Friday, September 14, 2007

Lower rates of commission

COMMENT POSTED IN MY BLOG

Mr Tan,

Did you try to reduce agents' commission during your tenure with INCOME? If you tried, how effective were you? What were the challenges you faced if you tried to reduce the commissions? Why were you not able to overcome the challenges? What do you think that the present CEO can overcome those challenges?

REPLY:

During my tenure, the selling cost for NTUC Income is about half of the rate payable by other insurance companies. The agent gets lower commission. There is no over-riding commision payable to the agency manager. The advertising expenses are kept low.

Due to the low cost, the life insurance products were offered at lower premium rates, or give a better return to the consumers.

The agent can earn a satisfactory income by generating more sales, as the products are easy to sell.

Many of the current products offered by NTUC Income belong to the "old series" and still give good value, compared to similar products in the market.

I have no comments about the pracitce of the new management.
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3 comments:

Anonymous said...

The strategy by new management is not sustainable.It is costly and to keep up the sales with high reward for the agents the increased cost is passed to the customers. Return will be affected.In the long term it will be
like the companies which cut bonuses in the past. History will be repeated.

September 14, 2007 10:33 PM
Thomas Phua's Blog said...

If Income is perceived as supposedly so, to be like other insurers, then which insurer can we get best value from?

As in the other comment by Mr Tan, Income has no over riding, so does this mean all being equal, Income will still have an edge?

September 15, 2007 11:16 AM
Anonymous said...

It is difficult for the customers to know which is the best product available that can meet his efficiently and cheaply.Customers are not trained to know which is the best product.
If you get an tied insurance agent all his products are the best, just like the on going debate over the revosave product.
If you approach a dishonest FA adviser he will recommend all the high commission products.
It boils down to whether you have an honest,sincere and competent adviser. If they have all these minimum traits you are safe.

September 16, 2007 4:05 PM

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