Dear Mr Tan
I have been a policy holder of Income since 1993. I am glad to inform you that Income remains my preferred insurer for me and my family to this day.
It is thus with great regret that I learn that you are leaving Income, as I feel that you really have the benefits of the policy holders at heart and really take the effort to educate the public on insurance and personal financial planning.
Hopefully, your successor will be a person who holds fast to these ideals too, who will continue to look after the welfare of Singaporeans.
If I could share with you on a personal basis - I like Income as I feel that its policies are priced fairly and clear and easy to understand, the management looks after the interests of policyholders, and the agents (or at least my agent) are honest, upfront and do not give me any b*llsh*t. (please pardon me!)
My experience with other insurers have not been too pleasant, as I always feel that they try to sell me a product that either 1) they do not understand, or 2) is not useful to me, or 3) gives them lots of commission but does not benefit me, or 4) try to oversell a product without due consideration of whether I can afford it in the long run.
Kudos to you and Income for a job well done, and I wish you all the best in your future pursuits.
Best regards
JY
---------------
Dear JY
Thank you for your kind words. Wish you all the best.
Tan Kin Lian
Monday, October 23, 2006
Negative headline is unfair
Last week, a leading newspaper had a headline that suggested that a prominient entrepreneur (a multi-millionaire) based in Singapore, is sued for fraud.
This created an impression among a few knowledgeable people that this entrepreneur is acting dishonestly.
I pointed out that the suit was taken by a private individual. The circumstance of the dispute is under litigation.
It was unfair of the newspaper to use a headline that created a wrong impression among the general public.
It is a different matter, if the case is taken by the public prosecutor. The prosecutor has a duty to carry out some investigation to be satisfied that there is sufficient evidence to press a case.
I urge the public to be careful about reading the headlines, especially if there is a tendency for some newspaper to be sensational or negative. Do take a more generous view about people who may be charged or sued unfairly.
This created an impression among a few knowledgeable people that this entrepreneur is acting dishonestly.
I pointed out that the suit was taken by a private individual. The circumstance of the dispute is under litigation.
It was unfair of the newspaper to use a headline that created a wrong impression among the general public.
It is a different matter, if the case is taken by the public prosecutor. The prosecutor has a duty to carry out some investigation to be satisfied that there is sufficient evidence to press a case.
I urge the public to be careful about reading the headlines, especially if there is a tendency for some newspaper to be sensational or negative. Do take a more generous view about people who may be charged or sued unfairly.
Sunday, October 22, 2006
Use Skype for text meetings
I intend to use Skype for meetings. Up to 100 people can be involved in the chat meeting (ie communicate by typing).
This new method can also be used in a meetings within Singapore, involving people at various locations. It saves time travelling to the meeting.
It is especially useful, if some of the participants are overseas.
Discussion with text message is also quite convenient.
This new method can also be used in a meetings within Singapore, involving people at various locations. It saves time travelling to the meeting.
It is especially useful, if some of the participants are overseas.
Discussion with text message is also quite convenient.
Use Skype for International Calls
I have started to use Skype for international calls. It works well. I can speak from my personal computer, and contact the other party using their telephone number. I have to pay about 5 cents a minute for the call. The voice quality is good.
If both parties arranges a scheduled time, they can talk or chat (using text messages) over the computer. This is free.
It is a cheap and wonderful way to communicate.
If both parties arranges a scheduled time, they can talk or chat (using text messages) over the computer. This is free.
It is a cheap and wonderful way to communicate.
How can employers prevent the escalation of medical expenses?
Question: Are employees' medical expenses continually on the rise? What can bosses do
about this situation?
Reply:
Medical expenses for employees are likely to increase in the future as the workforce gets older.
A good way for the employer to be sheltered from the increasing cost is to pay a fixed sum to the employee, according to the level of the employee. This allows the employee to buy their own personal medical insurance. Many insurance companies now offer a Shield plan that provides lifetime coverage. The premium in each year depends on the age of the insured person and on the type of plan that is selected.
The employee can select a plan that meets his or her personal needs. They can choose a plan that covers a low class of ward and pay a lower cost. If they choose a plan that covers a higher class of ward, they have to pay a higher cost. As the employee has to pay for their own cost (after receiving the fixed subsidy from the employer), more are likely to choose a more cost effective plan.
This system has a further advantage. When the employee changes his or her job, the employee can continue the coverage under the Shield plan. The plan is not linked to the specific employer.
The Shield plan covers in-hospital treatment, and outpatient treatment for certain specified illnesses. The empoyee will have have to pay on their own for visits to the general practitioner or specialist. They should avoid seeing the doctor for minor ailments, as they now have to pay on their own. They can learn how to take care of the common ailments on their own.
Tan Kin Lian
about this situation?
Reply:
Medical expenses for employees are likely to increase in the future as the workforce gets older.
A good way for the employer to be sheltered from the increasing cost is to pay a fixed sum to the employee, according to the level of the employee. This allows the employee to buy their own personal medical insurance. Many insurance companies now offer a Shield plan that provides lifetime coverage. The premium in each year depends on the age of the insured person and on the type of plan that is selected.
The employee can select a plan that meets his or her personal needs. They can choose a plan that covers a low class of ward and pay a lower cost. If they choose a plan that covers a higher class of ward, they have to pay a higher cost. As the employee has to pay for their own cost (after receiving the fixed subsidy from the employer), more are likely to choose a more cost effective plan.
This system has a further advantage. When the employee changes his or her job, the employee can continue the coverage under the Shield plan. The plan is not linked to the specific employer.
The Shield plan covers in-hospital treatment, and outpatient treatment for certain specified illnesses. The empoyee will have have to pay on their own for visits to the general practitioner or specialist. They should avoid seeing the doctor for minor ailments, as they now have to pay on their own. They can learn how to take care of the common ailments on their own.
Tan Kin Lian
Saturday, October 21, 2006
Reply to New Paper: Claim by Anthony Ng
18 October 2006
Editor
New Paper
I refer to your report entitled "Court sets aside attempt to make him bankrupt" (New Paper, 16th Oct 2006).
I wish to explain how a theft claim is settled by NTUC Income, and the reasons for our approach.
During the past 12 months, we settled a total of 250 theft claims representing 96% of all theft claims received by us. The remaining 4% of the claims were withdrawn due to the recovery of the vehicle. On average, it takes about 3.5 months for a theft claim to be settled.
The market value of the stolen vehicle is establised in accordance with our practice note, which is given to all claimants. This has worked well and has resulted in obtaining a fair value that is accepted by the claimants.
This is how we handle a theft claim.
We require the policyholder to furnish us a police report and complete a theft claim form. We wait for the police to complete its investigation into the theft, to ensure that it is a genuine theft. The police investigation usually takes about 3 months. During this time, we interview the owner on the circumstances relating to the theft and agree with the owner on a fair market value for the vehicle.
Here are the facts relating to Anthony Ng's case:
Mr Ng reported to the police that the car was lost on 28 June 2005. He did not notify us about the theft until 6 September 2005, i.e. a delay of 8 weeks. He had actually breached the policy condition for failure to notify us of the theft immediately, but we did not hold this breach against him.
We contacted Mr Ng on three occasions to discuss the circumstances of the claim, but he did not turn up. Subsequently, he was not contactable. Up to now, we not been able to made any offer to Mr Ng on the settlement of the theft claim, due to his lack of cooperation.
About two years ago, Mr Ng had taken a loan from our loan department for the purchase of the car. He failed to pay the loan instalments on time. Mr Ng had actually defaulted on the loan repayment prior to the theft of the car. A total of 7 installments were outstanding by the time our loan department appointed our lawyer to take legal action on 1 November 2005.
My loan department decided to take legal action as they were not satisfied with the non-payment of the loan instalments and his lack of cooperation in expediting the settlement of the theft claim.
In making the case for bankrupcy, the lawyer acting for our loan department used a value for the car as being the sum that the financial institution can recover in the event that the theft claims is not successful. This value comprises the value of the road tax, COE and the PARF value.
I wish to confirm that the amount to be settled for the theft case will be in accordance with our practice note, and will be significantly higher than the sum reported by the New Paper.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Editor
New Paper
I refer to your report entitled "Court sets aside attempt to make him bankrupt" (New Paper, 16th Oct 2006).
I wish to explain how a theft claim is settled by NTUC Income, and the reasons for our approach.
During the past 12 months, we settled a total of 250 theft claims representing 96% of all theft claims received by us. The remaining 4% of the claims were withdrawn due to the recovery of the vehicle. On average, it takes about 3.5 months for a theft claim to be settled.
The market value of the stolen vehicle is establised in accordance with our practice note, which is given to all claimants. This has worked well and has resulted in obtaining a fair value that is accepted by the claimants.
This is how we handle a theft claim.
We require the policyholder to furnish us a police report and complete a theft claim form. We wait for the police to complete its investigation into the theft, to ensure that it is a genuine theft. The police investigation usually takes about 3 months. During this time, we interview the owner on the circumstances relating to the theft and agree with the owner on a fair market value for the vehicle.
Here are the facts relating to Anthony Ng's case:
Mr Ng reported to the police that the car was lost on 28 June 2005. He did not notify us about the theft until 6 September 2005, i.e. a delay of 8 weeks. He had actually breached the policy condition for failure to notify us of the theft immediately, but we did not hold this breach against him.
We contacted Mr Ng on three occasions to discuss the circumstances of the claim, but he did not turn up. Subsequently, he was not contactable. Up to now, we not been able to made any offer to Mr Ng on the settlement of the theft claim, due to his lack of cooperation.
About two years ago, Mr Ng had taken a loan from our loan department for the purchase of the car. He failed to pay the loan instalments on time. Mr Ng had actually defaulted on the loan repayment prior to the theft of the car. A total of 7 installments were outstanding by the time our loan department appointed our lawyer to take legal action on 1 November 2005.
My loan department decided to take legal action as they were not satisfied with the non-payment of the loan instalments and his lack of cooperation in expediting the settlement of the theft claim.
In making the case for bankrupcy, the lawyer acting for our loan department used a value for the car as being the sum that the financial institution can recover in the event that the theft claims is not successful. This value comprises the value of the road tax, COE and the PARF value.
I wish to confirm that the amount to be settled for the theft case will be in accordance with our practice note, and will be significantly higher than the sum reported by the New Paper.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Zaobao Interview: My Insurance Plans
How well have you been insured? what kind of policies you hold? What kind of protection you are giving to your family members?
Reply:
When my children were young, I bought term insurance and whole life insurance. The total amount of my insurance was about five years of my annual income. I bought critidal illness insurance for my wife. I also bought insurance to my three children, to cover them against accidents, hospital expenses and to save for their education.
I invest in investment linked plans (ILP) to save for my retirement. Most of my investments are in the large, well diversified, low charge plan offered by NTUC Income. They earned a very attractive return during the past few years, ie more than 10% per annum. Over a longer period of 10 toi 20 years, I expect an average return of 5% to 6% per annum. I think that this is the most suitable type of investment for most ordinary people.
