Tan Kin Lian's Blog: Culture of trust and fair treatment

Tuesday, March 23, 2010

Culture of trust and fair treatment

I have mentioned the bad practices of insurance companies in this blog. Someone asked me this question a few times, "was the practice different when you were in charge of NTUC Income?"

I can say that the two key differences during my time were:
a) my colleagues were very clear that it was our policy to give fair treatment of policyholders
b) as the CEO, I was willing to receive and respond personally to feedback from policyholders.

I am sure that my colleagues do make mistakes or took decisions that may be unfair to policyholders, but these mistakes are reduced (due to our culture at that time) and the ability for policyholders to access the CEO helps to correct these mistakes. I might have made some mistakes as well, but it was not intentional and not aimed at maximizing profits.

We still have to ensure that the policyholders do not take advantage of our generosity and are not paid claims that they are not entitled to, but we do give the benefit of the doubt to policyholders (unless it is clear that they are abusing our trust).

I believe that all insurance companies should aim to treat their policyholders fairly, regardless of whether they are cooperative, social enterprise or commercial, even as they aim to run a profitable business. They should make an honest and fair profit, and should not make an excessive profit at the expense of the policyholders. They should pay a fair rate of bonus to policyholders on their participating policies. They should design products that charge a fair rate of premium and give a fair yield to the policyholders on their savings.

Tan Kin Lian

15 comments:

Anonymous said...: Mr Tan, you may want to reiterate that Income is a coop and not somebody's private family business. Many NTUC related coops are losing the coop part of them. It is crazy to see that prices of many similar goods is higher in Fairprice is higher than ShengSiong and Hong Mao. NTUC Dental coop has also become very profiteering.; March 23, 2010 12:04 PM
Anonymous said...: When MAS issued the guidelines for fair dealing outcome to consumers it was meant for insurance companies to implement it top down so that no one, absolutely no one should have the excuse to pass the buck around. It starts at CEO and ends at CEO.
Do we see this happening?
I guess the insurers pay lip service only. If not why rotten product are still being rolled out and why insurance agents are still pushing products like koyok or snakeoil?
Fair dealing outcome is supposed to be a company wide culture and starts from the CEO downwards.
What is this culture?
1. products are to give fair value for money.
2.the insurance agents are to put their clients' interest first.

But the results of 2009 say otherwise.
The consumers are still grossly under insured. Only $50K sum assured was sold and claim was less than $50K. How come if the culture of fair dealing outcome is in place already? You don't need to have a PhD to know that the results were due to greedy insurance agents pushing expensive high commission products to consumers. Need approach was not used to assess the needs of the consumers. The agents and the companies were putting their own interest first and some were pushing dubious products for market share and to become #1.

As long MAS doesn't enforce and really police the industry and depending on self regulation the consumers will never get fair dealing.
MAS needs extra measures to force fair dealing for consumers. I believe these measures will work and change the culture.Remove the commission and force the agents to use need based approach to help consumers and on top of it another control to make sure the consumers are taken seriously by the agents and that is make the agents responsible for the outcome on reasonable basis failing which constitutes a breach of the FAA section 27.
These measures will eliminate the unethical practice and conflict of interest . This culture will then be deeply ingrained in the companies becuase this will keep the company from breaking the law.; March 23, 2010 1:07 PM
Mr. Yeo said...: I agree with Mr Tan's comments on trust and fair treatment which should be given to policy holders.
I was sold a Prudential investment link policy (ILP) by an old friend who did not explain to me that it was an ILP and I just signed the form because I trusted him as an old friend.

Furthermore, there is nothing on the policy to indicate that it was an ILP. It was just indicated as an insurance product.

Recently after the Lehman Brothers minibond problems, I complained to Prudential again but their reply was that I have signed the form. The investors in the Lehman scandal also signed their forms but yet they got back some of their money. I did not get back a single cent even though I was not an investor but someone who was looking for an insurance product to protect my young children.

