Saturday, September 30, 2006

Average of 1,100 visitors

An average of 1,100 visitors read my blog daily for the past week. This is unusually high, and is due to news of my impending departure from NTUC Income.

I expect the number to drop back to the normal traffic of 300 daily, after the news wears off.

I shall be writing more about my future plans in this blog. I shall explore the feasibility of introducing a "private pension plan" or "lifestyle fund" for the CPF members.

Basic courtesy to call back

Dear Mr Tan,

I wish to highlight is the service quality of the enquiry hotline. If you have been promised that someone from a Company would check and revert to you within a stipulated time, isn't it at least basic courtesy to return call to the customer even if you do not have the answer to the query?



Dear FG

I agree with you. It is basic courtesy to return the call within the promised time, even if we do not have the answer.

I have been caught in this situation personally. I returned a call at the promised time, but the other person is not available or the call cannot get through.

I hope that you do not consider this to be an excuse, because it does happen quite often.

Tan Kin Lian

Some views on Income agents


I am not a policy holder of Income or any other insurance companies.

Recently, insurance agents had been stalking bus stations, MRTs, shopping malls and any other places where there is a crowd. In pretence of doing a survey, then they try to hard sell.. Perhaps I am not so versatile enough to travel round Singapore
because up to now. I have yet to see any Income insurance agents doing that.

So far, from my encounters when Income Agents had leave me a good impression. They explain, elaborate but never really hard sell. And I think that needs a lot of discipline within the corporate company itself. Of course it might not be totally your merit but a healthy corporate image do needs a lot of effort in it.


Friday, September 29, 2006

Invest in an indexed fund

An indexed fund is a large fund that is benchmarked against the market index. The fund manager's job is to make investments to follow the components of the market index. This is also called "passive investment".

The advantages of an indexed fund are:

- it is usually a very large fund
- it is well diversified
- the annual charge is very low, maybe 0.5% or less

The fund manager can keep the charges at a low level, as they do not have to pay analysts to study the individual stocks. They just invest mainly to follow the market index.

Studies over the past years have shown that, by investing in the index, the results are better than the average performance of actively managed funds. This is probably due to the low fees and transaction costs.

If you invest in an indexed fund, you do not have to worry about how to pick the right managers. This reduces another challenge.

Many experts have recommended the consumers to invest in the indexed funds.

NOTE: An indexed fund with low charges is not available in Singapore today. But, I expect it to be available in the near future. Watch out for it.

High telephone charges in England

I stayed in Manchester for 4 days. I used the telephone in the hotel room to connect to the internet.

I was shocked to received a bill for GBP 220 for 4 days of stay. I asked why the cost is so high.

I was told that the telephone charge is GBP 0.75 for 1 minute by fixed line and GBP 2.50 for mobilephone. This is easily about 30 to 70 times of the charges in Singapore. Apparently, this is the public rate, i.e. not loaded by the hotel.

The hotel agreed to reduce the charge by 50%. It is a nice gesture, but the net sum is still very high.

It seems that the telephone charges are very expensive all over Europe. It must be due to the high tender prices that the telephone companies paid for the 3G network. This is probably a way to recover their large investment.

Thursday, September 28, 2006

Customer for 30 years!

Dear Mr Tan,

I am a loyal INCOME policy holder for the last 30 years since my days in national service. I bought my 1st life insurance policy while I was in the Officer Cadet

Subsequently, I attended a talk by you as the GM of INCOME introducing INCOME to the policy holders.

You are a very hands-on person. Care for the interest of the policy holders. I had some small investments in INCOME because I trust your words. I have confidence in you! You had many innovative products.

Sad to know that you are stepping down though you had been with the Company coming to 30 yrs. You still wants to contribute to the company and care for the
Policy holders. I am sure there are many ways that you can still do it.

Best wishes to you and a BIG Thank you for your contributions to INCOME and the Insurance industry.


Invest for the long term

If you wish to invest for 10 years or longer, my advice is:

- invest in a large fund which is benchmarked to the market index
- choose global equities
- choose a fund with low charges (upfront and annual charges)
- select the right time to realise the investment.

A large fund allows you to diversify and minimise your risk. The fund should have 100 or more investments. If any of the investments turn bad, the impact is likely to be small and is more than offset by the good investments.

By investing for a long period, you can average out the good and bad years. This will give you a good average return. The average return on global equities over a 10 year period has been from 7% to 10% per annum. This is higher than other asset classes.

A global equity fund gives better diversification, compared to investing in any specific country (eg Japan) or sector (eg technology).

By benchmarking to the market index, the fund manager has to invest in the large, well managed companies. This will reduce the speculative risk.

If your fund has low charges, say less than 1% per year, you will be earn most of the return (instead of paying the fund manager).

If you choose the right time to realise your investment, you can get a better return than average. Do not quit when the market is depressed. By patient. Wait some times for the market to recover, and quit at that time.