Tan Kin Lian
Reply:
When my children were young, I bought term insurance and whole life insurance. The total amount of my insurance was about five years of my annual income. I bought critidal illness insurance for my wife. I also bought insurance to my three children, to cover them against accidents, hospital expenses and to save for their education.
I invest in investment linked plans (ILP) to save for my retirement. Most of my investments are in the large, well diversified, low charge plan offered by NTUC Income. They earned a very attractive return during the past few years, ie more than 10% per annum. Over a longer period of 10 toi 20 years, I expect an average return of 5% to 6% per annum. I think that this is the most suitable type of investment for most ordinary people.
Tan Kin Lian
Zaobao Interview: Business Center
You set up business centres to allow consumers to seek free financial and insurance advice and having salaried agents to man the counters.
Some Income agents felt they have been undercut. Has Income indeed gotten such feedback from agents on this? If so, what's the nature of the feedback?
What about on the part of "walk-in" consumers, are they worried about the follow-up of their cases. What's the feedback of consumers on this thus far? Will appreciate that you give an overall picture on number of people who have visited the business centres and bought some policieis. How many such centres are there now?
Reply:
This year, we introduced serveral sales promotions and marketing campaigns. They provide a lot of sale opportunities for our 700 full time insurance agents. We are able to generate 25,000 new sales leads each month. Most of our active agents are so busy following up on these sales leads that they have no time to worry about the business centers.
A small number of less active agents still complain about the business center, but this is diminishing. A small handful who were strongly against this concept have left us. The remaining agents are adjusting well and are benefitting from the new sales opportunities.
We set up the business centers to cater to a new market. There are customers who prefer to visit or telephone our business center to talk to a salaried consultant. As the consultant are not paid any commission, the customer feel that they are not being pushed to buy the product. The feedback from the customers who visit the business center is positive. The business centers see a steady increase of business.
We operate two business centers now, with 80 salaried consultants. We aim to open a total of four business centers with 200 salaried consultants by end of 2007.
Tan Kin Lian
Some Income agents felt they have been undercut. Has Income indeed gotten such feedback from agents on this? If so, what's the nature of the feedback?
What about on the part of "walk-in" consumers, are they worried about the follow-up of their cases. What's the feedback of consumers on this thus far? Will appreciate that you give an overall picture on number of people who have visited the business centres and bought some policieis. How many such centres are there now?
Reply:
This year, we introduced serveral sales promotions and marketing campaigns. They provide a lot of sale opportunities for our 700 full time insurance agents. We are able to generate 25,000 new sales leads each month. Most of our active agents are so busy following up on these sales leads that they have no time to worry about the business centers.
A small number of less active agents still complain about the business center, but this is diminishing. A small handful who were strongly against this concept have left us. The remaining agents are adjusting well and are benefitting from the new sales opportunities.
We set up the business centers to cater to a new market. There are customers who prefer to visit or telephone our business center to talk to a salaried consultant. As the consultant are not paid any commission, the customer feel that they are not being pushed to buy the product. The feedback from the customers who visit the business center is positive. The business centers see a steady increase of business.
We operate two business centers now, with 80 salaried consultants. We aim to open a total of four business centers with 200 salaried consultants by end of 2007.
Tan Kin Lian
Zaobao Interview: Motor Insurance
One big recent issue was that purchasers of cars cannot choose their insurance company - you have termed that anti-competitive. However, Income has also earlier insisted that repair work be done at its designated workshops. How do you reconcile this "irony"?
Many said Income is trying to salvage its diminishing market share in motor insurance. I am sure there are more reasons to this, perhaps you can enlighten us?
Reply
Under our motor insurance plan, we will arrange the repairs at our designated Quality workshop. This allows us to ensure the quality of repair and bring down the repair cost, by preventing inflated claims. We are able to bring down the cost of insurance by 10% to 15% for our customers.
A consumer who does not like our motor insurance product is free to insure his or her car with any of 30 insurance companies in the market. More than 30% choose NTUC Income to enjoy our service and lower premium rates.
This year, we suffer a temporary decline in market share as the distributors of new cars coerce their customers to take the insurance with their tied insurer. The customer is not given a free choice. As the distributor has a monopoly in the distribution of the car models, they are able to control the market for the purchase of insurance on new cars. As many people changed their cars during the past year, we lost out on this market.
We expect to regain our market share when the owners buy their own insurance for the second year.
Tan Kin Lian
Many said Income is trying to salvage its diminishing market share in motor insurance. I am sure there are more reasons to this, perhaps you can enlighten us?
Reply
Under our motor insurance plan, we will arrange the repairs at our designated Quality workshop. This allows us to ensure the quality of repair and bring down the repair cost, by preventing inflated claims. We are able to bring down the cost of insurance by 10% to 15% for our customers.
A consumer who does not like our motor insurance product is free to insure his or her car with any of 30 insurance companies in the market. More than 30% choose NTUC Income to enjoy our service and lower premium rates.
This year, we suffer a temporary decline in market share as the distributors of new cars coerce their customers to take the insurance with their tied insurer. The customer is not given a free choice. As the distributor has a monopoly in the distribution of the car models, they are able to control the market for the purchase of insurance on new cars. As many people changed their cars during the past year, we lost out on this market.
We expect to regain our market share when the owners buy their own insurance for the second year.
Tan Kin Lian
Zaobao Interview: Supplementary Retirement Scheme
Not saving enough for retirement is now a common worry. You have earlier suggested that the government raise the cap on tax relief so that more can plan for their retirement (including buying insurance). Can you give more details on this proposal?
Reply:
The current rate of contribution to Centeral Provident Fund is probably adequate for most people earning up to $4,000 a month, if they do not take out too much of their savings to pay for their home.
For people who earn more than $4,000 a month, the contribution to CPF is capped at this salary ceiling. They are not allowed to contribute beyond this ceiling and enjoy any tax relief.
The government has introduced a Supplementary Retirement Scheme to allow people to make additional contributions for their retirement. The amount allowed to be contributed to SRS is quite low, at current levels. This makes the SRS not attractive.
I suggest that the contribution to SRS should be increased to 20% of annual income, less contribution to the CPF. This will allow the higher income earners to make supplemnentary savings for their retirement.
Tan Kin Lian
Reply:
The current rate of contribution to Centeral Provident Fund is probably adequate for most people earning up to $4,000 a month, if they do not take out too much of their savings to pay for their home.
For people who earn more than $4,000 a month, the contribution to CPF is capped at this salary ceiling. They are not allowed to contribute beyond this ceiling and enjoy any tax relief.
The government has introduced a Supplementary Retirement Scheme to allow people to make additional contributions for their retirement. The amount allowed to be contributed to SRS is quite low, at current levels. This makes the SRS not attractive.
I suggest that the contribution to SRS should be increased to 20% of annual income, less contribution to the CPF. This will allow the higher income earners to make supplemnentary savings for their retirement.
Tan Kin Lian
Zaobao Interview: Life Insurance
There has often been complaints by consumers over different facets of insurance. They mainly pertain to grievances over buying products that do not deliver what's promised. What is your advice to consumers who wish to buy insurance or who have already bought insurance?
Reply:
Life insurance is important. A breadwinner needs life insurance to provide a sum of money to the family, in the event of his or her premature death or permanent disability. The need is greater for families with young children.
Many insurance companies offer products to meet this need, but they bundled the insurance needs with compulsory savings. These are sold as endowment and whole life products. These products are sold by insurance agents who earn high commission. The company also incur expenses in their administration, provide for the cost of insurance and make a profit for their shareholders. These expenses take away about 2% to 3% on the investment yield.
In the past, when the investment yield was high, the insurance company can still provide a fairly attractive return to the policyholder. But, when the investment yield came down in recent years, the net yield was unattractive.
My advice to consumer is to find an insurance company that incurs low expenses and is able to give a better return to the policyholder. The difference can be as much as 15% to 25%, depending on the type of insurance plan and the period of insurance. If an insurance company with high expenses pays you $100,000 on maturity of the policy, another company with low expenses may be able to pay you $15,000 to $25,000 more.
Another option is to buy term insurance to protect your family. The cost is term insurance is less than 20% of the cost of a whole life policy. You can invest the remainder of your savings separately in an investment fund. You will be able to get a better return on your savings. This is usually much more than the cash value of your endowment or whole life policy.
Tan Kin Lian
Reply:
Life insurance is important. A breadwinner needs life insurance to provide a sum of money to the family, in the event of his or her premature death or permanent disability. The need is greater for families with young children.
Many insurance companies offer products to meet this need, but they bundled the insurance needs with compulsory savings. These are sold as endowment and whole life products. These products are sold by insurance agents who earn high commission. The company also incur expenses in their administration, provide for the cost of insurance and make a profit for their shareholders. These expenses take away about 2% to 3% on the investment yield.
In the past, when the investment yield was high, the insurance company can still provide a fairly attractive return to the policyholder. But, when the investment yield came down in recent years, the net yield was unattractive.
My advice to consumer is to find an insurance company that incurs low expenses and is able to give a better return to the policyholder. The difference can be as much as 15% to 25%, depending on the type of insurance plan and the period of insurance. If an insurance company with high expenses pays you $100,000 on maturity of the policy, another company with low expenses may be able to pay you $15,000 to $25,000 more.
Another option is to buy term insurance to protect your family. The cost is term insurance is less than 20% of the cost of a whole life policy. You can invest the remainder of your savings separately in an investment fund. You will be able to get a better return on your savings. This is usually much more than the cash value of your endowment or whole life policy.
Tan Kin Lian
Call 63 INCOME for service
Dear Mr Tan,
I am a policy holder for medical insurance. Recently I was hospitalised. Upon discharged I tried to contact my adviser KS. I called 3 times in 3 days and left message for her to return call but I did not get any response.
I am disappointed that the adviser did not respond to me. After the 3 days of disappointment, I manage to contact the claims department (63321133). I spoke to a gentleman, very pleasant, very helpful.
Will I buy another insurance from NTUC Income. Definitely not.
Best regards,
LWK
--------------------------
Dear LWK
We have contacted our insurance adviser, KS. This is her explanation. In view of her explanation, I hope you will forgive this lapse in service.
Tan Li Leng
Head - Field Department
----------------------------
Dear LWK
I am sorry about this lapse of service.
We encourage our policyholders to call our hotline 63INCOME (6346 2663) which provides 24 hour service.
It will avoid the occasional lack of follow up by the agent (which may be due to reasons beyond our control).
Tan Kin Lian
CEO, NTUC Income
I am a policy holder for medical insurance. Recently I was hospitalised. Upon discharged I tried to contact my adviser KS. I called 3 times in 3 days and left message for her to return call but I did not get any response.