I complained TO MAS who then suggested that I lodge my complaint with FIDREC. FIDREC's Elaine Shen asked me to lodge a complaint with Prudential even though I told her that I had lodged two previous complaints with no satisfactory response from Prudential. After waiting for 6 weeks and not getting a reply from Prudential, I submitted my complaint to FIDREC. After FIDREC accepted my complaint, an officer Adeline Lee told me that my complaint may have a time-bar issue and yet she asked me to seek legal advice. At the same time she also advised me on the "economic cost of justice", that is, it may not be worth the legal fees to claim money from Prudential. She also suggested that I go to Legal Aid Bureau to get free legal aid if I cannot afford a lawyer. She finally told me that my case is not within FIDREC's jurisdiction although their website did not indicate so. She also claimed that she is speaking on behalf of FIDREC.

She then wrote to me telling me that I may have a time-bar issue and that it is not appropriate for FIDREC to handle my complaint. She copied the letter to Prudential even though she previously sounded 'concerned' that Prudential may not settle if they know about FIDREC's opinion of my complaint.

So I must say that I am very impressed by Great Eastern Life's customer care policy when they decided to fully refund their customers who bought ILPs from them.

Even though Prudential claims to listen to their customers in their recent advertising blitz, it's what really happens on the ground that matters!; March 23, 2010 3:23 PM
Anonymous said...: Mr. Tan,
We do not believe in trust any more, what MAS, Case, or FIDREC, or
even this Govt. They only talk,
talking is so easy, now we treat these organisations as trash, not
worth wasting my time.; March 23, 2010 4:31 PM
Anonymous said...: MAS has never been on the side of consumers..... it is all a big farce whenever they made statement of concern about consumer protection...it is a public relation stunt.; March 23, 2010 5:48 PM
Anonymous said...: What insurance companies say and what they do are never congruous . Why? what they say is to bullshit the public. There is a saying that if you tell lies so often that they may become truth one day. This is exactly what they hope to achieve.High hope!!! these insurance companies think consumers are idiots, financially illiterate maybe but definitely no lack of commonsense.
Eg. one company advertises that their DNA is people before profit. Do you think so? You can see the people's interest is never factored in the products that they peddle. People are interested in reasonable return and protection at low cost if they buy products, right? Do their product give such benefits? No, yet they try push down the throat especially the throat of their trusting policyholders by exploiting TRUST. It is undermining and cheating. It is like keeping a wolf to take charge of your chicken coop and it is stealthily eating up your chickens,right? This is how new products are pushed too and the policyholders become the guinea pigs. THERE IS NO SUCH THING AS NEW PRODUCT BEING BETTER THAN THE OLD PRODUCTS. Insurance products never got better in term of features and benefits and yet at lower cost and higher return.A CEO earned $5000 a month 20 years ago now earns $50000 a month. This is ten fold. Likewise with other jobs.How can your wholelife ever get better like the CEO's salary, 10 folds better than the old products?
Think about it. It is better to do everything differently now .Wholelife and endowment are scams and the reason they are still around is to up keep the salaries
of the CEO and the senior management lifestyle and the insurance agents are the lackeys to do the bidding of the CEO , and of course their own greed and also they lack the conscience which all human beings have except animals and the devil.
The WallStreet saga is a lesson and right in here the squeaky clean Singapore it is no different.
The insurance companies are the cash cows of these people.; March 23, 2010 10:26 PM
Anonymous said...: I have seen Mr Tan's fairness first hand when I worked there,I have seen him tick off managers who was to rigid in enforcing the rules.

In a classic case, during the very tragic SIA plane crash in Taiwan, it was Income, under Mr Tan's watch that made the first payout without following the rule, "To establish that the person's demise is legally declared before a payout can be made". To wait for that ruling would have taken years....

He truely worked to provide value at a reasonable cost, I am so disappointed at the rate of increase of my Incomeshield premium under the present management.

