Saturday, October 09, 2010

Manage an insurance company

This article is suitable for a person who wishes to make a career in an insurance company as an underwriter or business manager. It is also suitable for an insurance consumer to know if a fair rate of premium is being charged for the coverage.

Advice for a retiree

Dear Kin Lian
I read with great interest on  the article "Insurance for a retiree" dated 06
July 2010. I have retired a few years ago and have since invested my assets in
equities, annuities, etc on my own. I would like to review my investments and
would like to have some financial advice for the review. I would appreciate your
kind advice on this matter.


Sorry. I am not able to give any specific advice on selecting investments.
My general advice is contained in my book, Practical Guide on Financial Planning (available at and in the FAQs in my website,

Personal finance on a napkin

Dangers of the Internet

Read the letters expressing concern about the dangers that the internet can pose to young people.

Survey: Restructure the global economy

Read this article

Give your views in this survey

Casinos - odds of winning

The casinos are asked to display their odds of winning at the tables.

How to retain customers

A survey shows that customers are fed up with automated self service system. They spend a lot of time trying to reach a human being. They dislike the long waiting time. Why are companies still introducing such automated systems, which are costly and end up in lower productivity and lost business?  It is time for companies to change their system to achieve their productivity goal and retain their customers.

Friday, October 08, 2010

Advertisement by Standard Chartered Bank

Standard Chartered Bank has an advertisement over CNBC that ends with the tagline "Here for Good". It is an excellent statement of their corporate policy to act ethically in the interest of their customers and the community.

Although this is just an advertisement, it is refreshing to know that they are prepared to make this bold statement. I expect that they will live by that statement. I will look for the full wordings of their advertisement, which is bold and inspiring.

As a first step, I hope that Standard Chartered will review their practices and introduce fair charges in their fees to customers. Most banks charge exorbitant fees to increase their profits ... way out of the cost of providing these services. If Standard Chartered Bank can take the lead to reduce the fees, this would make bold and clear statement that they intend to live by their words. It will mean much more to consumers than the money spent on advertisements.

It would be to live by their words ... to he "here for good".

Tan Kin Lian

Here is the advertisement

How to read a Benefit Illustration (Par Policy)

If you are offered a participating policy, you will get a benefit illustration that shows the projected yield based on 3.75% and 5.25% p.a. This article explain show you can calculate the percentage of the value of accumulated premium that is deducted from your policy.

This format is different from the format of the benefit illustration used for an investment linked policy.

Can Money Buy You Happiness?

A recent study suggesting that
happiness levels off after a household has reached $75,000 of income
raises a host of questions.
Courtesy of Carl Richards
(Don't miss Readers' Comments)

Contingency fee for professionals [2]

Should Singapore allow lawyers to charge contingency fee, i.e. they will get paid only on successful outcome of a legal case? Should this system be applied to medical specialists for expensive treatment that has a low chance of success?

Read the results of a survey in

How to improve customer service

How can a company improve its customer service?
I have written a few articles on this topic.
Go to and search for "customer service".
You will get a few articles.
If you like the ideas, please pass them to the companies that you are a customer.

Customer Service - how to lose customers

Read this article

My view
Many companies adopt the wrong strategy, causing a lot of pain for their customers. These companies apply technology in a bad way. A common sense approach and the ability to provide service from the perspective of the customer can make a lot of difference.Here are  my suggestions to improve customer service.

Explanation of Exchange Traded Funds

Read this article.

It is a good article to explain the difference between an ETF and a mutual fund.

Global penetration of the internet

Read this article

My view
The Internet has changed the world significantly. It has the potential to make further changes, to improve efficiency. But, the world economy has to be restructured to allow the benefits of the productivity improvement to lead to a better quality of life. Although the internet penetration is less than 30%, this figure is already very significant. Those without the internet connection can get the help of family members or neighbors to access the services through the internet. But, government and business entities need to learn how to use the power of the internet.

You can read my "Story of Bright Town" to understand how the Internet can improve efficiency in e-government services. The soft copy is available free. The hard copy can be bought here.

