FACULTY OF COMPUTER AND MATHEMATICAL

SCIENCES

UiTM SHAH ALAM

ASC600

ACTUARIAL PRACTICE FOR LIFE INSURANCE AND TAKAFUL

GROUP ASSIGNMENT

CS2426D

1. AQIL HAZIQ BIN 2024542707

2. ILHAN FAEZ BIN AZAHARULAZHAR 2024905175

3. ADRY ZAFRI BIN ZAHARUDDIN 2024530771

PREPARED FOR:

DR SYAZREEN NIZA BINTI SHAIR DAN AIDA YUZI BINTI YUSOF

1
Table of Contents

Introduction​ 3
Valuation Data​ 5
Methodology​ 11
Analysis and Results​ 17
Conclusion​ 21
References​ 22

2
Introduction

AIA company background

AIA Group is a leading insurance and financial services company headquartered in Hong
Kong. It was originally founded in December 1919 in Shanghai by Cornelius Vander Starr as
American Asiatic Underwriters, and later moved its headquarters to Hong Kong in 1947. AIA
operated as part of AIG until 2009, before being independently listed on the Hong Kong
Stock Exchange in October 2010, raising US$20.5 billion in one of the world’s largest IPOs
at the time.

Since then, AIA has expanded its presence across 18 markets in Asia-Pacific, including
Malaysia, Singapore, China, Thailand, Vietnam, Indonesia, the Philippines, Australia, and
India through a joint venture. The company provides a wide range of products such as life
and health insurance, accident and disability cover, employee benefits, pension services,
family takaful, and financial planning solutions tailored to the diverse needs of its customers.

Over the years, AIA has strengthened its market position through strategic acquisitions, such
as the purchase of ING’s Malaysian insurance business in 2012 and Sovereign Assurance in
New Zealand in 2018. As of 2023, AIA managed assets of approximately US$286 billion,
serving more than 42 million individual policyholders and 18 million group scheme members
worldwide. In Malaysia, AIA Bhd. has been active since 1948 and currently manages
RM66.10 billion in assets with over 5.2 million customers.

Financially, AIA has continued to demonstrate strong growth. In the first quarter of 2024, the
company reported a 31% increase in new business value, supported by robust performance
in China and Hong Kong. It also announced an additional US$2 billion share buyback
programme, further showcasing its financial strength and commitment to shareholder value.

At AIA, the purpose is clear: to help people live healthier, longer, better lives. Guided by this
vision, AIA launched the “AIA One Billion” initiative to engage one billion people in health
and wellness activities by 2030. With a focus on empowering communities and building
sustainable futures, AIA continues to shape the insurance industry in Asia by combining its
century-old legacy with forward-looking innovation.

3
AIA Life Insurance product

●​ A-Life ProtectTerm: Affordable term life insurance plan that provides financial
protection for your loved ones in the event of death or Total and Permanent Disability
(TPD). Flexible coverage amounts and policy terms are available to suit individual
needs.
●​ A-Life Lady360: A comprehensive plan designed exclusively for women, covering
female-specific critical illnesses, pregnancy complications, and female cancer
benefits, ensuring financial support during challenging times.
●​ A-Life Beyond Critical Care: A critical illness plan that offers protection against
more than 180 conditions, including early, intermediate, and advanced stages of
critical illness. Provides continuous coverage even after multiple claims.
●​ A-Life Link 2: An investment-linked insurance plan combining life protection with
investment opportunities. Policyholders can enjoy protection while growing their
wealth through a range of professionally managed funds.
●​ A-Life Kasih Famili: A family takaful plan that provides protection against death,
TPD, and accidental causes, ensuring family members are financially supported.
Offers affordable contribution options starting from low monthly payments.
●​ A-Life Med Regular: A medical insurance plan that covers hospitalization and
surgical expenses. Includes annual limits, lifetime coverage, and options for
upgrading to higher benefits
●​ A-Plus Waiver: A rider that ensures future premiums are waived if the policyholder is
diagnosed with a critical illness or suffers TPD, keeping the policy active without
financial burden.
●​ A-Plus Med Booster: A medical rider that provides extra coverage by topping up
hospitalization benefits when the annual limit is exceeded.

