CORPORATE NEWS

SPEECH BY Y.B. DATO' CHAN KONG CHOY, DEPUTY FINANCE MINISTER IN CONJUNCTION WITH THE OFFICIAL LAUNCH OF LONPAC E-ASSIST BY LONPAC INSURANCE BHD ON 30 OCTOBER 2001, 11.30 AM, AT THE JW MARRIOTT HOTEL, KUALA LUMPUR

Y.Bhg. Tan Sri Dato' Dr. Teh Hong Piow
Chairman of Lonpac Insurance Bhd

Mr Tee Choon Yeow
Chief Executive Officer of Lonpac Insurance Bhd

Distinguished guests, Ladies and Gentlemen

It is my pleasure to be present at the official launch of the Lonpac E-Assist programme. This latest initiative by Lonpac reflects the burst of new customer-centric strategies emerging within the insurance industry that emphasise customer satisfaction. It also reflects an increasing focus among insurers on customer retention programmes as the key to achieving new growth and improved results. These are positive developments that augur well for the insurance industry's development towards international best practices and standards. Let me therefore take this opportunity to commend the management of Lonpac for their vision and entrepreneurial spirit.

I understand that Lonpac E-Assist is a complimentary 24-hour emergency car assistance programme provided to its policyholders that entitles them to free minor roadside repairs and emergency towing services up to a specified amount. Apart from its obvious physical convenience to vehicle owners and drivers, such services also provide emotional relief to vehicle owners and drivers who may find themselves stranded and in need of immediate assistance. This may well be the greatest attraction of the programme. I am told that since their introduction into the domestic market, emergency assistance services have very quickly gained increasing popularity with many insurers joining in the bandwagon in efforts to serve their customers better.
Ladies and Gentlemen,

Customer-centric initiatives such as the Lonpac E-Assist programme spring from a fundamental belief that customers represent the most important assets of an organisation. This is true for any commercial enterprise. While leading organisations in more developed markets have long understood this, their counterparts in emerging markets have generally been slower to respond strategically. However, this is set to change as insurers in Malaysia brace themselves to meet the challenges of increasing consumerism.

The new wave of information availability has empowered consumers today to make informed decisions about their selection of insurance providers. Both the depth and reach of information continues to improve tremendously. Through the internet, consumers literally have at their fingertips comparative financial, price and service information. I am told there are even information portals today that provide information on how to interpret misleading sales pitches, how to file a complaint against an insurer or its agent, and even how to collect a claim against an insurer that won't pay.

Consumer behaviour patterns themselves are also changing dramatically. With the significantly enhanced ability to compare price and service standards, the expectations of insurance consumers are increasingly being shaped by the service levels demonstrated by other firms that they interact with, which may not necessarily be insurance or even financial service providers. The successful service models of leading international corporations have raised the expectations bar for all commercial enterprises, irrespective of industry. As a result, superior service in specific industries is creating commensurate demand for similar service standards in multiple industries, including insurance.

Lonpac has clearly risen to the challenge. By expanding its scope of services to meet the needs of its customers, not only are consumers served better, Lonpac stands to gain considerably from the intangible benefits that will accrue in terms of reputational goodwill and customer retention.

Ladies and Gentlemen,

There is lifetime value inherent in customers that can be unlocked simply by professional, innovative and responsive customer service. This is especially true for service industries like insurance. For individual insurers, that value lies in the form of policy renewals, up-sells, cross-sells and referrals generated over the customer's lifetime. For the industry, that value lies in reshaping public perception of the insurance industry, which in turn reaps economic and social benefits both for the players in the industry as well as society at large.

On that note, I congratulate Lonpac on the achievement of yet another milestone in the company's excellent track record in sound and dynamic management. It is now my pleasure to officially launch Lonpac E-Assist.

Thank you.