I am disappointed that the adviser did not respond to me. After the 3 days of disappointment, I manage to contact the claims department (63321133). I spoke to a gentleman, very pleasant, very helpful.
Will I buy another insurance from NTUC Income. Definitely not.
Best regards,
LWK
--------------------------
Dear LWK
We have contacted our insurance adviser, KS. This is her explanation. In view of her explanation, I hope you will forgive this lapse in service.
Tan Li Leng
Head - Field Department
----------------------------
Dear LWK
I am sorry about this lapse of service.
We encourage our policyholders to call our hotline 63INCOME (6346 2663) which provides 24 hour service.
It will avoid the occasional lack of follow up by the agent (which may be due to reasons beyond our control).
Tan Kin Lian
CEO, NTUC Income
Buy term and invest the difference
Hi Mr Tan,
I write to seek your advice on the likely returns on my endowment policy and to switch out of P to NTUC.
I am 34 years old. I am also now 6 years into a 25 year life/critical illness endowment policy with P (100K as life sum insured).
I read in the papers about low term rates and why it is unwise to mix endowment policy with term.
I enquired from my adviser the rates of a P policy on the same scope as my current endowment policy but without the "endowment" elements.
The rates are $255 versus $50. This difference is significant as this P endowment policy has a guaranteed amount plus a non-guaranteed amount. Despite the projected yield of about 4%, I have no confidence the non-G portion pay-out will be met.
I may be better off switching out of the endowment policy now, but a term for $50 till I am say 55, and investing the difference of $200 into some kind of scheme that earns better returns than the projected yield. Is my thinking correct?
Warm Regards,
UTY
-----------------------
Dear UTY
I will ask my business center manager to get a consultant to look into your case. We will offer an alternative plan for you.
However, I suspect that as you have aleady incurred the high charges under your P policy, it may not be possible for us to offer a better alternative for you under our similar Living policy
One possibility is for you to swtich to our Ideal plan (ie an investment linked plan) and buy the critial illness separately under a rider. My consultant will give you the figures to see if it is to your advantage.
Tan Kin Lian
CEO, NTUC Income
I write to seek your advice on the likely returns on my endowment policy and to switch out of P to NTUC.
I am 34 years old. I am also now 6 years into a 25 year life/critical illness endowment policy with P (100K as life sum insured).
I read in the papers about low term rates and why it is unwise to mix endowment policy with term.
I enquired from my adviser the rates of a P policy on the same scope as my current endowment policy but without the "endowment" elements.
The rates are $255 versus $50. This difference is significant as this P endowment policy has a guaranteed amount plus a non-guaranteed amount. Despite the projected yield of about 4%, I have no confidence the non-G portion pay-out will be met.
I may be better off switching out of the endowment policy now, but a term for $50 till I am say 55, and investing the difference of $200 into some kind of scheme that earns better returns than the projected yield. Is my thinking correct?
Warm Regards,
UTY
-----------------------
Dear UTY
I will ask my business center manager to get a consultant to look into your case. We will offer an alternative plan for you.
However, I suspect that as you have aleady incurred the high charges under your P policy, it may not be possible for us to offer a better alternative for you under our similar Living policy
One possibility is for you to swtich to our Ideal plan (ie an investment linked plan) and buy the critial illness separately under a rider. My consultant will give you the figures to see if it is to your advantage.
Tan Kin Lian
CEO, NTUC Income
Do not allow the workshop to make inflated claims
Dear Mr Tan
I have an accident at woodland Innova JC entry. My car was hit by another car which trying to reverse out of the JC entry
A 3rd party claim was make on my car insurance and the car driver accident report provide in correct statement, that my car collided into his car.
I strongly beleive that the claim was submitted by the workshop. Can you help implement a warning cause in all accident report that the vehicle owner / driver is reposnsible for the statment, so that the owner and diver will not be signing blank form for the workshop to make claim without the owner's knowledge.
NL
------------------------
Dear NL,
I will alert my manager in charge of motor insurance, and his general manager. In the past, we do give warning to third party on incorrect statement. Some people are angry at our warning.
Tan Kin Lian
I have an accident at woodland Innova JC entry. My car was hit by another car which trying to reverse out of the JC entry
A 3rd party claim was make on my car insurance and the car driver accident report provide in correct statement, that my car collided into his car.
I strongly beleive that the claim was submitted by the workshop. Can you help implement a warning cause in all accident report that the vehicle owner / driver is reposnsible for the statment, so that the owner and diver will not be signing blank form for the workshop to make claim without the owner's knowledge.
NL
------------------------
Dear NL,
I will alert my manager in charge of motor insurance, and his general manager. In the past, we do give warning to third party on incorrect statement. Some people are angry at our warning.
Tan Kin Lian
Buy low cost term insurance for your protection
Insurance advisers (agents) are trained to convince you on the value of life insurance in providing financial security to your family, in the event of premature or unexpected death, disability or critical illness.
They are right. It is important to take care of your family.
The advisers prefer to sell you a whole life or endowemnt plan, because you pay a high monthly premium. They commission is based on the amount of the premium.
It is better for you to buy term insurance to cover these risks. Although you do not get a return on the premium, the cost is less than 15% of the normal premium. You can invest the remainder of your savings in a large, well diversifed, low charge fund (also available from NTUC Income) and get an attractive return.
Visit our business center or call 62 462663 (62 INCOME.)
-------------------------------
Here are some comparison:
They are right. It is important to take care of your family.
The advisers prefer to sell you a whole life or endowemnt plan, because you pay a high monthly premium. They commission is based on the amount of the premium.
It is better for you to buy term insurance to cover these risks. Although you do not get a return on the premium, the cost is less than 15% of the normal premium. You can invest the remainder of your savings in a large, well diversifed, low charge fund (also available from NTUC Income) and get an attractive return.
Visit our business center or call 62 462663 (62 INCOME.)
-------------------------------
Here are some comparison:
Monthly premium for $100,000 sum assured
Male
Age 20 25 30 35
Whole life $121.50 $140.50 $165.50 $196.50
20 yrs term $ 9.70 $ 10.70 $ 13.40 $ 18.90
20 yrs decreasing term $ 6.70 $ 6.90 $ 8.10 $ 11.40
Living (critial illness) $149.50 $176.50 $210.50 $255.50
20 yrs living benefit $ 15.20 $ 20.10 $ 29.90 $ 46.90
Female
Age 20 25 30 35
Whole life $111.50 $128.50 $150.50 $176.50
20 yrs term $ 7.00 $ 8.20 $ 10.40 $ 14.00
20 yrs decreasing term $ 5.20 $ 5.40 $ 6.20 $ 8.40
Living (critical illness) $136.50 $159.50 $189.50 $227.50
20 yrs living benefit $ 14.30 $ 18.40 $ 27.60 $ 45.20
Thursday, October 19, 2006
Advice to a retiree on investing your savings
1. What is the best way to invest my savings, after my retirement?
You should use a capital sum to buy a life annuity of about 30% to 40% of your income prior to retirement. You should find this sum to be adequate, if you own a home which is fully paid. If you are still paying for the education of your children, it should be funded separately.
You have to pay between 200 to 250 times of your monthly annuity, depending on your age and the type of annuity that you buy. For example, if you want an annuity of $1,000 a month, you should be paying between $200,000 to $250,000.
If you buy a capital protected annuity (which refunds the balance of your capital sum, without interest, on early death), you have to pay about 20% more than a non-protected annuity. Most people prefer the capital protected annuity, but this trend may change in the future.
Let me explain why 30% to 40% is adequate for a retiree. When we are working, we have to spend about 50% of our earnings to pay for a home, raise a family, tax and expenses of working. We have to set aside 10% to 20% for our savings. These items are usually not necessary after retirement, i.e. the home is fully paid and the children have grown up.
The annuity guarantees a payment for life. If you buy a participating annuity, you will enjoy an annual bonus (added to the annuity) that depends on the investment yield in each year. This will help to offset the increase in cost of living.
2. How should I invest the remainder of my savings
I recommend that it be invested in a large, well-diversified, low charge fund. You should select a fund with 50% to 100% invested in equity. This investment is likely to give you an attractive return, 5% or more, over a period of 10 to 30 years (but this is not guaranteed).
Although equity has risk, you can minimise it by investing for the long term (ie average out the good and bad years) and choosing a large fund (to reduce the risk of loss of a few individual investments).
You must choose a fund that have an annual charge of 1% or less. You should avoid a fund that has an expense ratio of 2% or more, as it takes away too much of your yield.
3. Is it better for a young person to save at an early age?
A young person should save 10% to 20% of the earnings for their retirement. You should invest in a large, well diversified, low charge fund that can give an average return of 5% or more over 10 to 30 years.
You should avoid taking an investment plan that have a high upfront charge that is used to pay the distributor (ie the insurance or financial adviser). The current upfront charges in the market (about 18 months of savings) are too high. NTUC Income charges about 6 months only.
By investing in a fund, you will get a higher yield compared to a traditional endowment or whole life policy. The difference in yield can be between 1% to 2% per year. Over a saving period of 30 years, the difference can be 50% or more. If you get $100,000 from a traditional product, you can get an additional $50,000 from a good investment.
It is important to choose the right type of investment for the future.
Note: The figures quoted above are estimates and do not represent any guarantee of the actual return for the future. Investment has risk. But, if you manage the risk well, you can get a better yield.
You should use a capital sum to buy a life annuity of about 30% to 40% of your income prior to retirement. You should find this sum to be adequate, if you own a home which is fully paid. If you are still paying for the education of your children, it should be funded separately.
You have to pay between 200 to 250 times of your monthly annuity, depending on your age and the type of annuity that you buy. For example, if you want an annuity of $1,000 a month, you should be paying between $200,000 to $250,000.
If you buy a capital protected annuity (which refunds the balance of your capital sum, without interest, on early death), you have to pay about 20% more than a non-protected annuity. Most people prefer the capital protected annuity, but this trend may change in the future.
Let me explain why 30% to 40% is adequate for a retiree. When we are working, we have to spend about 50% of our earnings to pay for a home, raise a family, tax and expenses of working. We have to set aside 10% to 20% for our savings. These items are usually not necessary after retirement, i.e. the home is fully paid and the children have grown up.
The annuity guarantees a payment for life. If you buy a participating annuity, you will enjoy an annual bonus (added to the annuity) that depends on the investment yield in each year. This will help to offset the increase in cost of living.
2. How should I invest the remainder of my savings
I recommend that it be invested in a large, well-diversified, low charge fund. You should select a fund with 50% to 100% invested in equity. This investment is likely to give you an attractive return, 5% or more, over a period of 10 to 30 years (but this is not guaranteed).
Although equity has risk, you can minimise it by investing for the long term (ie average out the good and bad years) and choosing a large fund (to reduce the risk of loss of a few individual investments).
You must choose a fund that have an annual charge of 1% or less. You should avoid a fund that has an expense ratio of 2% or more, as it takes away too much of your yield.