4
Valuation Data

This analysis delves into the valuation of insurance policies for a company operating within
the fiscal year 2024. The assessment focuses on the calculation of policy reserves, utilizing
the Modified Net Premium Reserve method, and the examination of various insurance policy
types. The Insurance Act of 1996 serves as the regulatory framework for this evaluation.

The valuation process involved the compilation and tabulation of data from 130 distinct
insurance policies. Key data points included the policyholder’s gender, age at issue, policy
type, policy and premium term, and other relevant details. Policy reserves were calculated
based on the policy type, adhering to the Malaysian Statutory Minimum Reserve
Requirement. The DGI 1996 Mortality Table, with a three-year reduction for female lives, was
employed for these calculations.

Three primary insurance policy types were analysed: whole life insurance, endowment
insurance, and term insurance. These policies shared common characteristics, such as the
payment of death benefits at the end of the year of death and the assumption of active
policies as of December 31, 2024. The maximum sum assured per policy was limited to
RM200,000.

The Modified Net Premium Reserve method was used for policy valuation. This method was
further divided into non-participating and participating policies. While nonparticipating
policies did not include bonus components, participating policies offered Simple
Reversionary Bonus (SRB) and Compound Reversionary Bonus (CRB). All participating
policies were assumed to receive a reversionary bonus at a rate of 4% annually.

The Insurance Act of 1996 mandated the use of the Full Preliminary Term Reserve (FPT)
and the Zilmerised Reserve for reserve valuation. These methods were applied to ensure
accurate calculations based on the policyholder’s profile and the specific characteristics of
each insurance type.

5
Insurance Policy Types Numbe Total
r of number of
Policies Policies
Non participating 14
Simple
Participating Reversionary​ 9
Whole Life Bonus (SRB) 40
Compound
Reversionary 17
Bonus (CRB)
Non participating 19
Simple
Participating Reversionary​ 8
Term Bonus (SRB) 40
Compound
Reversionary 13
Bonus (CRB)
Non participating 11
Simple
Participating Reversionary​ 12 40
Endowment Bonus (SRB)
Compound
Reversionary 17
Bonus (CRB)

6
 PROFILE OF POLICYHOLDERS

POLICY GENDER AGE AT POLICY POLI SUM PREMIU TYPE OF BONUS TIME SINCE
NO ISSUE TYPE CY ASSURE M TERM, BONUS % INCEPTION,
TER D h t
M, n