Wednesday, September 27, 2006

Top managers have strong cooperative values

A customer said that he will withhold further purchase from NTUC Income until he finds out the "true colours" of the next chief executive.

I think that this is not necessary.

The general and senior managers who will remain with NTUC Income have strong commitment towards our cooperative principles, to look after the interest of our policyholders. They asked me to convey this message to the public.

After my departure, I will keep my insurances with NTUC Income and will also add to my investments.

NTUC Income is financially strong and is well managed. You can continue to get good value from the cooperative.

A lot of my sales is due to you


Dear Mr Tan,

It was a tremendous shock when i read in the media that you are stepping down from Income from April 2007.

I have been an organiser from 1978. A lot my friends and clients have found you to be a very down to earth person who cares for the policyholders.

I find you to be an great gentleman, who is very sincere and a very likeable person even though i was upset with one policy of yours.

Frankly a lot of my sales was done on the strength that you are the CEO. I am small person who is not in the MDRT or COT, but you leaving INCOME brings so much of
sadness in my heart.

For whatever reasons you are leaving , may i wish you all my best wishes, good
health, prosperity and happiness in your future endeavours.


Thanks for everything

Hi Mr Tan

Saw your departure news only from Big Trumpet just now.

I just want to express my admiration and respect to you for been there for us through NTUC. I am not an Income policy holder except just a happy consumer at the NTUC supermarket.

Hopefully the new CEO will continue to run NTUC with the S'porean's pocket in mind.

Continue to keep us informed of your happenings through your blog. I wish you good health.

Yours sincerely

A job well done!

Dear Mr. Tan

I'm a loyal fan (a shareholder too)of NTUC Income with serveral policies for 2 reasons:

1. INCOME policies are really competitive in terms of rates and return

2. The fact that you always put comsumers' interest as top priority under your leadership, even at the expense of antagonising your competitors and detractors

You also value 2-way communication and very hands-on, instead of letting your staff do all the work.

I remember an incident that after an unpleasant trip to the snow city, I received a customer service officer of INCOME for my feedback the next day, and this actually gives me an avenue to convey my dissatisfaction.

Such move of valuing customers' opinion is admirable and worth emulating by other service providers.

With your departure, I really do not know how would the next one seating on your hot seat performs.

I wish you all the best in your future endeavours!



Dear MC,

Thank you. I am sure that the new CEO will continue all the good things that make our customers happy. Wish you all the best.

Tan Kin Lian
CEO, NTUC Income

Big shoe to fit

Hi Mr Tan,

You may not know me as there are so many customers that you have delighted in one way or another.

I just read the eNN e-newsletter and realised that you will be leaving the

Indeed, this will be a big shoe for anyone to fit in and you will be missed. I want to thank you on behalf of all consumers and customers of the coop which you have helped.

You have been an exceptional leader and showed your impartiality in assessment of matters.

Personally, I had 2 cases in the last decade which sought your assistance for resolution and I cant thank you enough for addressing such trivial matters.

Thank you once again and my best wishes to you on your furture endeavours.
Take care.

Best Regards,

Why does NTUC Income educate its customers about cooperative values?


NTUC Income has to compete in a competitive market.

In the case of life insurance products that will only mature in 20 years or longer, the consumer is often not clear about the return that they can get from our products, compared to other products offered by the commercial insurance companies. Some of our competitors make bold projections of the return from their products. As the projections are not guaranteed, they can get away with high projections that may be unsustainable.

In such situations, it is important for us to educate the consumers about the cooperative model. Our cooperative shareholders get a modest return on their shares. The remaining profits is distributed as bonus to the policyholders of participating policies.

By educating the consumers, they are more likely to choose NTUC Income for their long term investments.

We educate the consumers at various levels:

- through our insurance advisers who meet them face to face
- through our newsletters sent regularly to our policyholders
- through advertisements and media releases.

We also educate our policyholders that they pay a lower premium on their non-life insurance products, as our aim is to cover the claims and expenses. We do not aim to make a large profit for shareholders.

Tan Kin Lian
CEO, NTUC Income

Tuesday, September 26, 2006

Commission on motor insurance in Europe

I am now in Manchester, UK.

The motor insurance manager of a Swedish insurance company told me that the commission payable to the agent is an upfront commission of about 5% to 7%. There is no renewal commission.

Most of the motor insurance are done through the telephone. The agent does not have to do much work.

In Germany, many large insurers follow a similar system, ie a small upfront commission with no renewal commission.

The competitive market has forced down the commission to this level. This has been the case for many years. Lower commission means lower cost to the consumers.

Monday, September 25, 2006

Private Pension Plan

Three years ago, the CPF wanted to introduce a Private Pension Plan (PPP) for their members.

The aim was:

- offer large, well diversified funds for members to invest
- a small number of fund managers will be selected
- no upfront fee
- marketing and educating will be done by CPF
- a modest annual charge
- a trailer charge, for members who encash earlier

The fund management industry did not like the "no upfront fee". The PPP plan was shelved.