3. Is it better for a young person to save at an early age?
A young person should save 10% to 20% of the earnings for their retirement. You should invest in a large, well diversified, low charge fund that can give an average return of 5% or more over 10 to 30 years.
You should avoid taking an investment plan that have a high upfront charge that is used to pay the distributor (ie the insurance or financial adviser). The current upfront charges in the market (about 18 months of savings) are too high. NTUC Income charges about 6 months only.
By investing in a fund, you will get a higher yield compared to a traditional endowment or whole life policy. The difference in yield can be between 1% to 2% per year. Over a saving period of 30 years, the difference can be 50% or more. If you get $100,000 from a traditional product, you can get an additional $50,000 from a good investment.
It is important to choose the right type of investment for the future.
Note: The figures quoted above are estimates and do not represent any guarantee of the actual return for the future. Investment has risk. But, if you manage the risk well, you can get a better yield.
Talk to our consultant at the business center
Dear Mr Tan,
Having heard so much about your Blog, I decided to visit it today. It is interesting to note how you responded to the people who wrote regarding their problems and enquiries.
Your warm and caring attitude, coupled with your sound and practical advice, promote good rapport and great PR for INCOME on the whole.
You represent a rare breed of CEOs who are approachable, humble, having time for people, willing to listen and render assistance. However, I have encountered some CEOs who are too aloft even to take a call or talk to the man in the street.
I note you are travelling in China and will wait for your return next week to discuss my Income Policy.
Best Regards,
AL
-------------------
Dear AL
I try to give some brief general advice by e-mail.
If you wish to have a more specific advice, I suggest that you visit our business center and talk to our consultant. They should be able to advice you. They are paid a salary and do not earn any commission. The center is located at 75 Bras Basah Road. Hope it is okay.
Tan Kin Lian
Having heard so much about your Blog, I decided to visit it today. It is interesting to note how you responded to the people who wrote regarding their problems and enquiries.
Your warm and caring attitude, coupled with your sound and practical advice, promote good rapport and great PR for INCOME on the whole.
You represent a rare breed of CEOs who are approachable, humble, having time for people, willing to listen and render assistance. However, I have encountered some CEOs who are too aloft even to take a call or talk to the man in the street.
I note you are travelling in China and will wait for your return next week to discuss my Income Policy.
Best Regards,
AL
-------------------
Dear AL
I try to give some brief general advice by e-mail.
If you wish to have a more specific advice, I suggest that you visit our business center and talk to our consultant. They should be able to advice you. They are paid a salary and do not earn any commission. The center is located at 75 Bras Basah Road. Hope it is okay.
Tan Kin Lian
Wednesday, October 18, 2006
Low cost insurance to protect the family
Dear Mr. Tan,
For the past 16 years, I was running a business, but it failed. In recent years, I have been struggling to pay the debts to the banks and other institutions.
I put my feet firmly on the ground, cleared the hurdles and wish to start all over again.
My greatest worry was my family's well being, as I don't have any insurance coverage for them.
I want my family members to be protected and insured. I am able to put aside S$50 per month just to set my family insured and protected. What is your advice?
I am aged X and have two children. My monthly average earning is about $Y.
Many agents are keen to work on "high" premium potentials and not wasting time on me.
MS
--------------
Dear MS
I congratulate you on your perseverence and success in recovering from a setback in your financial circumstances. As your current income is still quite modest, I suggest that you should buy a low cost term insurance to protect your
family. You can find more details at this webpage:
http://www.income.coop/insurance/term/faq.asp
This is a pure insurance cover, and does not have any savings element. I think that it is most suitable for you.
If you wish to save for the future, I suggest the Ideal plan. More details are
available at:
http://www.income.coop/insurance/ideal/faq-4child.asp
If you like my suggestion, you can come to the business center at 75 Bras Basah Road and talk to our insurance consultant. They can give you the best advice. They do not earn any commission on the sale.
Tan Kin Lian
For the past 16 years, I was running a business, but it failed. In recent years, I have been struggling to pay the debts to the banks and other institutions.
I put my feet firmly on the ground, cleared the hurdles and wish to start all over again.
My greatest worry was my family's well being, as I don't have any insurance coverage for them.
I want my family members to be protected and insured. I am able to put aside S$50 per month just to set my family insured and protected. What is your advice?
I am aged X and have two children. My monthly average earning is about $Y.
Many agents are keen to work on "high" premium potentials and not wasting time on me.
MS
--------------
Dear MS
I congratulate you on your perseverence and success in recovering from a setback in your financial circumstances. As your current income is still quite modest, I suggest that you should buy a low cost term insurance to protect your
family. You can find more details at this webpage:
http://www.income.coop/insurance/term/faq.asp
This is a pure insurance cover, and does not have any savings element. I think that it is most suitable for you.
If you wish to save for the future, I suggest the Ideal plan. More details are
available at:
http://www.income.coop/insurance/ideal/faq-4child.asp
If you like my suggestion, you can come to the business center at 75 Bras Basah Road and talk to our insurance consultant. They can give you the best advice. They do not earn any commission on the sale.
Tan Kin Lian
Policyholder wants to switch to NTUC Income now
Dear Sir,
What is your suggestion for someone already bought the cover from other insurance company? Should the policy be terminated and switched to NTUC Income? I am not able to get another policy now. Like to hear your adivice.
KS
---------------
Dear KS,
I will get my product specialist to find out more about your circumstances and give you the proper advice.
Usually, as you have already incurred the high charges for the critical illness policy taken from the other insurance company, it is not beneficial for you to make a change now. Let us take a look at the actual numbers and make a decision after that.
Tan Kin Lian
What is your suggestion for someone already bought the cover from other insurance company? Should the policy be terminated and switched to NTUC Income? I am not able to get another policy now. Like to hear your adivice.
KS
---------------
Dear KS,
I will get my product specialist to find out more about your circumstances and give you the proper advice.
Usually, as you have already incurred the high charges for the critical illness policy taken from the other insurance company, it is not beneficial for you to make a change now. Let us take a look at the actual numbers and make a decision after that.
Tan Kin Lian
Reply to Zaobao: Discounting of bonus
18 October 2006
Editor
Lianhe Zaobao
I refer to the letter, "Can NTUC Income's policy be more transparent?", by Madam Wei Qi Ying (Zaobao, Oct 13).
Mdm Wei purchased a Foundation Policy in 1988. This is a long-term endowment plan, with maturity in year 2042.
This policy pays the sum assured plus accumulated bonus on the maturity date, or on earlier death or permanent total disability of the life assured. This is a standard endowment policy which is bought by large numbers of people over the years.
The Foundation policy allows the policyholder to encash the bonus at its discounted value. The discounting factor takes into account the number of years to the maturity date. The effect of the discounting is shown clearly in the illustration given to the policyholder at the time of purchase.
The Foundation policy actually gives a special benefit to the policyholder. If the bonus is encashed for the purpose of the tertiary education of the life assured (child), we pay an additional 25% on top of the discounted value of the bonus.
If Mdm Wei compares the premiums that she has paid for the Foundation policy and the cash value today, she will realise that she is getting a reasonable return, compared to similar policies issued by other insurance companies.
I wish to encourage all policyholders to make the effort to understand the key terms of the contract at the time of purchase of the policy. The insurance company is required to provide this information in a standard illustration of benefits. It is the duty of the insurance adviser to explain the terms to you.
More information on NTUC Income's Foundation Policy can be obtained from our website, www.income.coop/insurance/foundation
Peh Chee Keong
Head, Life Insurance Dept
NTUC Income
Editor
Lianhe Zaobao
I refer to the letter, "Can NTUC Income's policy be more transparent?", by Madam Wei Qi Ying (Zaobao, Oct 13).
Mdm Wei purchased a Foundation Policy in 1988. This is a long-term endowment plan, with maturity in year 2042.
This policy pays the sum assured plus accumulated bonus on the maturity date, or on earlier death or permanent total disability of the life assured. This is a standard endowment policy which is bought by large numbers of people over the years.
The Foundation policy allows the policyholder to encash the bonus at its discounted value. The discounting factor takes into account the number of years to the maturity date. The effect of the discounting is shown clearly in the illustration given to the policyholder at the time of purchase.
The Foundation policy actually gives a special benefit to the policyholder. If the bonus is encashed for the purpose of the tertiary education of the life assured (child), we pay an additional 25% on top of the discounted value of the bonus.
If Mdm Wei compares the premiums that she has paid for the Foundation policy and the cash value today, she will realise that she is getting a reasonable return, compared to similar policies issued by other insurance companies.
I wish to encourage all policyholders to make the effort to understand the key terms of the contract at the time of purchase of the policy. The insurance company is required to provide this information in a standard illustration of benefits. It is the duty of the insurance adviser to explain the terms to you.
More information on NTUC Income's Foundation Policy can be obtained from our website, www.income.coop/insurance/foundation
Peh Chee Keong
Head, Life Insurance Dept
NTUC Income
Tuesday, October 17, 2006
Tianjin is congested
I travelled by road from Beijing Airport to Tianjin City. Normally, the journey takes 2 hours. On this occasion, it took more than 3 hours, due to congestion on the trunk road and on entering into the city.
My local friend said the air pollution is bad.
Tianjin City was much better 10 years ago, when it was less developed. Development does have its negative aspect on the quality of life.
My local friend said the air pollution is bad.
Tianjin City was much better 10 years ago, when it was less developed. Development does have its negative aspect on the quality of life.
Luggage arrived promptly at Beijing Airport
I arrived at Beijing Airport on a full flight from Singapore. The clearance through health, immigration and customs was smooth and fast. When I came down the escalator to the luggage collection center, a big sign (which was clearly seen) announced the conveyor belf for my flight.
My luggage already arrived. They were taken off the conveyor belt earlier and stacked neatby by the side.
This is the most impressive experience in my whole life of air travel. It beats the great experience in Singapore.
Beijing Airport is ready for Olympics 2008.
My luggage already arrived. They were taken off the conveyor belt earlier and stacked neatby by the side.
This is the most impressive experience in my whole life of air travel. It beats the great experience in Singapore.
Beijing Airport is ready for Olympics 2008.
Sunday, October 15, 2006
Get the Right Financial Healthcheck
Your most important action, after getting a healthcheck, is to get the right treatment.
If you carry out a financial healthcheck, you must select the right product to make your investment.
Many advisers offer you the wrong product that give you a poor return. This is due to the high commission that is paid to the adviser. The typical cost of the advice is 18 months of your savings. That is a lot of money to give away.
If you select a comparable product from a low cost provider, such as NTUC Income, you can about 15% more on the maturity of your savings over 20 years. If the maturity amount is $100,000, you can get $15,000 extra.
If you save for 30 years, the difference is larger. You can get 25% from a low cost provider.
This is based on a difference in yield of 1.2% per annum.