"I am not interested if you are
No:1, I am more interested if my premium is kept reasonable".; March 23, 2010 11:40 PM
Anonymous said...: They are Number 1 because they keep increasing your premiums. Just like MDRT, COT, TOT and other similar crap awards -- being number 1 insurer means being the best in conning the most premiums out of trusting customers. You think they got number 1 for putting customers' interests first?

And the FW is famous for always claiming credit, using predecessor's backside skin for his face, and smiling big big.

See where your bonuses & cash values went to (and also where your trusted agent going to):
http://hongjun.blogspot.com/2009/04/ntuc-income-ceo-tan-suee-chieh-with-2.html

http://www.facebook.com/photo.php?pid=1549580&id=36541001838

http://www.ntucincomeevents.com/incomerising/phase2/

http://www.facebook.com/photo.php?pid=3407686&id=36541001838

<a href="http://www.facebook.com/photo.php?pid=3225028&id=36541001838>http://www.facebook.com/photo.php?pid=3225028&id=36541001838</a>; March 24, 2010 1:01 AM
Anonymous said...: Anyway to start a petition to PM and ask him to look into ways to prevent COOP from becoming to profiteering?; March 24, 2010 1:08 AM
Anonymous said...: Get him at the AGM..Ask him to show the books. Ask him to disclose his salary and the salary of senior managers. There are now more Indian Chiefs. There are at least 20 Senior VPs. Why so many? Do they work for free? Are they needed.
I wonder they would create a Senior VP overseeing toilets and cleaners.
It is down right squandering policyholders' money to make himself look good , to justify his own salary.
See you at the AGM.; March 24, 2010 9:44 AM
Tan Kin Lian said...: I posted this article because there is a person who keeps out asking this question, each time there is a bad practice with an insurance company, i.e. "Mr. Tan, was it not the same when you were running NTUC Income?"

I blocked this type of questions because it is malicious.

Another question that is asked several times is, "Mr. Tan, your blog is unfair in bashing insurance company for their bad products. You should also mention the good products as well".

I welcome people who are willing to state why their product is good, provided that the person disclose his identity and is able to take questions from my readers.

Do not expect me to market the products for them, especially if the products are overpriced and give poor value.; March 24, 2010 10:05 AM
Vincent Teo said...: Without all these rotten products, how to finance those frequent overseas incentive trips, commission, attractive salaries and perks, posh office buildings/branches in prime shopping malls/CBD etc.

It is not only Income that does this. I have an adviser from Prudential, seems that every time I call her, she is out of town to some exotic locations for some company sponsored incentive trips or study trips. I really pity their policyholders, luckily I only bought one of those integrated shield plan for my son. I have since terminated that policy after switching to Aviva.; March 24, 2010 10:57 AM
Tan Kin Lian said...: Staff are likely to make mistakes, even after they have been trained to treat customers well.

Somehow, they think that it is their duty to save money for the company by finding ways to reject claims.

When they make this type of wrong decision, the customer needs to bring the grievance to someone with authrity. This is why I agree to take these matters as the CEO.

I learned about the wrong decisions that are being made at lower levels and correct them. This becomes the subject of further training.

After a while, the staff become confident to bring problems up to higher levels, and to me. This builds a culture of responsiveness and fair treatment of customers.

This is why NTUC Income was different during my time.; March 24, 2010 12:21 PM
Anonymous said...: Top down means from CEO the culture pervades the whole company and not the left hand doesn't know the right hand is doing.
Well that is supposed to be and what MAS wants but it seems to come from the bottom.; March 24, 2010 12:58 PM
Capitalist said...: This is the way Capitalism works.

and we have embraced it fully with arms, legs and hips too!

We adopt "socialistic" stances at our convenience, when it suits the situation such as " we must upgrade" and we will subsidise training ( socialist ).. and.. "errant property owners ( HDB ) will be penalised" ( capitalist )

By and large.. it is a Capitalistic brain that dictates all activity here.. from head down.; March 24, 2010 2:02 PM

Tuesday, March 23, 2010

Culture of trust and fair treatment

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