1001 M 47 Whole N/A 152483 35 CRB 4.00% 9

Life

1002 F 21 Whole N/A 143983 5 CRB 4.00% 8

Life

1003 M 48 Whole N/A 149752 35 Non-Par N/A 6

Life

1004 M 50 Whole N/A 94896 10 CRB 4.00% 6

Life

1005 F 29 Whole N/A 81295 30 Non-Par N/A 8

Life

1006 M 53 Whole N/A 110689 10 SRB 4.00% 5

Life

1007 F 48 Whole N/A 21111 10 Non-Par N/A 5

Life

1008 F 42 Whole N/A 47504 20 Non-Par N/A 13

Life

1009 M 31 Whole N/A 142874 10 Non-Par N/A 5

Life

1010 M 44 Whole N/A 18155 25 SRB 4.00% 8

Life

1011 M 32 Whole N/A 49384 5 Non-Par N/A 4

Life

7
1012 F 26 Whole N/A 122561 20 CRB 4.00% 10
Life

1013 M 53 Whole N/A 57254 20 CRB 4.00% 12

Life

1014 F 22 Whole N/A 31918 10 CRB 4.00% 6

Life

1015 F 51 Whole N/A 95981 5 Non-Par N/A 11

Life

1016 F 44 Whole N/A 40306 20 SRB 4.00% 12

Life

1017 M 33 Whole N/A 157718 20 CRB 4.00% 14

Life

1018 F 23 Whole N/A 56843 15 Non-Par N/A 11

Life

1019 M 31 Whole N/A 130975 15 CRB 4.00% 8

Life

1020 F 43 Whole N/A 106601 10 CRB 4.00% 9

Life

1021 F 50 Whole N/A 117512 15 CRB 4.00% 2

Life

1022 M 26 Whole N/A 157443 5 SRB 4.00% 13

Life

1023 F 40 Whole N/A 121472 5 Non-Par N/A 5

Life

1024 M 54 Whole N/A 143121 15 SRB 4.00% 8

Life

1025 M 45 Whole N/A 172688 15 SRB 4.00% 3

Life

8
1026 F 48 Whole N/A 113727 10 Non-Par N/A 10
Life

1027 F 58 Whole N/A 122893 20 SRB 4.00% 5

Life

1028 F 40 Whole N/A 30932 20 SRB 4.00% 13

Life

1029 M 38 Whole N/A 127796 5 CRB 4.00% 7

Life

1030 F 29 Whole N/A 39855 25 CRB 4.00% 9

Life

1031 M 56 Whole N/A 184088 20 Non-Par N/A 4

Life

1032 M 58 Whole N/A 17400 10 Non-Par N/A 7

Life

1033 F 49 Whole N/A 127858 10 Non-Par N/A 7

Life

1034 F 55 Whole N/A 183714 10 Non-Par N/A 6

Life

1035 F 44 Whole N/A 25151 20 CRB 4.00% 2

Life

1036 F 42 Whole N/A 192479 10 CRB 4.00% 9

Life

1037 M 40 Whole N/A 76690 10 CRB 4.00% 4

Life

1038 M 19 Whole N/A 14499 15 SRB 4.00% 13

Life

1039 M 26 Whole N/A 16295 25 CRB 4.00% 15

Life

9
1040 M 30 Whole N/A 130885 5 CRB 4.00% 14
Life

1041 M 60 Endowm 21 136071 15 SRB 4.00% 9

ent

1042 F 28 Endowm 17 69040 20 CRB 4.00% 3

ent

1043 M 39 Endowm 20 22183 15 SRB 4.00% 3

ent

1044 M 29 Endowm 16 170371 5 CRB 4.00% 6

ent

1045 F 40 Endowm 24 153946 10 Non-Par N/A 14

ent

1046 M 22 Endowm 23 126336 10 CRB 4.00% 9

ent

1047 M 57 Endowm 19 42711 5 Non-Par N/A 2

ent

1048 M 35 Endowm 20 15539 35 CRB 4.00% 10

ent

1049 F 32 Endowm 18 194423 10 CRB 4.00% 8

ent

1050 F 42 Endowm 24 189426 10 Non-Par N/A 4

ent

1051 F 31 Endowm 21 136063 10 CRB 4.00% 13

ent

1052 M 39 Endowm 23 143629 10 CRB 4.00% 2

ent

1053 M 22 Endowm 21 48360 20 Non-Par N/A 12

ent

10
1054 M 37 Endowm 15 143272 5 Non-Par N/A 8
ent

1055 F 45 Endowm 15 188047 15 CRB 4.00% 9

ent

1056 M 47 Endowm 23 31357 10 CRB 4.00% 4

ent

1057 M 48 Endowm 23 129121 15 SRB 4.00% 4

ent

1058 M 37 Endowm 18 87505 5 CRB 4.00% 4

ent

1059 F 19 Endowm 23 12869 15 SRB 4.00% 2

ent

1060 F 49 Endowm 17 60108 10 Non-Par N/A 14

ent

1061 M 45 Endowm 21 122296 5 CRB 4.00% 14

ent

1062 M 38 Endowm 20 104179 5 SRB 4.00% 4

ent

1063 F 39 Endowm 22 100272 15 Non-Par N/A 11

ent

1064 F 20 Endowm 23 48467 20 SRB 4.00% 8

ent