There is a prototype portal based on this book, which can be accessed here.

Hot money

Read this article

My views
The developed economies have reduced the interest rate to near zero. They are printing a lot of money. These money are moving into the emerging economies causing their currency to appreciate and asset bubbles. It is how messy the globalised world has now become.

Currency wars threaten global recovery

Read this article:

My view
Here is another example of the failure of the current global system. There is no point in having a global economy, if it causes the types of economic problems that have to be addressed through "currency manipulation". It is better to allow countries to have some form of protectionism to preserve their national identity and interest, rather than have a globalised economy that serves the interest of the large global companies.

Read my view on "restructure the global economy" in

Over-charging for a simple transaction

Dear Mr. Tan

I would like to share with your readers on my recent experiences with Singnet. 

1. I relocated recently from my home to my mum home. I need to relocate my ADSL line. When I received my bill, I was shocked,there was a relocation charge of $40. I called to enquire on the charges,they told me it was their guideline. I asked why was I charged - no one came to my mum place to do or check anything?  They only need to  key some information to update my address and they are charging a ridiculous sum of $40. They kept saying it's their guideline. Finally,after transferring and putting me on hold, they said,they will waive the charges. 

2. I also recently received a letter stating that I can upgrade my broadband. I called them but they they told me that I was not eligible, because I was still under my previous contract. Whey did they send that offer letter to me? They said that it was sent to all subscribers .i told them - isn't it wasting of my time and his time for me to call and enquire? And also wasting of paper and resources? What if, they sent out 100000 letters and only 10000 are eligible to upgrade? 

The two incidents,really make me 'shocked',especially coming from one of Singapore's biggest company - the amount of money and resources are wasted and good luck to their shareholders! 

I agree with you that our big trusted companies are now overcharging consumers to increase their profit. I suggest that you write to the St Times about this matter. 

Restructuring the Global Economy

I watched the discussions in CNBC with investment experts who monitor the economic news in USA and the financial markets. These experts listen to the economists, including speeches by the Fed chairman Ben Bernanke, and gave their views.

They are pessimistic about the ability of the US to create jobs, in spite of near zero interest rate and the large amounts of quantitative easing, i.e. printing of money. There is no confidence and insufficient consumer demand. In this environment, businesses are reluctant to expand capacity and create employment.  One influential person, the co-CEO of Pimco, Mohamed El-Erian said that the global system needs to be "re-structured".

I agree with his view about the need for re-structuring. We need to get away from the unbridled globalisation that is causing the damaging international competition and the wide disparity of income - both of which have got out of control.

My views on the areas that need to be re-structured are set out in this article:

Tan Kin Lian

Thursday, October 07, 2010

Monitoring of Server and I.T Security

It is important for a business enterprise to have a robust server and security of its I.T. system. Read this case study of how it can be done economically.

Transforming Malaysian Healthcare

PICTURE this: a middle-income individual requires specialist medical attention. Under the current dual-tiered healthcare system, he has the option of going to a government-led, public-funded hospital or a thriving private hospital with first-class facilities and shorter waiting time.
Which option would he choose? This depends on three important factors: cost involved, service quality and urgency/complexity of the medical situation. But one fact remains: he will likely be faced with a higher medical bill than ever before. The cost of healthcare has rapidly escalated in the last decade. How expensive will it be in the next five to 10 years?

My observation
Malaysia is now grappling with the issues faced by Singapore earlier. Perhaps they can learn the mistakes to avoid and find a way to better manage the escalation in health care cost.

Letter from Rachel Zeng

Dear Mr Lee, 
May I extend my most sincere condolence to you for the demise of your beloved wife Madam Kwa Geok Choo. 
Despite disagreeing with your political tactics over the years, I can deeply empathise with how it feels to lose a loved one to mortality, especially when more than 60 years of love, companionship and good memories have transpired. 
As you grieve over your unfortunate loss, do allow me to gently remind you that time is running out - for yourself and the surviving political detainees who were arrested and tortured without trial, reportedly under your instructions. 
.... Rachel Zeng

Contingency Fee for Professionals

Should a system of contingency fee be practiced for lawyers and medical specialists, so that they get paid their fee only on successful outcome of the case? Here are the results of a survey of 34 people.