When you save for your future, make sure that you get the right product. Choose a product that offers you a better yield (from a low cost provider). Take care of your own financial future.
If you carry out a financial healthcheck, you must select the right product to make your investment.
Many advisers offer you the wrong product that give you a poor return. This is due to the high commission that is paid to the adviser. The typical cost of the advice is 18 months of your savings. That is a lot of money to give away.
If you select a comparable product from a low cost provider, such as NTUC Income, you can about 15% more on the maturity of your savings over 20 years. If the maturity amount is $100,000, you can get $15,000 extra.
If you save for 30 years, the difference is larger. You can get 25% from a low cost provider.
This is based on a difference in yield of 1.2% per annum.
When you save for your future, make sure that you get the right product. Choose a product that offers you a better yield (from a low cost provider). Take care of your own financial future.
Saturday, October 14, 2006
Exchange traded fund
What is the difference between an Exchange Traded Fund (ETF) and an indexed fund?
A ETF is a fund that is managed to follow an index. The fund can be traded through the exchange. You can buy and sell the fund at any time during the trading day. The price is based on willing buyer, willing seller. It should follow quite closely to the value of the underlying assets.
An indexed fund is NOT traded through the exchange. If you wish to buy or sell units of the fund, you have to accept the price that is fixed by the manager at the end of the trading day. It will be based on the value of the underlying assets (based on the closing price).
Most of the investment-lined funds (ILPs) and unit trusts are NOT traded on the exchange.
For long term investors, it is better to invest in a non-traded fund. If you want to do short term or intra-day trading, a ETF is more suitable.
A ETF is a fund that is managed to follow an index. The fund can be traded through the exchange. You can buy and sell the fund at any time during the trading day. The price is based on willing buyer, willing seller. It should follow quite closely to the value of the underlying assets.
An indexed fund is NOT traded through the exchange. If you wish to buy or sell units of the fund, you have to accept the price that is fixed by the manager at the end of the trading day. It will be based on the value of the underlying assets (based on the closing price).
Most of the investment-lined funds (ILPs) and unit trusts are NOT traded on the exchange.
For long term investors, it is better to invest in a non-traded fund. If you want to do short term or intra-day trading, a ETF is more suitable.
My personal website
If you wish to know about my personal plans after leaving NTUC Income, visit my personal website, www.tankinlian.com
Friday, October 13, 2006
A new way to get insurance service
Some customers are well served by their insurance advisers who take care of their needs over many years. They enjoy the personal service, advice and attention of the adviser.
Some customers are not so fortunate. Their adviser drops out of the business, and decide to do other types of work. This applies not only to NTUC Income, but to other insurance companies as well.
In fact, the turnover rate of insurance advisers has been quite high over the years, especially among the younger advisers.
NTUC Income offers a new option to our customers.
- You can come to our business center and be served by our salaried consultant
- You can get service from our 24 hour contact center.
You are not tied to a specific adviser. You will be served by our organisation according to our service standard.
More people find this option to tbe quite attractive.
Some customers are not so fortunate. Their adviser drops out of the business, and decide to do other types of work. This applies not only to NTUC Income, but to other insurance companies as well.
In fact, the turnover rate of insurance advisers has been quite high over the years, especially among the younger advisers.
NTUC Income offers a new option to our customers.
- You can come to our business center and be served by our salaried consultant
- You can get service from our 24 hour contact center.
You are not tied to a specific adviser. You will be served by our organisation according to our service standard.
More people find this option to tbe quite attractive.
Poor follow up by insurance agent
Mr Tan
Many thanks for your birthday greetings.
I have visited your blog after reading the press reports. It is an informative and interesting blog.
Would like to share with you on my experience with your agent that is serving me. He was assigned to me after the initial agent that served me left your organisation. I took several policies with NTUC since 1991 but have not received any form of contact from this agent.
Quite some time ago, I contacted him when I have some queries on the claim forms. He did not help much other than suggested I called the company. I am very disappointed at him.
Not long ago, I bought two policies from a Prudential agent at Standard Chartered Bank, which is a total stranger to me.
I have also seen your Talk at TV program. I appreciate your HARD WORK, GREAT EFFORT in making Insurance more COMPREHENSIVE via TV program .
I hope all your agents appreciate your GREAT WORK and they must work harder not to let your effort goes down to other agency. Hope you keep me posted when you no longer at NTUC.
RW
----------------------
Dear RW,
Thank you for your feedback. I am sorry that the service from the agent has been disappointing.
I will ask X to contact you and see if he can be of any help in your insurance matters. Alternatively, you can visit our business center at 75 Bras Basah Road and talk to our salaried insuranced consulant.
Tan Kin Lian
Many thanks for your birthday greetings.
I have visited your blog after reading the press reports. It is an informative and interesting blog.
Would like to share with you on my experience with your agent that is serving me. He was assigned to me after the initial agent that served me left your organisation. I took several policies with NTUC since 1991 but have not received any form of contact from this agent.
Quite some time ago, I contacted him when I have some queries on the claim forms. He did not help much other than suggested I called the company. I am very disappointed at him.
Not long ago, I bought two policies from a Prudential agent at Standard Chartered Bank, which is a total stranger to me.
I have also seen your Talk at TV program. I appreciate your HARD WORK, GREAT EFFORT in making Insurance more COMPREHENSIVE via TV program .
I hope all your agents appreciate your GREAT WORK and they must work harder not to let your effort goes down to other agency. Hope you keep me posted when you no longer at NTUC.
RW
----------------------
Dear RW,
Thank you for your feedback. I am sorry that the service from the agent has been disappointing.
I will ask X to contact you and see if he can be of any help in your insurance matters. Alternatively, you can visit our business center at 75 Bras Basah Road and talk to our salaried insuranced consulant.
Tan Kin Lian
Thursday, October 12, 2006
Easy for workshop to make a third party claim
12 October 2006
Editor
Forum Page
Straits Times
I refer to the report entitled "Fake road collisions: Income to go after workshops (St Times 12 October 2006).
The Motor Workshop Association's representative, Mr. Joey Lim said that the outcome of the recent court case would allow insurers to put the squeeze on workshop operators. The small workshops would be reluctant to hire a lawyer and would be forced to settle for a smaller amount offered by the insurer.
I wish to refute this statement.
It is easy for a third party workshop to submit their claim directly with NTUC Income. They can send the vehicle to an Idac center for assessment of the damages. We will make a fair offer of the repair cost based on the benchmark price obtained from our Motor Repair Cost System. This has produced a repair cost that is similar to what is estimated by our quality workshop. It contains a satisfactory profit margin for the repairer. After the repair has been completed, we pay the bill within four days.
We will only take legal action against a workshop that refuses to make a direct settlement with us, inflate the repair bill and get a lawyer to submit the claim. It is our duty to avoid paying an inflated repair bill. We want to act vigilently against inflated claims, so as to reduce the premium rate payable by our customers.
Each year, we handle about 10,000 repair jobs for our customers. About 94% of the repairs are arranged by us and carried out at our quality workshops. Only 6% of our customers opt for their own workshop to carry out the repair at the same price as our quality workshop.
NTUC Income wish to help the smaller workshops to operate efficiently and survive in this competitive market. A total of 130 workshops now operate under five business fusion groups to tender for the repair jobs of our customers. They are able to meet our quality standards and to offer a competitive price. As their cost of operation is lower than the larger workshops, they can enjoy a satisfactory profit margin. They also enjoy free and convenient access to these repair jobs.
About 30% of our repairs jobs are now awarded to the smaller workshops under the business fusion groups. Our customers give a high satisfaction rating to their service quality and standard of repair.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Editor
Forum Page
Straits Times
I refer to the report entitled "Fake road collisions: Income to go after workshops (St Times 12 October 2006).
The Motor Workshop Association's representative, Mr. Joey Lim said that the outcome of the recent court case would allow insurers to put the squeeze on workshop operators. The small workshops would be reluctant to hire a lawyer and would be forced to settle for a smaller amount offered by the insurer.
I wish to refute this statement.
It is easy for a third party workshop to submit their claim directly with NTUC Income. They can send the vehicle to an Idac center for assessment of the damages. We will make a fair offer of the repair cost based on the benchmark price obtained from our Motor Repair Cost System. This has produced a repair cost that is similar to what is estimated by our quality workshop. It contains a satisfactory profit margin for the repairer. After the repair has been completed, we pay the bill within four days.
We will only take legal action against a workshop that refuses to make a direct settlement with us, inflate the repair bill and get a lawyer to submit the claim. It is our duty to avoid paying an inflated repair bill. We want to act vigilently against inflated claims, so as to reduce the premium rate payable by our customers.
Each year, we handle about 10,000 repair jobs for our customers. About 94% of the repairs are arranged by us and carried out at our quality workshops. Only 6% of our customers opt for their own workshop to carry out the repair at the same price as our quality workshop.
NTUC Income wish to help the smaller workshops to operate efficiently and survive in this competitive market. A total of 130 workshops now operate under five business fusion groups to tender for the repair jobs of our customers. They are able to meet our quality standards and to offer a competitive price. As their cost of operation is lower than the larger workshops, they can enjoy a satisfactory profit margin. They also enjoy free and convenient access to these repair jobs.
About 30% of our repairs jobs are now awarded to the smaller workshops under the business fusion groups. Our customers give a high satisfaction rating to their service quality and standard of repair.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Choose an insurer based on its actual return to policyholders
Editor
Forum Page
Straits Times
I refer to the letter from Ms Ong Hwee Leng entitled "Poor bonuses - time insurers revise premiums" (St Times, 11 Oct 2006).
Ms Ong said that the bonuses declared on her policies have been at least 30 percent below the projections at the time of her purchase. She probably bought her policies from another insurer, not NTUC Income.
If she had bought a 20 year endowment policy from NTUC Income in 1996, the actual reduction in bonuses is about 10%. This is largely contributed by a decline in the yield on fixed income investments, which account for a large proportion of the investments of the life insurance fund.
Our policyholders see a smaller reduction in bonuses for the following reasons:
- our initial projection was more realistic
- they were based on a rate of bonus that could be supported by the prevailing investment yield
We were able to offer a fairly attractive return to our policyholders due to our low expense ratio. We pay commission to agents that are much lower than the market and distribute a modest rate of dividend to shareholders. We are able to give more of the investment gains to our policyholders.
For maturing policies, we have consistently given a much better payout to our policyholders, averaging about 15% for a 20 year endowment policy. This is largely contributed by our low expense ratio.
My advice to consumers is to choose your insurer based on its track record of giving a actual better return to its policyholders, rather than on projected values or the sales presentation by its agents.
The actual returns from NTUC Income are posted in our website, www.income.coop.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Forum Page
Straits Times
I refer to the letter from Ms Ong Hwee Leng entitled "Poor bonuses - time insurers revise premiums" (St Times, 11 Oct 2006).
