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A Matter of Risks

Insurance in Malaysia, 1826-1990

Lee Kam Hing

Publication Year: 2012

The insurance industry in Malaysia is a large and important sector of the economy in terms of capitalisation, business turnover, assets, and the number of employees. It was integral to early Western economic expansion into Malaya, underwriting shipping, mining, and plantation ventures to protect entrepreneurs from excessive risk. The scope of the insurance business then broadened to cover fire risks, motor insurance, and workmen's compensation, while war risk coverage helped ensure that the economy continued to function during the 1940s and 1950s. After 1957, the social and political environment of independent Malaysia offered new directions for the insurance industry. A Matter of Risk shows how insurance companies established themselves in an unfamiliar environment, marketed new products, responded to diverse demands and safeguarded market share and profit against competition. Local firms faced a major challenge as overseas insurance companies moved from agency offices to the setting up of branches, taking over or collaborating with existing companies, and eventually incorporating themselves as local companies. The study looks at the role of tariff associations and insurance trade organisations such as Persatuan Insuran Am Malaysia (General Insurance Association of Malaysia) in maintaining order in the industry through self-regulation.

Published by: NUS Press Pte Ltd

Half title, title, copyright page

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pp. v

List of Tables

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pp. vi-x

List of Appendices

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pp. xi

List of Abbreviations

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pp. xii-xiii

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pp. xiv-xvi

This book was completed with the support of the General Insurance Association of Malaysia (Persatuan Insurans Am Malaysia, or PIAM). In 1993, the association decided that there should be two studies to help students and the general public understand the role and contribution of the insurance industry in...

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pp. 1-10

In July 1948, following a series of attacks on Malayan rubber estates and tin mines by armed members of the Malayan Communist Party, there were reports that insurance companies were seriously considering withdrawing the underwriting of riot and civil commotion risks in Malaya. Insurers had become alarmed at the deteriorating...

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Chapter 1: Emerging New Markets, 1786–1883

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pp. 11-48

The first evidence of insurance business being carried out in Malaysia can be traced to agency houses in India and the Straits Settlements in the early nineteenth century. These merchant houses played a vital role as agents to overseas insurance companies. At this time, insurance companies in the West, especially Britain,...

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Chapter 2: Establishment of Local Insurance Companies: 1883–1907

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pp. 49-96

It was in the last quarter of the nineteenth century that the first local insurance companies were set up in Malaya. Three such companies were formed, and the timing and conditions seemed favourable for their emer-gence. There was an expansion of world trade, the arrival of steamships, and the creation of...

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Chapter 3: A Broader Role in Society,c. 1908–41

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pp. 97-134

The colonial authorities and insurance companies had common areas of concern, and during the early period of insurance the shared interests that were publicised were firefighting services, the growing use of motor vehicles, and the safeguarding of workers’ losses resulting from injury or death during work...

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Chapter 4: Embracing Risk, c. 1908–41

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pp. 135-174

At the beginning of the twentieth century, rapid social and economic development in Malaya opened up a larger number and wider range of risks to be underwritten by insurance companies. The most important sectors in this respect were the export industries of tin and rubber. Major agency houses moved from...

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Chapter 5: Cooperation and Competition, 1908–41

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pp. 175-219

There were two significant developments in the insurance industry in Malaya in the early decades of the twentieth century. The first was that overseas insurance companies set up branch offices or placed their own officers in agency houses in the...

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Chapter 6: Expanding Networks in Insurance and Business, 1908–41

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pp. 220-283

As the first local efforts in underwriting of risks were being wound up in the late 1800s and early 1900s, four new insurance companies were started in Singapore: Great Eastern Life Assurance Company, Eastern United Assurance, Overseas Assurance Corporation (OAC) and Asia Insurance Company. Eastern...

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Chapter 7: The War Years, 1941–5

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pp. 284-318

The Second World War created a difficult situation for the insurance industry in Malaya, one that it had never faced before. The extent of potential destruction and losses arising from armed conflict were risks that insurance companies were unwilling and unable to take up entirely. Therefore, the governments in Malaya..

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Chapter 8: Post-war Recovery, 1945–8

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pp. 319-355

The war in the Pacific ended earlier than Allied war planners had expected. The protracted military offensive to re-occupy Malaya that could have resulted in extensive destruction was hence avoided. By early September 1945, the first British troops had landed on Malaya’s west coast. During the immediate post-war period...

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Chapter 9: The Emergency: IncreasingRisks and Contingency Planning, 1948–60

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pp. 356-391

Insurance had become such an integral part of Malaya’s economy that when it appeared likely in 1948 that commercial insurers might, because of the deteriorating security situation, withdraw the underwriting of certain categories of risk, business communities and the government became very concerned. It was felt...

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Chapter 10: Consolidation of the Insurance Industry, 1948–65

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pp. 392-430

Amidst political changes in Malaya and the region, 1948−65 was a period of transition for the insurance industry. Political uncertainties in surrounding states were as much a concern to some insurers. There was conflict in China, French Indo-China and later in the Korean Peninsula. In neighbouring Indonesia, Republican...

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Chapter 11: Insurance Enactments, 1960−5

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pp. 431-465

In 1963, the governments of the newly independent Federation of Malaya and self-ruling Singapore each passed a major insurance act. The acts in the two territories did not differ much from each other. There were three major considerations that guided the governments: first, to ensure that policyholders were...

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Chapter 12: Endeavours towards a National Direction, 1964–90

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pp. 466-512

The Insurance Act 1963 did not lead to a full Malaysianisation of the insurance industry. This was to come through subsequent amendments to the act and the granting of incentives to the industry. There were two major phases of change: In the first, there was a transfer of ownership from foreign to Malaysian, while in the...

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pp. 513-517

The two closing chapters have shown how the insurance industry in Malaysia had by 1990 become largely Malaysian. For almost 200 years, since the underwriting of risks in the country began, the industry had been foreign-dominated. Several years after Independence, the majority of insurers—both general and life—were...


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pp. 518-536


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pp. 537-612


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pp. 614-627


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pp. 628-647

E-ISBN-13: 9789971696184
Print-ISBN-13: 9789971694609

Page Count: 480
Illustrations: 20 images
Publication Year: 2012

Edition: New