Medishield covers upto age 85

About 70% of respondents to my survey indicated that they prefer to be insured under Medishield after the retire from work. The premium is lower (about one-third of a Private Shield) and the co-payment is also lower. They have to used the subsidized wards (B2 and C).

The remaining 30% indicate that they will opt for Private Shield. The key result cited is that Medishield stops at age 85 and Private Shield can be continued beyond age 85. In my view, this is not necessary to worry about this feature because:
  • It is likely that Medishield will be extended beyond age 85 at a future date
  • Even if Medishield is not available beyond age 85, there is no need for an elderly person beyond age 85 to spend a lot of money for treating a serious illness, as the chance of successful recovery is very low.
It is better to spend the money for a better quality of life at a younger age. 

Damage to home caused by a falling tree

A consumer ask his insurance company if the home insurance policy covers damage to the home caused by a falling tree. He gets a vague answer. Here is my view about the coverage.

Practical Guide on Financial Planning.

Insurance for co-payment

The Medishield and Private Shield plans require the patient to co-pay the part of the hospital bill, comprising of the deductible and co-insurance. Some insurance companies offer a rider to cover the co-payment. Many insurance agents sell the rider as an attractive benefit. In my view, it is all right for the consumer to self-insure and make the co-payments out of  savings (e.g. Medisave), rather than pay the insurance premium (that includes a loading for expenses and profit).

My explanation can be found here: (look for Medishield and private Shield).

Wednesday, October 06, 2010

Security and monitoring of the server in the data center

A local company Typent offers a service in I.T. Outsourcing. I engaged them to look into the security of my dedicated service, which is located at a data center. I did not experience any security issues previously, but I wanted to make sure that if there is a security threat in the future, I will be ready to respond.

Typent run a tool to scan the server over a few hours. They were able to identify a few potential security threats that could arise in the future. They advised the installation of a firewall and anti-virus software on the server and also for the server software to be updated. As a hardware firewall is expensive, I decided (on their recommendation) to implement a software firewall to provide first level protection. They assisted me in the implementation of these measures. They also helped me to install a virtual server, which can be used in an emergency.

I also engaged Typent to provide a regular monitoring service on my server. This service allows them to be alerted on any potential threat to the server or the possibility of a potential failure of the hardware. The monitoring is continuous and an email alert will be sent immediately on any of these incidents. This allows Typent to see if any corrective action needs to be taken immediately.

The cost of the initial and regular service is quite small and is easily within the budget of any small enterprise. I recommend that any enterprise that users a server for their business, should have this type of monitoring service. Take precaution before any failure or threat occurs, and be ready to respond when it arises. If you are interested to use the service of Typent, send an email to

Typent also recommend the creation of a virtual machine (that contain a copy of the image of the operating system) that can be called in an emergency.

Singapore General Election Portal (SGEP)

There are a few interesting articles posted in the SGEP.
Go to to view the latest postings.
You can search for an article using the keyword, e.g. "minimum wage" to view the postings on this topic.
Please keep a bookmark to visit this portal regularly.
You can also include this link in the Google Reader.

I wish to invite readers to contribute letters to this portal to give your views on what you like to see happen in Singapore.

Medishield and Private Shield

Take part in this survey

This article explains why it is better to be insured under Medishield, compared to Private Shield, especially for the elderly and retired people. The consumer pays a lower premium and a lower co-payment under Medishield (by going to subsidized wards) and get a similar quality of medical care.

Additional comment
I like to ask consumers to read my book, Practical Guide on Financial Planning, to be educated about insurance and investment. Please send questions to me after you have bought and read my book.

Good manners, not laws, key to web privacy

British Home Office minister Damian Green has said
it was not up to government to stop people invading the privacy of others
by posting information, photos or films of them online.
He wanted the state to intrude less into people's lives.

