Tan Kin Lian's Blog: NTUC is less pro-society now

Tuesday, March 24, 2009

NTUC is less pro-society now

Hi Kin Lian,
Are you aware of how NTUC Insurance has evolved since you left?

I entered the industry (as an independent advisor) the same year you left NTUC in 2007. I'm a newbie here. But it does not prevent me from observing (with a sigh), that NTUC, the company you led for a long time, has changed since you left - from an organisation that prides itself for being pro-society to a somewhat changed "organism".

NTUC used to be tolerant towards people whose health are not in "tip-top" conditions. I attribute it to its role of being a pro-society co-operative, putting more emphasis in social goodness rather than profit/loss (that's what the guys there always say). It's a humane organisation.

Of course, ultimately bottomline counts. But now, for unknown reasons, the same organisation is suddenly turning its back on the people it's supposed to serve. So much so that it has tightened its procedures so drastically, resulting in people being rendered uninsurable for slight ailments, ie, not in tip-top conditions. It wants to have a sure-win situation?

That's why I say its a systemic problem. Because if this toughness continues, many Singaporeans, especially the older folks, will be without insurance/ medical coverages. Imagine how huge an issue it can be, in an era of aging population, increasing medical expenses etc. I can't comment whether it's due to a change in management philosophy. But for any person who cares (& I think you might), I would say that this is a Mini-bond in the making. Some time, some how, things will blow up. And it can be quite disasterous.

REPLY
I suggest that you write to the secretary general of NTUC, Mr. Lim Swee Say. I hope that he will respond to your feedback.

10 comments:

hongjun said...: Pity those uncles and aunties having to do roadshows.; March 25, 2009 12:20 AM
David said...: I think Mr Lim Swee Say, given his portfolio, must have been aware of such changes. Or if not, at least his aides could have also informed him.

Hence maybe he even endorsed such changes. Not surprising when unions and labour laws are sometimes even pro employer!; March 25, 2009 12:34 AM
Unknown said...: Which products since the new management took over are good, value for money and with the consumers in mind?
Only dubious products with low return and protection and lots of unnecessary frills to distract and deceive the consumers except the greedy and conscienceless agents disguised as financial consultants who get high commission for pushing them..
MAS should investigate them especailly the top 'acheivers' or the mrt or tot agents for malpractices and conflict of interest.It is a well known fact that ntuc salesmen and women practice are product pushers and peddlers. They are no different from the koyok medicine man at pasar malam.
Do the new management care? The new management is only interested to strive for #1 at all cost to beat Mr. TanKL to the game and show his new bosses he is very clever. But before the bosses priase him look at the profit; full of sales but no profit. In the last 2 quarters ntuc was #1 but at what expense and what products did he use ? capital plus? can the product make money? or to just boost turnover?
That man is obssessed with #1 market share .; March 25, 2009 9:33 AM
John Lee said...: Yes, i agreed. Thing have evolved very differently after the new CEO has assumed the post.

Many things have changed. People who had worked for many years left or were asked to leave. At the same time, many others were recruited with obscene salary. NTUC Income can no longer be a social enterprise because there is a need to generate sufficient profit to afford to pay the high salaries.

"Commercial in Approach.. Social in Purpose"

This statement only highlighted 1 thing to me. Profit at the expense of policyholders who have been loyal to the society over the last 30 years.; March 25, 2009 5:22 PM
Khiat Han Hwee Adrian said...: I feel that its only fair that an insurance company have to underwrite and pay claims carefully for the benefit of all policyholders in the pool.

Being an FA who represent several insurers, I can see that NTUC Income is still more lenient in term of underwriting and less strict in administrative.

I made a death claim for my late uncle recently. NTUC Income pays without question asked but the other insurer refuses to pay citing that administrator is needed in the process when that claim amount is less than $50k.

Its not true that NTUC Income only have lousy plans to rip policyholders after Mr Tan left. Extensive comparisons with other insurers still shows NTUC Income is able to give better value.; March 26, 2009 2:18 AM
Unknown said...: "Its not true that NTUC Income only have lousy plans to rip policyholders after Mr Tan left."
So you admit that ntuc has some lousy plans. What are they?
Revosave? vivolife? Sail? PatMyUni?