1065 M 50 Endowm 19 33328 10 Non-Par N/A 11

ent

1066 F 26 Endowm 15 101412 10 SRB 4.00% 9

ent

1067 M 28 Endowm 17 145059 20 CRB 4.00% 12

ent

11
1068 F 52 Endowm 24 68871 20 Non-Par N/A 12
ent

1069 F 34 Endowm 22 163471 15 CRB 4.00% 8

ent

1070 F 55 Endowm 20 138391 10 CRB 4.00% 13

ent

1071 F 37 Endowm 22 187286 20 SRB 4.00% 8

ent

1072 M 35 Endowm 23 96416 10 SRB 4.00% 4

ent

1073 M 30 Endowm 18 80271 10 SRB 4.00% 10

ent

1074 M 51 Endowm 15 54064 5 CRB 4.00% 3

ent

1075 F 29 Endowm 15 117450 20 CRB 4.00% 15

ent

1076 F 33 Endowm 24 181890 20 SRB 4.00% 14

ent

1077 M 57 Endowm 18 186597 10 SRB 4.00% 4

ent

1078 M 55 Endowm 21 29830 15 Non-Par N/A 13

ent

1079 F 42 Endowm 16 158501 15 CRB 4.00% 11

ent

1080 M 31 Endowm 17 147965 10 Non-Par N/A 6

ent

1081 F 20 Term 15 126381 30 CRB 4.00% 13

12
1082 F 42 Term 19 57333 20 Non-Par N/A 7

1083 F 23 Term 15 144508 35 Non-Par N/A 5

1084 F 46 Term 22 86213 20 Non-Par N/A 14

1085 M 44 Term 15 146967 10 Non-Par N/A 15

1086 M 38 Term 15 160810 15 Non-Par N/A 15

1087 M 50 Term 16 40746 20 CRB 4.00% 14

1088 M 57 Term 16 59377 5 CRB 4.00% 2

1089 M 49 Term 20 189476 5 CRB 4.00% 14

1090 F 52 Term 21 64045 10 Non-Par N/A 4

1091 F 26 Term 19 107888 20 Non-Par N/A 11

1092 F 60 Term 15 180862 10 CRB 4.00% 15

1093 M 42 Term 15 117455 25 CRB 4.00% 2

1094 M 39 Term 17 146672 5 Non-Par N/A 4

1095 M 22 Term 16 103179 5 CRB 4.00% 11

1096 F 40 Term 19 181836 5 SRB 4.00% 7

1097 M 43 Term 24 55714 5 SRB 4.00% 9

1098 F 31 Term 20 197907 15 SRB 4.00% 13

1099 F 39 Term 21 112946 15 Non-Par N/A 6

1100 M 25 Term 18 119616 30 CRB 4.00% 12

1101 M 22 Term 21 115983 5 Non-Par N/A 13

1102 M 51 Term 22 197563 5 Non-Par N/A 5

1103 F 42 Term 15 134123 5 Non-Par N/A 14

1104 M 28 Term 20 159661 10 Non-Par N/A 12

13
1105 F 34 Term 22 53484 15 CRB 4.00% 12

1106 F 52 Term 19 92989 5 SRB 4.00% 3

1107 M 32 Term 18 46212 10 CRB 4.00% 10

1108 M 56 Term 16 53525 5 SRB 4.00% 5

1109 M 35 Term 20 188274 20 Non-Par N/A 13

1110 F 28 Term 20 173707 20 CRB 4.00% 12

1111 F 26 Term 15 73208 5 CRB 4.00% 5

1112 F 35 Term 23 43828 5 Non-Par N/A 5

1113 M 19 Term 20 159783 5 SRB 4.00% 8

1114 F 50 Term 17 13420 5 CRB 4.00% 10

1115 F 44 Term 18 106752 10 SRB 4.00% 10

1116 M 47 Term 18 141373 15 Non-Par N/A 8

1117 M 37 Term 17 186308 20 Non-Par N/A 11

1118 M 51 Term 24 125294 10 Non-Par N/A 2

1119 F 19 Term 17 195312 25 SRB 4.00% 10

1120 M 43 Term 17 134019 15 Non-Par N/A 9

14
Methodology

The funds that insurers set aside as a reserve serves as a safety net against catastrophic
and unforeseen events and covers potential loss exposure, including obligations for unpaid
premiums and the estimated costs of unpaid claims happenings. A reserve is essential to
preserving the insurance company's financial stability, which if there is not enough money
set aside, it may go bankrupt if current claim losses are too high to be met by premium
revenue. The Modified Net Premium Reserve approach is used to make sure the insurers
have a sufficient claim reserve. Modified Net Premium Reserve is divided into two categories
which are participating policies, which give policyholders a portion of the company's profits in
