Thursday, December 31, 2015

Low payout ratio

Dear Mr. Tan

Can you explain how to read the claim ratio and the profit ratio of critical illness insurance shown on this page?

http://tklcloud.com/MAS/publicview.aspx?class=18

For the top company PRU, the claim ratio is 18.3% and the profit ratio is 27.1%, giving a total of 45.4%. What happened to the remaining 55.6%?

REPLY
The remaining 55.6% goes towards commission, expenses and increase in reserves.

The claim ratio is very low. For every $100 in premium, the policyholder gets back only $18 in claims. This payout ratio is worse that 4D or Toto!.


1 comment:

Anonymous said...

Yesterday, on the 1st Jan 2016, the Balanced Score Card came into effect. Also product incentives for greedy agents and other incentives are banned. Together they should send many insurance agents, especially aunty insurance agents into exile. Because without these incentives they can't sell. Without incentives these greedy unscrupulous agents are not bold enough to tell lies and mis-sell the products to their aunty and uncle customers who are usually their victims.
It is so ridiculous, with aunties and uncles calling themselves "Senior Financial consultants" prowling the streets in search of their victims, when they know nothing about FINANCE from one end to the other. How come MAS is not regulating the use of misleading titles? These people have only glib tongues like all conmen and women.
MAS, are you sleeping? Or are you in cahoot with the insurers? Or are you afraid of them?

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