My view
It is difficult for an individual person to take action against another person who invades privacy. The Government should have people who can attend to these complaints. They can write to the alleged offender and ask them to remove the offending material. If the offender refuses, the matter can be taken by the next step. We cannot expect the citizens to engage a lawyer (which is costly). This is why the Government is elected to run the country.

How to Stop Rogue Automatic Payments A

look at consumers' rights when a company won't stop
billing your credit card or siphoning money from your debit card or checking accounts.
(Don't miss Readers' Comments)

My view
A company that makes unjustified deduction should be considered as cheating and should be prosecuted. This will stop the bad practice. If it is a mistake, they can apologize and remedy the situation. But, we need to have the authority taking the responsibility to attend to this matter. They cannot reduce their manpower and gave the excuse that they are saving cost. It is the duty of the authority to stop cheating.

Investment scams

It’s not hard to find the hottest investment scams.
Just read the business headlines...
State securities cops are spotting some compelling pitches
that are trapping investors all over the country.

My view
The Police should employ more people who can have the time to pursue these investment scams. This will create a few additional jobs for the investigators. It will make the economy more efficient as it prevents a lot of people finding employment by participating in these investment scams.

Inflated injury claim

Here is a case study of an alleged inflated injury claim caused by a motor accident. Motorists are likely to encounter such situation during their years of driving.

Global economy need to be fixed

I read about the inability of the US economy to create jobs to reduce the unemployment rate. Many countries are now devaluing their currency to increase competitiveness. They are also reducing interest rate to near zero, causing cheap money to flow to Asian countries, causing asset bubbles. This will bring further turmoil to the global economy and financial market.

There are some talks about fixing the global economy. It is not easy. The current system is rotten and cannot be fixed easily. The root of this problem is ....... make a guess! Give your views in this comment. I will write my views later.

Home insurance and damage by falling tree

Hi Mr Tan, 
Due to the recent heavy rainfall and floods in Singapore that caused trees to fall, I have been trying to buy home assurance to cover for fallen trees. But in vain. Only one underwriter seem to indicate vaguely its "coverage or non-coverage" for falling trees when it repeatedly quoted its policy on "insured perils" and its corresponding definitions. 

To a layman like me, I read these legal jargons as ambiguous and deceptive. I wrote to the GIA and they are equally evasive. They simply cannot explain in layman terms my simple qn: "if a tree falls on my house, will the insurance cover for the damage?" 

A simple question and yet no direct simple answer. But if I buy the cover and a tree falls, then only they will tell me a direct answer to my simple question. 

And their answer will be "No, it does not cover because fallen trees do not come under what is defined as "insured perils". Why not tell me now in this very direct and simple terms instead of relying on me interpreting their clauses and definition? 

Very exasperating. Only shows that insurance companies are not totally honest and upfront when selling their policies. 

My observation
In my view, the insurance policy should cover damage by falling tree, as it is not an excluded hazard and the policy should normally cover all perils. It is best to confirm with the insurance company. Their inability to give a clear answer is appalling. I advised the consumer to write to the Straits Times Forum page.

NCD Protector

The General Insurance Association of Singapore's (GIA) reply on Monday
('GIA's advice to motorists on no-claims discount')
did not address the basic concern...

A fairer contract for motorists

THE General Insurance Association of Singapore's reply on Monday
('GIA's advice to motorists on no-claims discount')...
It defeats the purpose of purchasing the protector
in the first place.
Tan Kin Lian

Read the letter from FISCA here

Tuesday, October 05, 2010

Banks offer innovative term deposit products

Standard Chartered Bank yesterday unveiled a step-up 12-month time deposit which allows for early withdrawal but rewards savers if they leave the funds for the full period.

The step-up time deposit pays up to one per cent if the funds are left for the entire 12 months, said Stanchart.

For the first three months, the deposit earns 0.3 per cent, with the interest rate increasing to 0.4 per cent for the next three months; 0.6 per cent for the third three-month period and one per cent for the last three months.

The average interest rate works out to 0.58 per cent for 12 months.

Another bank with an innovative time deposit product is Maybank which is throwing in a lucky draw of $1,000 Best Denki vouchers.