Ms Ong said that the bonuses declared on her policies have been at least 30 percent below the projections at the time of her purchase. She probably bought her policies from another insurer, not NTUC Income.
If she had bought a 20 year endowment policy from NTUC Income in 1996, the actual reduction in bonuses is about 10%. This is largely contributed by a decline in the yield on fixed income investments, which account for a large proportion of the investments of the life insurance fund.
Our policyholders see a smaller reduction in bonuses for the following reasons:
- our initial projection was more realistic
- they were based on a rate of bonus that could be supported by the prevailing investment yield
We were able to offer a fairly attractive return to our policyholders due to our low expense ratio. We pay commission to agents that are much lower than the market and distribute a modest rate of dividend to shareholders. We are able to give more of the investment gains to our policyholders.
For maturing policies, we have consistently given a much better payout to our policyholders, averaging about 15% for a 20 year endowment policy. This is largely contributed by our low expense ratio.
My advice to consumers is to choose your insurer based on its track record of giving a actual better return to its policyholders, rather than on projected values or the sales presentation by its agents.
The actual returns from NTUC Income are posted in our website, www.income.coop.
Tan Kin Lian
Chief Executive Officer
NTUC Income
Wednesday, October 11, 2006
Consultant gives fair and objective advice
Dear Mr Tan
As suggested by you, I met your product specialist on my financial planning matters.
He is Mr AJ from the Business Centre. I had a good 2 hours chat with him.
What I like about the service is that
- He is fair and objective
- He is not pushy
- He was able to tell me the pros and cons of your competitors product
- He was able to recommend products that meet my needs
- He was able to explain details clearly
- I am left in no doubts about my own financial position
I think the culture you have set for INCOME is good - one where customers are not felt pressurized to purchase a product because of pushy salesman but because the customer feel that the product serve his needs
I also like the transparency that you have set for the industry.
I am still deciding which of the products to purchase, but I know at the end of the day, I have make a right choice because I have received good advice.
All the best to your future endeavours.
JC
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Dear JC
Thank you for your feedback.
Many of my advisers are also not pushy and they give good advice as well, for the benefit of the customer. They can serve you at your home or office.
Tan Kin Lian
As suggested by you, I met your product specialist on my financial planning matters.
He is Mr AJ from the Business Centre. I had a good 2 hours chat with him.
What I like about the service is that
- He is fair and objective
- He is not pushy
- He was able to tell me the pros and cons of your competitors product
- He was able to recommend products that meet my needs
- He was able to explain details clearly
- I am left in no doubts about my own financial position
I think the culture you have set for INCOME is good - one where customers are not felt pressurized to purchase a product because of pushy salesman but because the customer feel that the product serve his needs
I also like the transparency that you have set for the industry.
I am still deciding which of the products to purchase, but I know at the end of the day, I have make a right choice because I have received good advice.
All the best to your future endeavours.
JC
-------------------
Dear JC
Thank you for your feedback.
Many of my advisers are also not pushy and they give good advice as well, for the benefit of the customer. They can serve you at your home or office.
Tan Kin Lian
Tuesday, October 10, 2006
Faster processing of Incomeshield claims
For September 2006, we settled 51% of Incomeshield claims within 7 days, a vast improvement compared with 1% in July.
The recent implementation of several measures contributed to speeding up the processing of claims:
a) auto mapping of medical condition
b) auto mapping of surgical table/benefit
c) direct access to claims by approving officers (avoid data entry)
We will soon automate the processing of within-deductible claims. This will help to speed up the processing of the remaining claims.
William Fong
Head, Group & Health Dept
The recent implementation of several measures contributed to speeding up the processing of claims:
a) auto mapping of medical condition
b) auto mapping of surgical table/benefit
c) direct access to claims by approving officers (avoid data entry)
We will soon automate the processing of within-deductible claims. This will help to speed up the processing of the remaining claims.
William Fong
Head, Group & Health Dept
Fierce competition for motor insurance
A policyholder received a quotation of $900 for the renewal of his motor insurance from company A. He visited our business centre. Our current rate for his risk profile is $766.
He went back to company A, which promptly reduced the premium to $700. Later, company H reduced the premium to $654.
NTUC Income will continue to charge our premium rate based on our cost of claims and expenses. This is an adequate rate.
Some competitors are willing to undercut our premium rate to win over the business. However, as their claim cost and expenses are higher, they will have to increase the premium rate on the following year.
This irresponsible price cutting is not sustainable.
He went back to company A, which promptly reduced the premium to $700. Later, company H reduced the premium to $654.
NTUC Income will continue to charge our premium rate based on our cost of claims and expenses. This is an adequate rate.
Some competitors are willing to undercut our premium rate to win over the business. However, as their claim cost and expenses are higher, they will have to increase the premium rate on the following year.
This irresponsible price cutting is not sustainable.
Supplementary Retirement Scheme (SRS)
The Central Provident Fund is designed for Singapore workers to make savings for their retirement and other purposes. Singapore workers contribute up to the salary ceiling (about S$4,000 per month). Contributions are tax exempt and the benefits are received free of tax.
The Supplementary Retirement Scheme was created to allow the foreigners and high income earners to make supplementary savings for their retirement. Contributions are tax-exempt but 50% of the benefits are subject to tax. It benefits the tax-paying contributors due to deferral of tax.
The tax benefit is modest, but it is better than nothing. The cost to the government is also quite modest.
Currently, the maximum sum that a Singaporean can contribute to the SRS is about $11,000. This is too small to be worth while.
I suggest that the SRS be reviewed, so that it can be more adequate as a vehicle to save for retirement. I propose that the contribution to SRS be set at 20% of the taxable income, less any contribution to the CPF.
Most people need to save about 20% of their income to meet their retirement needs. The CPF gives the best tax advantage, but the government wish to reduce the tax leakage. Under the SRS scheme, the tax leakage is reduced, as 50% of the benefit receievd (which includes capital gains) is subject to tax.
I hope that the Government will consider this proposal, to enable more people to make adequate savings for their retirement.
The Supplementary Retirement Scheme was created to allow the foreigners and high income earners to make supplementary savings for their retirement. Contributions are tax-exempt but 50% of the benefits are subject to tax. It benefits the tax-paying contributors due to deferral of tax.
The tax benefit is modest, but it is better than nothing. The cost to the government is also quite modest.
Currently, the maximum sum that a Singaporean can contribute to the SRS is about $11,000. This is too small to be worth while.
I suggest that the SRS be reviewed, so that it can be more adequate as a vehicle to save for retirement. I propose that the contribution to SRS be set at 20% of the taxable income, less any contribution to the CPF.
Most people need to save about 20% of their income to meet their retirement needs. The CPF gives the best tax advantage, but the government wish to reduce the tax leakage. Under the SRS scheme, the tax leakage is reduced, as 50% of the benefit receievd (which includes capital gains) is subject to tax.
I hope that the Government will consider this proposal, to enable more people to make adequate savings for their retirement.
Comparsion of cost and returns for Critical Illness plans
Are you paying the right cost for your critical illness plan? Do they give you a fair return for your premium?
The following table shows the amount that you are insured for $150 a month, and the cash value at the end of 20 years.
NTUC Income's cash value is 50% higher than company A and company H, and 15% higher than company P.
We are able to pay much more, because we pay a lower commission to our adviser and lower dividend to our shareholders.
Make the right choice! Take care of your interest! Do not pay more than necessary!
The following table shows the amount that you are insured for $150 a month, and the cash value at the end of 20 years.
NTUC Income's cash value is 50% higher than company A and company H, and 15% higher than company P.
We are able to pay much more, because we pay a lower commission to our adviser and lower dividend to our shareholders.
Make the right choice! Take care of your interest! Do not pay more than necessary!
Male, 25 $150 monthly prem
Company Sum Assd Cash Value Yield
NTUC Income $84,990 $47,260 2.9%
Company P $88,770 $41,340 1.7%
Company M $93,360 $34,940 0.9%
Company A $78,950 $30,720 -1.1%
Company H $81,090 $27,510 -2.2%
Male, 40 $150 monthly prem
Company Sum Assd Cash Value Yield
NTUC Income $47,850 $40,490 1.5%
Company P $48,060 $36,270 0.4%
Company M $56,270 $34,030 -0.2%
Company H $46,150 $28,240 -2.0%
Company A $45,050 $27,420 -2.3%
Sunday, October 08, 2006
Does Incomeshield cover Hypertension and Diabetes?
Hi Mr Tan,
I have visited your blog once in a while and must say that it is informative from a NTUC point of view. I’m not sure how it will be after you have left NTUC. I hope comments will be as impartial and provocative as possible.
I have a personal question though. Read somewhere in which you reply about a person with controlled diabetes and hypertension being covered under incomeshield. Could you tell us if the person will still be covered for diabetic and hypertension treatment?
D
----------------
Dear D
The Incomeshield plan covers the cost of hospital stay and certain outpatient treatment (for specified illness), subject to certain limits, and after deucting the Deductible and Co-payment. Details are found in this FAQ:
http://www.income.coop/insurance/incshield/faq.asp
If the insured person has a previous medical condition (eg hypertension and diabets) and is accepted for Incomeshield, he will be covered for the hospital stay arising from these conditions. He is not covered for the cost of regular medication to treat these conditions (as they are not covered under the plan).
Tan Kin Lian
I have visited your blog once in a while and must say that it is informative from a NTUC point of view. I’m not sure how it will be after you have left NTUC. I hope comments will be as impartial and provocative as possible.
I have a personal question though. Read somewhere in which you reply about a person with controlled diabetes and hypertension being covered under incomeshield. Could you tell us if the person will still be covered for diabetic and hypertension treatment?
D
----------------
Dear D
The Incomeshield plan covers the cost of hospital stay and certain outpatient treatment (for specified illness), subject to certain limits, and after deucting the Deductible and Co-payment. Details are found in this FAQ:
http://www.income.coop/insurance/incshield/faq.asp
If the insured person has a previous medical condition (eg hypertension and diabets) and is accepted for Incomeshield, he will be covered for the hospital stay arising from these conditions. He is not covered for the cost of regular medication to treat these conditions (as they are not covered under the plan).
Tan Kin Lian
How to get Critial Illness Cover at a lower cost
Some insurers advertises the value of critical illness cover. But, they do not tell you about the cost of their product.
The critical illness cover is marketd by an adviser who earns a large commission. You have to pay about 150% of your annual premium in distribution cost. If your annual premium is $3,000, you have to pay $4,500 for the advice.
The cost of the critical illness cover is additional to the above. And the profit taken by the insurance company is another significant portion.
In fact, the actual cost of the insurance is quite low (based on the percentage of people who make a claim). The expenses take away a large part of the premium.
If you buy a similar product from NTUC Income, the distribution cost is about half of the market average. We take away a very small portion as profit for shareholders.
