductible has been paid.
In the insurance industry, selling insurance is about selling trust, and an insurance representative believes that such a foreign investment company's withdrawal has repercussions for the insurance industry.
"Chubb is in the top five here. There is a tier in the market, like Chubb, AIA, Daiichi, and Manulife. When this situation happens, people are confused. Insurance agents sell trust. The insurance industry here was popular here less than ten years ago. Recently, people have started to trust. When they leave, it affects the insurance communities in a more or less way. Customers also have questions. And as I said earlier. If you take into account inflation, the amount you get now is less than the amount you used to pay. This is also a challenge for an insurance agent when a customer asks about it. This is something we need to prepare for," an insurance agent commented.
He continued by saying that in the current situation, it can only depend on the information agreed upon between the company and its customers.
"Even a local company has to go through a series of steps to liquidate the company, which takes at least four to five months. Now that it is an international insurance company, it seems that it is sensitive to its image. They also have to deal with the settlement of accounts. And it will take a long time. And like banks, if you have an insurance company, you have money that is kept by the ministry. How the ministry manages it for the customers. And the contract signed between the company and the customers. We have to look at those too," said an insurance agent.
In addition, although 100 percent of the money is returned to the customers to protect the company’s image, it is said that the customer is left without protection.
Some insurance agents said that instead of asking the insured to return the money, they should ask if they can transfer it to another insurance company and then accept the transfer.
"Rather than getting a refund, you can ask to transfer your insurance to another strong company. It is more traditional to arrange for another company to take over if a company leaves. Instead of getting a refund, ask "Which other company will continue to be responsible for my insurance term and benefits?". While an international company may want to show their commitment by returning 100 percent of the premium, you should always be aware of the potential for a "loss of protection" for the insured," an insurance agent wrote on social media.
A well-known American life insurance company with over 200 years of history should be more responsible and clearer about its responsibilities, wrote a life insurance policyholder on social media.
"Chubb, which has been in business for over 230 years and has branches in over 50 countries, should have informed its clients officially and acted responsibly if it could not continue its business for any reason. A company that talks about risk management is now suspending its business with a letter on plain paper without even a letterhead. It is not smart. It is very ugly. We bought insurance just to be protected, so not getting insurance cover is not fair to us," said a life insurance policyholder.
Even if the company refunds 100 percent of the money, there are criticisms that it is causing losses to the insured if we consider the current inflation rate.
Insurance companies operating directly with foreign investment in Myanmar include Chubb, AIA, DAI-ICHI, Prudential, and Manulife.
Insurance companies that have joint ventures with foreign investment and local investment include CB life, Capital Taiyo, Grand Guardian and Nippon life.
Domestic investment insurance companies include KBZ Life, Aung Thit Sar Oo, Aung Myint Mo Min, First National Insurance, Ayeyar Myanmar, Global Life, Young Insurance, A Life and Excellence Fortune Life, and the state-owned insurance company is Myanma Insurance.