I think that the earlier proposal by CPF is sound. I hope that someone will introduce this PPP option for CPF members. It will help them to make the right investments.

Migrated agent done well


Dear Mr Tan,

I have spoken to a journalist and I told her that I would like to give her an honest and fair view.

Spoken to her that I am a migrated agent and have done very well in NTUC Income.

I have a good support from company, management and we have a very good CEO, who have contributed much to NTUC Income for so many years.

I told her the direct channel has not affected my business.

Commercial companies have bancassurance, so to have a direct channel is good. As
a Cooperative, we have always kept our expenses low.


Top insurance advisers earn well

Several top insurance advisers in NTUC Income earn more than $300,000 a year. They actually earn a lower rate of commission on each policy (about half of the market rate), but they earn more than a large volume of sales.

They are showing an increase in earnings compared to past years.

It is easy to sell the products from NTUC Income because they give good value to the customers. We have a good brand image. Customers prefer to buy from NTUC Income.

The advisers also benefit from the increased cross selling activities this year. We now generate 25,000 new sales leads each month, most of which come from existing customers. It is easy for our advisers to follow up and close more sales.

More sales are now done by the advisers by entering through the internet. The adviser does not need to visit the customer or complete any application form. This reduces the time to close the sale and increase the productivity.

Several agents who migrated to us from other companies are seeing a large increase in their earnings.

Next CEO will continue to take good care of consumers


Hi Mr Tan,

I am both sad and concerned that you are going into early retirement.

Sad because you have run the cooperative so well, notwithstanding the controversies you sometime stirred.

I am worried because the next CEO might adopt a different marketing tack, raising premium rates.

I have Living Policies, Incomeshield and a number of other policies with Income precisely because I like what you have been doing at the cooperative. I am afraid that the next CEO might not share your approach in keeping costs down and allowing customers to share the savings.

Very concerned.


Dear TTY

I also share your hope that the next CEO will continue the same strategy to take good care of the consumers.

Tan Kin Lian
CEO, NTUC Income

The next CEO will lead Income well


Hi Mr Tan,

I read with much disappointment about your decision to retire from NTUC Income.

Two months ago, I emailed and sought your advice regarding buying a growth or annuity plan and indicated my high regard for your leadership and capable management of NTUC Income.

Like many others, I bought policies from NTUC Income because we trust your caring interest and responsible stewardship of monies of Income clients. It's precisely because you're the top man there that I decided to buy another growth policy just recently. The amount is modest but it represents my retirement fund and means a fortune to me.

I share with others the deep disappointment of your intended departure and wish you could change your mind. You're very well respected in the insurance industry but you remain humble and approachable to the common folks . It's hard to get someone to fit into your shoes. It'ld be great if you could you reconsider your move.




Dear CGC

Thank you.

I am sure that the new CEO will be able to lead the organisation well, towards the next stage of its development.

1,200 visitors to my blog

I used to have an average of 250 visitors to my blog.

Since the news of my impending departure from NTUC Income, 1,000 people visited my blog on Saturday and 1,200 on Sunday.

This will probably continue for a few days, before it reverts to the normal traffic.

Sunday, September 24, 2006

Dare to be different


Dear Mr Tan

Reading the ST report on your departure on Saturday makes me feel that corporate entrepreneurship is not seen as a virtue, at least by some people in Singapore.

Daring to be different from industry norm is one way for Singapore Inc to remake itself, especially so for a giant such as NTUC Income, which is competing with MNCs such as AIA, Prudential and the likes.

I salute the way you apply out of the box thinking method on motor insurance as well as agents' renumeration. The thinking behind is to offer the best value to consumers at the lowest possible price, which can only be made possible with a lowest viable cost structure.

I feel that the ST Saturday's report did not provide a balance enough coverage of the merits and demerits of your policies. I do not think they have gathered sufficient facts and figure to give a fair comment on such policies.

Nevertheless, I trust that Singaporeans are smart enough to see that. So no worries.


I urge you to retire


Tan Kin Lian,

"I am very sad at the inconsiderate behaviour of the Straits Times. They are willing to advance their own agenda, without regard to the harmful impact on other people." This is your comments about the ST having ignored your request to publish your departure from income, you are not happy about it.

I think you deserve it because as the CEO of Income, your stubborn behaviours also created many dissatisfactions among your subordinates, colleages, agents and business associates as reported in the ST times, therefore ended up that you have to leave Income, you said you planned to work till age of 70, however, I urge you to go retire, don't think that any one likes to work with you. Less people will suffer. "

Air flight to Manchester

I took the Singapore Airlines plane to Manchester on Saturday night. Two stewards recognised me. They came to check and talk to me. They wanted to confirm that I was the person that appeared in the front page of the Straits Times and Sunday Times.

Copies of the papers were distributed to all passengers.

We had a nice chat. I introduced them to Logic9 and taught them how to play the game. I left the pocketbook with them as a souvenir.

Why the English love tea

I am now in Manchester. Due to low humidity, my throat is dry. So, I need a drink of tea.

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