the form of bonuses, and non-participating policies, which do not. The general following is
the formula for both policies:

15
Simple Reversionary Bonus (SRB) and Compound Reversionary Bonus (CRB) are two types
of vested bonuses available under participating policies. The following is the formula for both
bonuses:

●​ Simple Reversionary Bonus (SRB)

​ B = [1 + (t - 1)r]

​ (S + B) = (S + [1 + (t - 1)r])

●​ Compound Reversionary Bonus (CRB)

Where,

●​ t = Reserve during inception

●​ r = Bonus percentage

​ Calculating reserves is essential to ensuring that the insurer has enough cash on
hand to cover its future commitments and policyholder claims. To accomplish its mission,
Bank Negara Malaysia (BNM) has set the Statutory Reserve Requirement (SRR) ratio at
2.00%. Financial intermediation. After that, the updated net premium will be calculated using
either the Zellmerized Reserve or the Full Preliminary Term Reserve (FPTR).

16
Full Preliminary Term Reserve

​ The method consists of two modified net premium, the cost insurance, denoted by

and the renewal premium,

​ The renewal premium is determined by treating the premium for a life that is one
year older. If the issuance age is x, then it must be calculated using the life age x + 1.

17
Zillmerised Reserve

​ This method uses the sum assured to compute the initial expenditure in the first year,
let's say I. We'll use the 3% Zillmer to calculate me.

​ The excess cost amortized for each year is then calculated. We assume that the
amortization of I over the premium payment period corresponds to the insurance term as
specified by the Malaysian Insurance Act.

Let Y = amount of amortized each year;

18
Then, determine the modified premium, using the following formula;

●​ = Net premium + Amount of excess expenses amortized each year

Then, determine the cost of insurance, using the following formula;

●​

19
 Choose the approach with the lower modified net premium value to ensure the
maximum reserve value is met and to comply with the Statutory Reserve Requirement.
Compare the modified net premium results from the FPT and Zillmer methods. Following
selection, the Net Level Premium Reserve (NLPR) formula is used to determine the proper
amount of reserve, which is:

●​ Reserve = Value of Future Benefit − Value of Future Premium

●​ Net Level Premium Reserve:

●​ Modified Net Premium Reserve

20
Analysis and Results

In order to ascertain the company's maximum reserve value in 2024, a thorough evaluation
of 130 active policyholders will be carried out utilizing the Modified Net Premium Reserve
approach, which combines the Full Preliminary Term and 3% of Zilmer's methods. The goal
is to minimize the modified premium while keeping precision in order to maximize the
reserve. Three types of life insurance policies will be covered by this valuation: whole life,
endowment, and term. Both kinds of bonuses will be subject to a fixed vested bonus of 4%
annually. To guarantee accuracy in the reserve estimates, computations will be carried out
using Microsoft Excel, and the outcomes will be examined using table findings.

