29-09-2008: Rockwills sees huge potential in insurance trust
by Tony CH Goh, theedgedaily.com
KUALA LUMPUR: One of the country’s top estate planning companies, Rockwills International Sdn Bhd, wants to expand its range of wealth management services by going into the insurance trust market.
The primary target of this venture is the large pool of retail and individual insurance policyholders. There are currently five million insurance policies in Malaysia, with the total sum insured amounting to around RM700 billion, according to data from Bank Negara Malaysia.
“Rockwills started as a will underwriter in 1995, and we started the insurance trust when we received our trust business licence in January 2006. We are now ready to explore this large untapped market by creating awareness on the importance and advantages of having an insurance trust.
“This would be done via aggressive marketing in the next six months. We are also collaborating with insurance companies and agents to introduce this trust to the public,” its group chief executive officer Saw Leong Aun told The Edge Financial Daily in an interview.
Rockwills plans to spend at least RM300,000 to RM400,000 on advertising, besides working with established insurance players such as Prudential Assurance Malaysia Bhd and Great Eastern Malaysia Bhd to reach out to potential clients.
Some of the key features of insurance trusts are the flexibility of nominating anyone, including an unmarried partner as beneficiary, provision of an administrator for the estate, and fast and hassle-free withdrawal procedures that take only about a month compared with nine to 12 months for insurance claims.
It also provides protection in the form of estate management that is not available under conventional insurance policy.
“The ability to customise the terms to suit the needs and concerns of policyholders is the main advantage of having a trust feature incorporated into insurance,” said Rockwills Trustee general manager Azhar Ishkandar Hew.
The retail insurance trust is also affordable, with an underwriting fee of around RM900, while the annual fee for trust management ranges from 0.15% to 1% of the insured sum.
Saw dispelled the notion that trusts are meant for the wealthy, saying the middle-income and the average household could be the main beneficiaries of the proper management and advice of a trustee.
“Compared to well-off families or individuals, the majority of insurance policyholders have limited resources to protect their families or loved ones should an accident happen.
“Having a trust would ensure that the beneficiaries receive the protection needed without the worry of them squandering the limited resources that they have,” he said.
The company currently manages around RM10 million in assets, and has a total of 3,000 estate planners. As of March this year, it has written wills for close to 85,000 families. The number of insurance trust holders now stands at about 1,000, and it has set a target of 800 new customers this year.
Saw said Rockwills expanded its will-underwriting business to Singapore three months ago and obtained a trust licence last month.