Saturday, November 26, 2005

Dialogue with annuitants

I held a dialogue with our annuitants. 400 people attended.

We discussed the various series of annuities issued by NTUC Income during the past years. There was a lively Q&A session. It went well.

I told the annuitants about how the annuity pool works. All of the annuity investments are put into a pool. We invest the pool prodently to earn a fairly attractive return. Most of the surplus are used to declare bonus to the annuitants.

When we declare the bonus, our aim is to be fair to all parties. Annuitants who bought the annuity earlier and enjoyed a higher guaranteed return, will earn a lower rate of bonus. The annuitants who enjoy a lower rate of guranteed return, will enjoy a higher rate of bonus.

Our aim is to be fair to all the annuitants. We do not want to favour any group of annuitants at the expense of another group. This is the concept of pooling of risks.

The annuitants generally appreciate that we have done our best to be fair to all annuitants, and to give the best possible return to them.

The dialogue went well. It was also attended by journalists from two papers. I hope that they will cover the event.

Tip: save 10% of your monthly salary

The training manager of a large company told me that they have 5,000 employees, who earn an average of $1,500 a month. Most of them do not have any savings. They spend all of their earnings.

What is my advice for them?

Here is my reply.

- Save 10% of your monthly earnings
- You may need the savings in an emergency, eg loss of job or pay medical bill
- Do not buy a life insurance plan - it penalise you when you take out the savings
- Invest in a flexible plan, such as the Ideal plan from NTUC Income
- 100% of your savings is invested from the first month
- you can earn an attractive return, ie better than bank deposit

The training manager was convinced. He wanted to arrange for his employees to attend my educational talk.

Monday, November 21, 2005

We give 26% discount for off-peak car

Forum page
Straits Times

Insurance premiums for off-peak cars are too high. Time to lower them

I refer to the letter written by Mr Winston Ng, "Insurance premiums for off-peak cars are too high..." (St Times Online, 19 Nov 2005).

Mr Ng felt that insurance premiums for off-peak are cars too high. He said that these cars spend less time on the road, contribute to less accidents and should enjoy a lower rate of premium.

We agree. In fact, NTUC Income now offers a discount of 26% to off-peak car owners.

NTUC Income insures nearly 40% of all cars in Singapore. We are able to use our large base of insured vehicles to calculate a fair premium rate for each category of risks, based on their actual claim experience. Our discount for off-peak cars is based on the actual claim experience for this category.

NTUC Income now insures 5,300 off-peak cars. This represents about 50% of the 11,000 off-peak cars in Singapore.

We are able to offer competitive premium rates because of our pro-active management of claims and satisfactory service. Generally, our premiums are about 10% lower than the market. The additional discount of 26% for off-peak cars make us even more attractive to this class of owners.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Your comments are now welcomed

I now allow visitors to posting comments into my blog. You can also give feedback directly to me at

I have found a way to stop spamming by using the "comment moderation" feature of this blog.

Tan Kin Lian

Sunday, November 20, 2005

How NTUC Income reduce our repair cost

Forum Page
Straits Times

I refer to the letter from Sam Yeow entitled "It cost more to use insurer's outlet" (St Times, 19 Nov 2005).

Mr Yeow said that insurers who insist that repairs be done at their authorised workshop may pay more for their repair. He quoted his own case, where he could arrange his own repair for $300, but his insurer eventually paid $3,580 for the same repair done at its authorised workshop.

I agree with Mr Yeow. This is a common situation and result in higher repair cost and higher premiums.

NTUC Income does not use the method described by Mr Yeow. We adopt a multi-faced approach to reduce the repair cost, as follows:

- If the damages are slight, we encourage our policyholder to pay for his own repair, and protect the No Claim Discount. The saving in premium, due to the discount, can be more than the repair cost.

- Alternatively, we are willing to offer a cash settlement for the policyholder to arrange his own repair. The policyholder can find a workshop to repair for less, and keep the difference.

- If we have to pay for the repairs, we will invite our quality workshops to tender for the repair, and observe our quality standard. In this situation, the workshop will not submit an inflated bill as the repair will not be awarded to them.

We have implemented the above approach quite successfully over the past few years. This has allowed us to reduce our repair cost and offer competitive premiums to our policyholders. Our premiums are about 10 percent lower than the market.

Tan Kin Lian
Chief Executive Officer
NTUC Income

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