Wednesday, May 28, 2008

A better bonus philosophy

EXTRACTS FROM STATEMENT BY
NICK RHODES, APPOINTED ACTUARY OF INCOME, 2002-2007

Income, as a Cooperative, distributes less to shareholders .... so a variable and high annual bonus can be paid, to the benefit of policyholders.

Income has managed to maintain remarkable stability in its non-guaranteed Terminal Bonus over the years - not even reducing it when STI was down at 1,300.

As a result, in my opinion, the Income bonus philosophy was much better than that adopted by competitors, since the policyholder could predict with greater certainty the value of his policy as it approached maturity.

Other companies have an inferior product - and it would be unfair to policyholders for Income to unnecessarily follow "market norms".
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2 comments:

blueoceans said...

I agree that Income, as a Cooperative, should be able to distribute more benefits to policy holders than other insurance companies. It should distinguish itself from others and not merely follow market/industry norm. Otherwise, what is the point of insuring with Income?

May 29, 2008 9:57 PM
hongjun said...

What happened to this actuary (2002-2007)? Left for greener pastures or Income just wanted a new actuary?

hongjun

May 30, 2008 12:19 AM

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