I met with Mr. Lim Boon Heng and Mr. Matthias Yao today. Mr. Lim is the former secretary general of NTUC and the current chairman of the NTUC Social Enterprise Development Committee. Mr. Yao is the deputy chairman of the board of Income.
Mr. Lim assured me that Income will continue to observe its social purpose and cooperative principles and that his committee will ensure that Income continues to give good value to its policyholders.
I briefed them about the two concerns on the bonus restructure, namely:
1. To have adequate assurance on the payment of the special bonus (as it is not guaranteed)
2. To ensure that policyholders get bonuses and cash values that closely reflect the contribution to the life fund by each policy, based on the actual experience.
Both of them shared the general sentiment. They said that Income will look into ways of implementing these two objectives. This will require some time to be implemented fully.
I asked that Income give an option to the policyholder. Mr. Yao said that this has been considered, and the board has decided against it.
At the annual general meeting of Income, chairman Ng Kee Choe reaffirmed that Income will continue to look after the best interest of its policyholders. He announced three measures to deal with the concerns expressed by policyholders on the restructure of the bonus. His speech will be posted in Income's website.
I believe that these assurances are the best that can be achieved at this stage. We will not be able to achieve more by taking this collective protest to the next stage.
Hence, I have decided to withdraw the Collective Protest and will continue to monitor the developments to ensure that the policyholders interests are protected. I hope that the policyholders who submitted signatures to me will support my decision.
If any policyholder still does not accept these assurances, they can lodge the protest directly with Income.
Assurance is one thing and having a bad arrangement is another. It is like waiting for it to happen. Look at the bad products that the new management put out. The products tell you the consumers' interest was never in their mind. They are expensive and useless to address consumers' needs. When the new CEO talked about changing Singapore he talked also about the changing needs but he was wrong that Singaporean's needs have become diluted and fanciful and therefore the revosave and vivolife which are retro in terms of protection and returns but with fanciful frills.. There is no enhancement,advancement or sophistication in the products in tandem with the rise of affluence if that is what he meant about changing needs. What he meant probably was that people are richer to splurge on unnecessary things or some fanciful and imaginary needs like lifestyle. Are these financial needs? Have financial needs changed. My grandfather needed $500K to retire graciously but I need 1 million to have the same lifestyle. It has become harder for me to accumulate and I need more efficient and advanced products to help me.But ntuc products are just the opposite. They appeal to the fanciful rich who have money to burn .As what he said people don't mind paying $5 for a cup of fanciful coffee at Starbuck when you can get at 90 cents at airconed KOPITIAM. But then your agents are selling to the people who are used to the 90 cent coffee at Kopitiam.They sold to the wrong people, right? The Starbuck crowd don't fancy your products. They prefer qualified and competent financial planners and not salesmen and women.
ReplyDeleteBut the ordinary man in the street was what NTUC had in mind when the visionary founders conceived this insurance cooperative.So you see this so called social enterprise in name is nonetheless like the rest.
Back to the first question. Is assurance enough? Is it the right move? Is the journey ahead fraught with danger and uncertainties. If you think so do what Mr. Nick advised. Take the same risk and invest for much higher return. Why leave the surplus for someone for 'smoothing"
Dear Mr Tan,
ReplyDeleteThank you very much for your effort in organising and representing us in this collective issue. I support your decision.
However, would there be any safeguards to ensure that NTUC Income will implement the two objectives.
On another point, as a result of this collective action initiated by yourself, you have a strong following of supporters. May I request that all of us supporters stay together with Mr Tan as our spokesman as an informal group. Perhaps we can be known as the 'NTUC Income Watch Group".
Leon Khor
Mr. Lim Boon Heng told me that this Social Enterprise Development Committee will continue to ensure that Income follows it social purpose.
ReplyDeleteI will use this channel to present the views of the informal "NTUC Income Watch Group".
I intend to write a paper on the use of asset shares as a measure of equitable bonus distribution. This will ensure that the bonus and cash values follow the asset shares.
I hope that some actuaries within this group can help me to write this paper.
zhummmeng said, "Assurance is one thing and having a bad arrangement is another. It is like waiting for it to happen."
ReplyDeleteI agree with your statement. I also agree with some of your views on the new products that have been introduced lately.
Let us analyse these products carefully. If they are high cost and give poor value to consumers, we can present them to the Lim Boon Heng's committee.
May Bank has not invested in sub-prime when other insurance companies write down millions or billions of dollar. Why? MayBank executive had adhered to good Islam business practice strictly.
ReplyDeleteWhat and where is the good business practice of a social enterprise in Singapore?