Its online isavvy time deposit pays an upfront interest of 0.25 per cent and the rest of the interest upon maturity of the deposit. isavvy offers time deposits with maturities ranging from three months to 36 months.

The highest interest rate of 1.85 per cent is for the 36-month time deposit for amounts between $250,000 and $1 million.
Maybank's promotion ends on Nov 30 this year

Asia Europe Foundation

There are two interesting discussion in the conference in Brussels (where PM Lee Hsien Loong was supposed to speak but had to return due to the demise of his mother).

The topics are:

  • Who should pay for the cost of higher education?
  • Giving citizens access to information is a way to combat corruption.

Happy Planet Index

The speaker talks about how we have been focusing on the negative side of life - fear and greed. He suggests that we have to focus on the positive side. View it.

Yield on investment

This article explains how you can use Excel to calculate the accumulated amount of your savings and the net yield after allowing for the effect of deduction of a life insurance policy.

How to read the benefit illustration (ILP)

Some consumers find it difficult to locate the relevant figures from the benefit illustration to compute the effect of deduction as a percentage of the accumulated premium (to compare against the benchmark of 20%) for 25 years.

This article shows how you can get the relevant figures from a Benefit Illustration to see if you are getting a fair yield on your life insurance policy. It applies to an investment-linked policy. (Note: A different format is used for a participating policy).

Invest your savings

Here are some tips on how you can invest your savings in a low cost investment fund to earn a target yield of 5% per annum, and manage your risk over the long term.

How nations are trapped by globalisation

The problems faced by Singapore are predicted in the book entitled "The Trap" by James Goldsmith.

America's deepening moral crisis

The language of collective compassion has been abandoned in the U.S.,
and no politician dare even mention helping the poor.

My view
Many countries, including Singapore, have a wide disparity in income distribution. Some people are super rich but many others are poor. I have said, "to support every rich billionaire, we need many hundred thousand people to be poor". Some disparity of income is necessary to get people to work a little harder, but extreme disparity is exploitation - as it forces the lower income to work so much more hours, just to earn enough to pay for the cost of living.

End the Credit Rating Addiction

The IMF recommends we “End the Credit Rating Addiction”

Tax rates worldwide

or why you should move to New Zealand

Monday, October 04, 2010

Financial Regulation in Singapore

My observation
The light touch regulation has been bad for retail investors, both local and overseas, and has given a bad reputation to Singapore.

More teeth needed to curb false ads

Last year, a top multinational cosmetics company ran a national press advertisement in Britain ...
ASA asked for substantiation... rejected the studies... banned in its original form.
The same advertisement ran its full course in Singapore.
If a complaint had been made to ASAS,
would it have had the clout to take on a huge multinational corporation?
Cheng Shoong Tat

GIA's advice to motorists on no-claims discount

I REFER to the letter by Mr Derrick D'Souza last Thursday
('Get motorists up to speed on no-claim bonus protector').
GIA advises motorists to fully understand all aspects of this product
when considering its purchase...
Mark Lim Executive Director General Insurance Association of Singapore

Motor accident with injury

Here is a case study of a motorist who met with an accident involving injury. The insurance company asked him to settle the injury claim out of court. He is worried about having to attend court.

Kwa Geok Choo (Mrs. Lee Kuan Yew)

Here are a few nice words about Mrs. Lee.

Sunday, October 03, 2010

Mobile games on Apple

I have uploaded four free games (Tangram and Shape Quiz) on the Apple App store for the past 4 weeks. There were 2,500 downloads - about 100 a day. Downloads from Singapore account for only 6% of the total. The top ranking countries are USA, Japan, France, UK and Singapore. Yes, Singapore is a small country.

To search for my games, look for "Tan Kin Lian". You will see 4 Lite games (free).

Click here.

Condolences to the family of Mrs. Lee Kuan Yew

Deepest condolences.

Motor insurance premium for the elderly

A policyholder wrote a letter to the Straits times to complain that his premium was increased after he became 70 years old. A journalist asked for me if this increase was "fair".

My views can be found in

Blog Archive