Whole life insurance policy

​ Whole life insurance, a kind of permanent life insurance, has both a death benefit
and a cash value component and provides continuous coverage, typically until age 100, at
set premiums. The policy guarantees the payment of the death benefit to recipients, giving
family members financial stability as long as premiums are paid. The computed reserves for
40 active whole life plans for the current year are displayed in the table below.

Table 4.1 Overall reserve analysis for whole life insurance policies

​ As result in the table above, the total reserve calculated for the whole life insurance is
RM 1385639.18. This amount is the sum of money set aside by an insurance provider to
cover future claims and policy requirements. Accordingly, the corporation must set aside an
average of RM 34640.98 each insurance to guarantee that it has the appropriate amount of
reserves that is stable.

21
​ Based on the table above, number policy 1061 shows the highest reserve value with
RM 143727.64. The policyholder is a 30 years old male with 5 years premium payment and
type of policy is compound reversionary bonus of 4% and with sum assured amounting RM
130885. Then, the lowest reserve is calculated for policy number 1035 with RM 835.67. The
policyholder is a 44 years old female, and the type of policy is a compound reversionary
bonus of 4% with 20 years premium payment.

​ The average reserve for 2024 shows the difference in value between the reserve for
participating and non-participating. The average reserve for non-participating policy is RM
27062.75. The average reserve for participating policy under simple reversionary bonus is
RM 34281.28 and under compound reversionary bonus is RM 36788.63.

Endowment insurance policy

​ An endowment policy is a kind of life insurance that has a protection and savings
component. In the event that the policyholder dies or a certain term expires, it is intended to
pay out a lump sum. The policyholder invests the premiums to gradually increase their cash
worth over the course of the policy's life or within a specified time frame. In addition to the
sum insured and any accrued bonuses or interest, the policyholder receives the maturity
benefit if they live out the period. In addition to any accrued bonuses, the beneficiaries
receive the sum promised if the policyholder passes away before the term is up.

​ Endowment policies offer insurance coverage and are frequently used to save for
particular financial objectives, including retirement or college finance. The reserves
determined for the 40 active endowment policies during the 2024 financial year are shown in
the table below.

​ Table 4.2 Overall reserve analysis for endowment insurance policies

22
 In the table above, the total reserve calculated for the endowment policies for the
year 2024 is RM3292045.08 . This figure indicates that the business would need to set aside
this sum of money in order to guarantee that it could pay any claims. According to the above
computation, the company must save up to RM82301.13 each policy in order to remain
solvent.

​ Next, the table also highlighted the highest reserve value at RM 313219.08 for policy
number 1061. The 45-year-old male policyholder only paid premiums for the first 5 years
when he signed up for a 21-year endowment insurance. The policy, which is a compound
reversionary bonus, has been in place for 14 years with a RM122296.00 sum insured.
However, the lowest reserve is determined to be RM839.23. This is for insurance number
1059. The policyholder is a 19-year-old woman. The policy, which is a simple reversionary
bonus endowment insurance is the type of policy with only paid premiums for the first 15
years when she signed up for a 23-year endowment insurance that has been in place for 2
years with a RM 12869.00 sum insured.

​ The average reserve for 2024 shows how taking a non-participating policy differs
from taking a participating policy. RM58146.55 is the average reserve for non-participating
policies. However, the average reserve for the basic reversionary bonus and compound
reversionary bonus under the participating policy is RM59071.00 and RM114328.30,
respectively.

Term insurance policy

​ A term insurance policy is a kind of life insurance that provides policyholders with
monetary protection for a predetermined amount of time. This is the most basic type of life
insurance; the policyholder pays a premium for a predetermined amount of time, and the
insurance company will pay the beneficiaries if they pass away within that time frame. Since
a term insurance policy only offers a death benefit, it differs from other kinds of insurance
policies. The insurance expires and loses all of its value unless it is renewed or converted,
and no benefits will be paid out if the insured lives through the designated term period.