"Extensive comparisons with other insurers still shows NTUC Income is able to give better value."
Is marginally 'better' considered better?Why can't a cooperative give MUCH BETTER with all the savings in tax and additional 10% of profit going to policyholders? Commercial companies despite having to pay the tax and with shareholders claiming 10% of the profit can be better or match ntuc's products. Why is this so?
And if you compare the current products to the products of the last 10 years they look shrunk, shrivelled and lousy in terms of return and protection. Often the bank rate is used for comparison and this is misrepresenting.It is like comparing to the worst to look better.Sure, revosave is better than the bank rates but like the bank rate it is losing its real value and it is a guaranteed loss over the tenor.Is this the kind of products that you would use as SOLUTION to your clients' needs?
In the last 2 years cost has gone up to keep the greedy agents shut up and get them more greedy.Risk has gone up too since the restructuring of bonus.
Recently it has also tried to thrive over dead bodies and others' misfortune. Their ad that "home is safer" infers that foreign insurers cannot be trusted. This is instilling fear strategy.Is this ethical?
Adrain, you should rejoin ntuc and like them pushing and peddling these rotten snake oil products.; March 26, 2009 9:41 AM
zhummmeng said...: NTUC policyholders , brace yourselves for more bonus cut. If there is another cut it will be a double whammy for you. Make the coming AGM your opportunity to grill the board of directors and the CEo.
Read below LIA report.

Thursday, March 26, 2009
bonus cuts?
Modest 2008 Bonus for Participating Life Insurance Policyholders in view of Economic Recession

"Singapore, 26 March 2009: In view of the global financial crisis and economic recession, policyholders of participating life insurance policies (popularly known as par policies) can expect non-guaranteed benefits, in the form of bonuses, to be revised downwards for 2008 and into the future. These bonus changes are needed due to the poor investment climate in 2008.

Par policies offer both protection and savings through a combination of guaranteed benefits and non-guaranteed benefits in the form of bonuses. Bonuses are determined based on the performance of the par funds.

Like many other financial products and investments, par funds have not been spared from the brunt of the recent financial market meltdown. The bonuses for par policies in 2008 are therefore expected to be lower than those declared in preceding years.

Mr Darren Thomson, President of the Life Insurance Association (LIA), said, “Despite an extremely turbulent past year, all life insurers have been able to maintain the solvency of their par funds. We remain able to continue to allocate bonuses to par policyholders, albeit at a lower level.”

“Par products are designed to provide returns over the medium to long term. One of the advantages of par policies is the smoothing effect that moderates the otherwise drastic fluctuations in annual payouts. This has allowed insurers to declare bonuses for par policies, even in the year that saw financial markets severely impacted by the world economic crisis.

On top of that, par products provide policyholders with valuable insurance protection, which remains crucial even in these uncertain economic times.

In the coming weeks, most policyholders can expect to receive letters from their insurers advising them of the bonus revisions.”

Par policies are typically sold as Whole Life or Endowment plans. The premiums from policyholders are pooled in a fund and invested collectively in a diversified portfolio, which can include government and corporate bonds, equities, fixed income, properties and other assets. Policyholders benefit through a combination of guaranteed benefits and non-guaranteed bonuses, which provides them with medium to long-term returns. Bonuses are usually determined on an annual basis and are an addition to the guaranteed benefits."
And special bonus or terminal bonus is meant for the insurers to gamble. If they win you policyholders get more bonus and of course if they lose...bite the bullet. It is like giving money to someone to gamble at the casino on your behalf. If he wins he gets a 50% cut. If he loses it is NOT his money.; March 27, 2009 12:17 AM
KiaSee said...: Hi,

I received such a revision letter for the restructing from NTUC. I do hope they are right when they say it "should" earn me better returns with this new structure and not losses.

I called my agent for clarification. Turns out agent was in Australia. I checked on the web and saw the CEO hugging 2 bikini girls and drinking champagne in Australia too. (i)http://ms-my.facebook.com/photo.php?pid=1550459&id=36541001838&ref=mf
(ii)http://ms-my.facebook.com/photo.php?pid=1549575&id=36541001838&ref=mf

even though the brochuer sent to me explained that the economy was challenging and that our Fund made losses? Wouldn't it be better to be more frugal with expenses so that PHs get more? Then again maybe they are saving a lot of money since Australia $ is low now. But shouldn't they have chosen a better time for the retreat instead of after sending out so many letters to notify PHs. I am sure other PHs need clarification too.

I have 4 policies with NTUC now (I am very paranoid) and I live a very frugal life. I do expect my insurance company to be prudent with money too (that's why I chose NTUC in the 1st place). Now I am just worried and can't sleep.

On a side note, my family is not even buying from NTUC Fairprice anymore. We buy from Sheng Siong as the prices seem lower, service is good, and the leader at the helm is a frugal HDB heartlander like us.; April 28, 2009 4:07 PM
hongjun said...: He is having a good time.; April 28, 2009 9:24 PM
Anonymous said...: Another example of how NTUC income less pro-society.

They takan an elderly couple like this. Do they even understand properly the letters they received? It is sad.

http://business.asiaone.com/Business/My%2BMoney/Property/Story/A1Story20090728-157639.html; July 29, 2009 12:33 AM