For most of our products, we are able to pay a much higher return to our policyholder, for the same premium and amount of cover. The difference is about 15% for a 20 year policy, and can be higher, if the policy is kept for a longer period.
The critical illness cover is marketd by an adviser who earns a large commission. You have to pay about 150% of your annual premium in distribution cost. If your annual premium is $3,000, you have to pay $4,500 for the advice.
The cost of the critical illness cover is additional to the above. And the profit taken by the insurance company is another significant portion.
In fact, the actual cost of the insurance is quite low (based on the percentage of people who make a claim). The expenses take away a large part of the premium.
If you buy a similar product from NTUC Income, the distribution cost is about half of the market average. We take away a very small portion as profit for shareholders.
For most of our products, we are able to pay a much higher return to our policyholder, for the same premium and amount of cover. The difference is about 15% for a 20 year policy, and can be higher, if the policy is kept for a longer period.
27% market share in health insurance
For year 2005, our market share is estimated at 27.3%. We are 1st in ranking ahead of AIA(18.9%) and Great Eastern Life(18.8%).
Annual premium $million
Individual Group General Total
Income 199.6 23.2 - 222.8
Industry* 558.3 121.5 137.7 817.5*
Mkt share 35.8% 19.9% - 27.3%
Saturday, October 07, 2006
www.tankinlian.com
I have created a personal website at www.tankinlian.com. I shall be giving more details about my future plans over the next few months at this personal website.
My investments have made good returns over past 20 years
Dear Mr Tan
I am a NTUC Income policy holder. In view of my trust & confidence in NTUC, I have taken up a few life & investment link related policies more than 20 years ago. I am very pleased to note that these investments have made considerably good returns in preparation for my retirement life ahead.
I learn that you have chosen to retire in April next year after having served for 30 years in NTUC (Income). I would like to take this opportunity to thank you and place on record my appreciation for your outstanding leadership, excellent financial management skills and good investment judgement which bring about this great achievements where my family, relatives and NTUC (Income) policy holders at large can reap the benefits
Warmest regards
WSY
---------------
Dear WSY
Thank you for your kind words.
Tan Kin Lian
I am a NTUC Income policy holder. In view of my trust & confidence in NTUC, I have taken up a few life & investment link related policies more than 20 years ago. I am very pleased to note that these investments have made considerably good returns in preparation for my retirement life ahead.
I learn that you have chosen to retire in April next year after having served for 30 years in NTUC (Income). I would like to take this opportunity to thank you and place on record my appreciation for your outstanding leadership, excellent financial management skills and good investment judgement which bring about this great achievements where my family, relatives and NTUC (Income) policy holders at large can reap the benefits
Warmest regards
WSY
---------------
Dear WSY
Thank you for your kind words.
Tan Kin Lian
Friday, October 06, 2006
Simple and transparent terms for home loans
6 October 2006
Editor
Today Paper
I refer to the letters entitled "First discounts" from Ms Angeline Lee and "Spiralling rates" from Mr Deepak Gurnani.
The home loan schemes in the market are indeed quite complex. Many financiers in the market offers different board rates for their home loans. When the board rate changes, the customer may be confused, and is not sure if he still enjoys a competitive rate.
NTUC Income provides an alternative to owners of private properties. We adopt a simple and transparent approach for our loan scheme. We have only one board rate for home loans on variable rates. This applies to all loans taken from us. As the board rate changes, we notify our customer in advance. They know clearly what is the interest rate that they pay at any time.
We revise our board rate to keep in line with the market, but we try to minimise the frequency of changes. Our current board rate is 3.5% per annum, and has been effective since January 2004. We have not changed this board rate for the past 33 months. From 1 Nov 06, we will raise our board rate by a modest increase of only 0.25%. The revised board rate will be only 3.75% per annum, probably among the lowest in the market.
NTUC Income also offers a fixed rate scheme, which keeps the rate fixed at 4.15% per annum for the first 5 years. The interest will revert to the board rate after 5 years. We give an option to the customer to switch to the board rate at the end of the 3 years. This option provides an additional flexibility to the customer to enjoy lower interest rate, under certain circumstances.
We believe that many customers prefer a simple and transparent scheme for their home loans. We offer free processing, valuation and home insurance for the first year of loan. For a customer who switch their existing home loans from another financier to our fixed rate loans, we provide a legal subsidy of up to $2,000.
More details are available fromour website: www.income.coop/loans.
Melissa Yam
Head, Loan & Property
NTUC Income
Editor
Today Paper
I refer to the letters entitled "First discounts" from Ms Angeline Lee and "Spiralling rates" from Mr Deepak Gurnani.
The home loan schemes in the market are indeed quite complex. Many financiers in the market offers different board rates for their home loans. When the board rate changes, the customer may be confused, and is not sure if he still enjoys a competitive rate.
NTUC Income provides an alternative to owners of private properties. We adopt a simple and transparent approach for our loan scheme. We have only one board rate for home loans on variable rates. This applies to all loans taken from us. As the board rate changes, we notify our customer in advance. They know clearly what is the interest rate that they pay at any time.
We revise our board rate to keep in line with the market, but we try to minimise the frequency of changes. Our current board rate is 3.5% per annum, and has been effective since January 2004. We have not changed this board rate for the past 33 months. From 1 Nov 06, we will raise our board rate by a modest increase of only 0.25%. The revised board rate will be only 3.75% per annum, probably among the lowest in the market.
NTUC Income also offers a fixed rate scheme, which keeps the rate fixed at 4.15% per annum for the first 5 years. The interest will revert to the board rate after 5 years. We give an option to the customer to switch to the board rate at the end of the 3 years. This option provides an additional flexibility to the customer to enjoy lower interest rate, under certain circumstances.
We believe that many customers prefer a simple and transparent scheme for their home loans. We offer free processing, valuation and home insurance for the first year of loan. For a customer who switch their existing home loans from another financier to our fixed rate loans, we provide a legal subsidy of up to $2,000.
More details are available fromour website: www.income.coop/loans.
Melissa Yam
Head, Loan & Property
NTUC Income
Thank you for creating jobs for matured workers
During the economic slowdown a few years ago, many matured workers were retrenched. NTUC Income created the position of customer relations officers for over 300 mature workers to find a second career.
Last night, after the Income Day dinner, a lady approached me. She said, "Mr Tan, I am a customer relations officer. I want to thank you for creating this job which allowed me to continue to be employed".
She was almost in tears, as she spoke. I was moved.
It was nice of her to express her appreciation. Most people will take these things for granted.
Last night, after the Income Day dinner, a lady approached me. She said, "Mr Tan, I am a customer relations officer. I want to thank you for creating this job which allowed me to continue to be employed".
She was almost in tears, as she spoke. I was moved.
It was nice of her to express her appreciation. Most people will take these things for granted.
Tan Kin Lian's speech at NTUC Income Day
I joined NTUC Income on 1 April 1977. By next April, I would have completed 30 years of service.
30 years is a long, long time. It is time to make a change.
I will be leaving NTUC Income. This will allow the board of directors to find a new chief executive to lead NTUC Income in its next phase of development.
NTUC Income has several strengths:
- it is financially strong, and has been awarded the highest rating by Standard & Poors among all insurance companies in Asia
- it has passionate, dedicated and competent employees
- it has core competencies, in our call center, low cost of operation, claims management, and a strong pro-customer brand.
It also has challenges to respond to a competitive and changing market.
The future is bright. I am confident that the new chief executive, whoever he or she may be, will be able to use the strengths to bring NTUC Income to greater heights.
The future for me, personally, will be equally exciting, challenging and busy.
I will be working with a few partners to build the technology platform and the business strategy for what I call, "the insurance company of the future". It will operate efficiently to bring down the cost of insurance and financial services to consumers, using the connectivity and power of the internet.
I intend to provide this solution to existing or new insurance companies operating outside of Singapore.
I will also disseminate my knowledge and years of experience through consultancy and training engagements. I like to continue being involved in transforming organisations with innovative and differentiating competencies.
I want to thank so many colleagues and friends who have worked with me during part or all of the past thirty years. You are wonderful people. I enjoy working with you. I shall miss you. But, we will continue to keep in touch.
If you want to know about my future plans, and how things turn out, you can continue to read my personal blog. I will continue to update it regularly.
Thank you.
Tan Kin Lian
30 years is a long, long time. It is time to make a change.
I will be leaving NTUC Income. This will allow the board of directors to find a new chief executive to lead NTUC Income in its next phase of development.
NTUC Income has several strengths:
- it is financially strong, and has been awarded the highest rating by Standard & Poors among all insurance companies in Asia
- it has passionate, dedicated and competent employees
- it has core competencies, in our call center, low cost of operation, claims management, and a strong pro-customer brand.
It also has challenges to respond to a competitive and changing market.
The future is bright. I am confident that the new chief executive, whoever he or she may be, will be able to use the strengths to bring NTUC Income to greater heights.
The future for me, personally, will be equally exciting, challenging and busy.
I will be working with a few partners to build the technology platform and the business strategy for what I call, "the insurance company of the future". It will operate efficiently to bring down the cost of insurance and financial services to consumers, using the connectivity and power of the internet.
I intend to provide this solution to existing or new insurance companies operating outside of Singapore.
I will also disseminate my knowledge and years of experience through consultancy and training engagements. I like to continue being involved in transforming organisations with innovative and differentiating competencies.
I want to thank so many colleagues and friends who have worked with me during part or all of the past thirty years. You are wonderful people. I enjoy working with you. I shall miss you. But, we will continue to keep in touch.
If you want to know about my future plans, and how things turn out, you can continue to read my personal blog. I will continue to update it regularly.
Thank you.
Tan Kin Lian
Thursday, October 05, 2006
Wait to recover the loss on technology fund
Dear Mr Tan,
One of my relative bought about $70,000 worth of NTUC technology fund. It is now worth about $40,000. Will this fund grow back to at least $70,000?
When they bought this fund, no one advice them that this is a risky fund. As you mentioned, there are ups and downs.
When will my relative recover at least back to their breakeven point ? How long will it grow back from 20cents to a dollar
KT
------------------
Dear KT
Your relative will have to wait for the tech fund to reach 35 cents (not $1), before they can recover their investment.
I hope that this can happen within the next few years (but I do not know for sure). Many people expect technology to recover by now, but it seems to be taking longer.
They must have invested at a bad time. Many other investors made the investment at a lower price (or have averaged out on their investments), so they are already making a capital gain in this fund.
I have some personal investment in the technology fund as well, made at about the same level as your relative. So, I will also have to wait.
In my case, I have other investments, so the gain in some funds outweigh the losses in the tech fund.
Tan Kin Lian
One of my relative bought about $70,000 worth of NTUC technology fund. It is now worth about $40,000. Will this fund grow back to at least $70,000?
When they bought this fund, no one advice them that this is a risky fund. As you mentioned, there are ups and downs.