​ Term insurance has no profit or savings component, making it a pure life insurance
policy. Given that term insurance is the most basic plan, this policy is the more cost-effective
choice because its premium is lower than that of other life insurance plans. The estimated
reserves for 40 active term insurance contracts for the current year are shown in the table
below.

23
​ ​ Table 4.2 Overall reserve analysis for term insurance policies

​ The total reserve determined for the term insurance policies is RM 393361.12, as
shown in the table. This figure is comparable to the sufficient sum that the insurance
provider needs to reserve in order to cover any unforeseen future claims. In addition, the
previous computation shows that in order to keep the company profitable, the insurer needs
to save RM 9834.03 for each policy.

​ The data also reveals that policy number 1089, which belongs to a 49-year-old male
policyholder, has the greatest reserve, totaling RM 132328.34. The insured bought a 5-year
term insurance policy with a 5-year premium term, an RM189476 sum assured, and a
compound reversionary bonus. It has been 14-years since the commencement of this policy.
At RM105.22, the smallest reserve ever recorded belonged to policy number 1091, which
was held by a female policyholder aged 26. The insured bought a 19-year term insurance
policy with a 20-year premium term, an RM107888 sum assured, and a Non-participant
bonus. It has been 11 years since the start of this policy.

​ Finally, the average reserve for all bonus kinds for term insurance policies has been
emphasized in the table. With an average reserve of RM6629.58, the term insurance policy
with the simple reversionary bonus has the largest average reserve. This is followed by the
non-participating bonus term insurance policy, which has an average reserve of
RM10082.93, and the term insurance policy with the compound reversionary bonus, which
has a lower average reserve of RM14364.28.

24
Conclusion

AIA Group has effectively sustained their ability to operate the company profitably and
establish an adequate amount of reserve. Reserve computation requires thorough and
elaborate analysis, since reserve has a huge weight in pricing the premiums. Reserves that
are too high will unnecessarily increase the price of premium while reserves that are set
unrealistically low are risking the company into insolvency.

The premium is calculated by using Modified Net Premium Reserve along with statutory
requirements from the Malaysian Insurance Act of 1996 to ensure the company complies
with the regulatory frameworks, and yet maintaining their solvency. The two techniques of
Full Preliminary Term Reserve and Zillmerised Reserve are used to help further enhance the
accuracy of reserve valuation and prepare substantial backup for unexpected future losses.

Comparing all the policies side by side, endowment insurance policy has the highest total
amount of reserve, figured at RM3,292,045.08 while covering 40 policyholders, followed by
whole life insurance policy at RM1,385,639.18 that covers 40 policyholders. There is a wide
gap dividing term insurance policy from the latter policies, with a total amount of reserve at
RM393,361.12 which covers 40 policyholders, totalling 120 policyholders for all three
insurance policies.

Through this analysis, AIA Group has clearly demonstrated its commitment to implement a
practical approach to allocate the appropriate amount of funds to assist in covering future
loss claims without jeopardizing its crucial financial stability components– liquidity, solvency,
profitability and operating efficiency. This reserve will help AIA Group pay the unforeseen
loss while preserving its staying power.

25
References

AIA Malaysia. (n.d.). Glosari istilah takaful. Retrieved September 11, 2025, from
[Link]

Pollard, C. Insurance reserves: their role in resolving injury claims. (2024, March 20). Corey
Pollard Law.
[Link]
rtance/#:~:text=An%20insurance%20company's%20failure%20to,to%20maintain%20adequa
te%20claim%20reserves

Statement on Statutory Reserve Requirement (SRR). (2020, May 5). Bank Negara Malaysia.
[Link]
Statutory%20Reserve%20Requirement%20(SRR,the%20stance%20of%20monetary%20pol
icy

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