FROM STRAITS TIMES JOURANALIST:
I understand Income is offering 5-10% loyalty discounts, as well as 10% discount if customers come direct to you (bypassing broker).
How has the promotion been in terms of success so far? What is your exact market share this year, compared with last year?
We offer a discount of 10% for a motorist who register with us and take the motor insurance directly with us, i.e they do not go through an insurance agent.
This direct discount of 10% incorporates the loyalty discount of 5% or 10%. The "direct" motorist receive a total discount of 10%, inclusive of the loyalty discount of 5% which is given to a motorist who stays with us for 3 years and 10% for 7 years or longer.
We have received extremely good response for the direct channel.
The number of direct motorists increased from 15,200 at the beginning of 2005 to 21,800 now. It now represents 14% of all motor cars insured with us. The other 86% are brought in by our insurance agents.
Earlier this year, an average of 300 cars insured directly each month. After the introduction of the 10% discount, the number than insure directly has increased by more than 3 times. In September, 1,100 motorists insure their cars directly with us.
We also offer the same 10% discount for motor cycles and commercial vehicles that insure directly. They also received good response. I do not have the figures for these two category of vehicles that are insured directly with us.
We believe that more motorists will choose to insure directly with us in the future. We have a network of seven branches located all over Singapore. They can also call us directly over the telephone. We will arrange for the policy document to be sent to their home for a small administration fee of $5.
The 10% discount represents an average saving of $80, based on an average premium of $800 for a motor car. If the premium is higher, the saving is more substantial.
Our market share of motor insurance has dropped from 42% last year to 39% now. This drop of 3% is contributed by the following factors:
- a few insurers have aggressively reduced their premium rates to match or go below our competitive rates.
- many people are scrapped their old cars to buy new cars this year due to the low COE. They are compelled to insure with another insurer through a tied arrangement with the distributors for the first year.
- some insurance agents diverted the motor insurance to other insurers, as they are unhappy with our direct channel.
We are confident that our market share will increase next year for the following reasons:
- many motorists who bought new cars will come to us when they renew their insurance on the second year
- our competitors will not be able to sustain the low premium rates, as they have not been able to manage their repair cost effectively.
- more people will come to us to enjoy the 10% discount
Our special discount of 10% for motorists who insure directly will apply up to the end of this year only. We may reduce the direct discount to 5% from next year.
To enjoy this 10% discount, the motorists can call our hotline now, and register with us before th end of this year.
Tan Kin Lian
CEO, NTUC Income
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