When will my relative recover at least back to their breakeven point ? How long will it grow back from 20cents to a dollar
KT
------------------
Dear KT
Your relative will have to wait for the tech fund to reach 35 cents (not $1), before they can recover their investment.
I hope that this can happen within the next few years (but I do not know for sure). Many people expect technology to recover by now, but it seems to be taking longer.
They must have invested at a bad time. Many other investors made the investment at a lower price (or have averaged out on their investments), so they are already making a capital gain in this fund.
I have some personal investment in the technology fund as well, made at about the same level as your relative. So, I will also have to wait.
In my case, I have other investments, so the gain in some funds outweigh the losses in the tech fund.
Tan Kin Lian
Actual return on life insurance policies
There has been some requests for life insurers to post their actual return on their life insurance policies.
NTUC Income wishes to make a start. Here are the actual return on our endowment policies maturing in 2006.
The maturity benefit included the additional bonus distributed on every 5 anniversary.
The actual return on maturity are attractive, varying from 4.2% to 6.2% per annum.
Our maturity values for a 20 year policy is about 15% higher than similar plans
offered by our competitors.
We give a better return to our policyholders, due to lower commission, lower expenses and lower distribution to shareholders.
NTUC Income wishes to make a start. Here are the actual return on our endowment policies maturing in 2006.
Endowment policies maturing in 2006.
Term Taken in Monthly Entry Maturity Yield
premuim age amount
10 yrs 1996 $100 25 $14,800 4.4%
15 yrs 1991 $100 25 $26,600 5.2%
20 yrs 1986 $100 25 $45,800 6.2%
10 yrs 1996 $100 40 $14,600 4.2%
15 yrs 1991 $100 40 $26,100 5.0%
20 yrs 1986 $100 40 $42,200 5.5%
The maturity benefit included the additional bonus distributed on every 5 anniversary.
The actual return on maturity are attractive, varying from 4.2% to 6.2% per annum.
Our maturity values for a 20 year policy is about 15% higher than similar plans
offered by our competitors.
We give a better return to our policyholders, due to lower commission, lower expenses and lower distribution to shareholders.
StateStreet STI (Tracker Fund)
Two or three years ago, I invested $207,000 in the StateStreet STI tracker fund. It is listed in the Singapore Exchange. This fund aims to track the STI index.
The fund performed well. It appreciated to $328,000 now. I obtained a gain of 58% over this period.
This must be my best personal investment. My other stock selection did not do well.
Timing is one factor for this good return. When I invested, the STI was at around 1600. Today, it is at 2600. So, the chance to make this kind of exceptional return has passed, at least for the near future.
The fund performed well. It appreciated to $328,000 now. I obtained a gain of 58% over this period.
This must be my best personal investment. My other stock selection did not do well.
Timing is one factor for this good return. When I invested, the STI was at around 1600. Today, it is at 2600. So, the chance to make this kind of exceptional return has passed, at least for the near future.
Which ie better - Growth Fund or Global Equity Fund?
Which is better - Growth Fund or Global Equity Fund?
My view: both are suitable.
The Global Equity Fund has 100% invested in equity. It is suitable for long term investments, ie 10 years or longer.
The Growth Fund has 70% invested in equity and 30% in bonds. It has less volatibility and a slightly lower return. But the difference is small.
Most of my personal investments are in the Growth Fund. I may find a suitable time in the future to switch to Global Equity (eg if there is a severe market correction). In the meantime, my current investment is satisfactory.
My view: both are suitable.
The Global Equity Fund has 100% invested in equity. It is suitable for long term investments, ie 10 years or longer.
The Growth Fund has 70% invested in equity and 30% in bonds. It has less volatibility and a slightly lower return. But the difference is small.
Most of my personal investments are in the Growth Fund. I may find a suitable time in the future to switch to Global Equity (eg if there is a severe market correction). In the meantime, my current investment is satisfactory.
550 people visit my blog daily
About 550 people visit my blog daily. This is a drop from 1,100 last week. But it is almost twice the average number of visitors previously (before news of my departure from NTUC Income). Maybe, it two weeks time, it will come back to the normal number?
Wednesday, October 04, 2006
Disappointed with Dynamic Guaranteed Fund
Dear Mr Tan,
I am a loyal customer of NTUC Income. I am quite upset about the way my investment was managed. I was introduced to the Dynamic Guaranteed Fund 5 years ago by my insurance agent.
After a couple of years, I realised that the fund is not progressing. I requested an explanation and was told that I can switch to Ideal Plan. I decided not to make the switch then.
My grudge is why must I hold on to the fund for 5 years if the fund managers are not confident of delivering good returns? Shouldn't my money be refunded back without incurring any cost so that I can make a better return elsewhere?
Though it was just a token sum of money that I had invested, I have decided not to purchase "You Need Trust" in future as I can only trust myself.
NHL
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Dear NHL
I am sorry that you are disappointed with the investment. Many people share your same views.
I hope that you have received our FAQ that explain the situation. I am not able to beyond what has already been explained. I hope that you understand my difficulty.
Tan Kin Lian
I am a loyal customer of NTUC Income. I am quite upset about the way my investment was managed. I was introduced to the Dynamic Guaranteed Fund 5 years ago by my insurance agent.
After a couple of years, I realised that the fund is not progressing. I requested an explanation and was told that I can switch to Ideal Plan. I decided not to make the switch then.
My grudge is why must I hold on to the fund for 5 years if the fund managers are not confident of delivering good returns? Shouldn't my money be refunded back without incurring any cost so that I can make a better return elsewhere?
Though it was just a token sum of money that I had invested, I have decided not to purchase "You Need Trust" in future as I can only trust myself.
NHL
--------------
Dear NHL
I am sorry that you are disappointed with the investment. Many people share your same views.
I hope that you have received our FAQ that explain the situation. I am not able to beyond what has already been explained. I hope that you understand my difficulty.
Tan Kin Lian
Policyholder tops up investment in Growth Fund
Dear Mr Tan
I believe you have given me good advice.
I will try to put in another $8000 or $10,000 quite soon and then arrange to withdraw $400 monthly. How much would I need to invest in Growth fund in total to withdraw $500 monthly? This would be my limit.
I might sell one of my single company stocks to achieve this or just withdraw from my fixed deposit when it matures. Growth Fund is much more stable because it is so diversified.
Did you know the banks are giving less than 3% annually for fixed depoosit below $50,000?
I am glad you will be leaving many of your investments in NTUC Income even after you leave. This is reassuring.
VS
-----------------------
Dear VS
If you wish to have a monthly payment of $500 for 20 years, you will need the following capital sum:
- assuming the fund earn 5% per annum: $77,000
- assuming the fund earn 5.5% per annum: $74,000
- assuming the fund earns 6% per annum: $71,000
Thank you for updating me that the banks now pay less than 3% interest. I suspect that interest rate has dropped, but I was not sure. Your information confirmed it!
Tan Kin Lian
I believe you have given me good advice.
I will try to put in another $8000 or $10,000 quite soon and then arrange to withdraw $400 monthly. How much would I need to invest in Growth fund in total to withdraw $500 monthly? This would be my limit.
I might sell one of my single company stocks to achieve this or just withdraw from my fixed deposit when it matures. Growth Fund is much more stable because it is so diversified.
Did you know the banks are giving less than 3% annually for fixed depoosit below $50,000?
I am glad you will be leaving many of your investments in NTUC Income even after you leave. This is reassuring.
VS
-----------------------
Dear VS
If you wish to have a monthly payment of $500 for 20 years, you will need the following capital sum:
- assuming the fund earn 5% per annum: $77,000
- assuming the fund earn 5.5% per annum: $74,000
- assuming the fund earns 6% per annum: $71,000
Thank you for updating me that the banks now pay less than 3% interest. I suspect that interest rate has dropped, but I was not sure. Your information confirmed it!
Tan Kin Lian
Wonderful experience at Business Center
Dear Mr Pius,
I would like to bring to your attention a very good staff that you have under your employment, her name is JK and she's working at the Business Centre.
I am very pleased with the way she has advised and served me when I went down to the NTUC Income Bras Basah Branch.
I am very impressed with her professionalism and amiable nature as she patiently explained the investment products that NTUC could offer. She was able to make me feel very comfortable with her as she answered my queries.
I have come across 'financial advisors' who are insincere and impatient with clients' queries but JK stands out to be very different from the ones I met.
She understand my needs and make appropriate and sound recommendations. She further advised me to invest my CPF with the Growth Fund. She was even willing to go beyond her office hours just so that she could explain my investments in detail. She did all these with no strings attached. We were the last to leave the office on that day - about 7.30pm.
I am very pleased with Jassie and she has made my experience with NTUC Income a delightful one.
I hope NTUC Income will have more of such exemplary Insurance Consultants. I look forward to future partnerships with NTUC Income.
ASH
I would like to bring to your attention a very good staff that you have under your employment, her name is JK and she's working at the Business Centre.
I am very pleased with the way she has advised and served me when I went down to the NTUC Income Bras Basah Branch.
I am very impressed with her professionalism and amiable nature as she patiently explained the investment products that NTUC could offer. She was able to make me feel very comfortable with her as she answered my queries.
I have come across 'financial advisors' who are insincere and impatient with clients' queries but JK stands out to be very different from the ones I met.
She understand my needs and make appropriate and sound recommendations. She further advised me to invest my CPF with the Growth Fund. She was even willing to go beyond her office hours just so that she could explain my investments in detail. She did all these with no strings attached. We were the last to leave the office on that day - about 7.30pm.
I am very pleased with Jassie and she has made my experience with NTUC Income a delightful one.
I hope NTUC Income will have more of such exemplary Insurance Consultants. I look forward to future partnerships with NTUC Income.
ASH
Which is better - combined or inexed fund?
Which is better - indexed or combined fund?
My answer: both are suitable.
Both funds have low annual charges:
- combined fund (from NTUC Income) charge about 1% annually
- indexed fund (not available yet) will charge about 0.5% annually
The difference of 0.5% is small. The combined fund is actively managed and is likely to earn more than this difference.
Both of these funds are much better than similar funds in the market where the annual charge could be 1.5% to 3% per annum (if other hidden charges are included).
I suggest that the investor can invest in the combined fund now, and decide at a later date, if you wish to switch to an indexed fund (when it becomes available).
The most important principle is:
- choose a large, well diversified fund
- look for low charges, ie 1% or less
My answer: both are suitable.
Both funds have low annual charges:
- combined fund (from NTUC Income) charge about 1% annually
- indexed fund (not available yet) will charge about 0.5% annually
The difference of 0.5% is small. The combined fund is actively managed and is likely to earn more than this difference.
Both of these funds are much better than similar funds in the market where the annual charge could be 1.5% to 3% per annum (if other hidden charges are included).
I suggest that the investor can invest in the combined fund now, and decide at a later date, if you wish to switch to an indexed fund (when it becomes available).
The most important principle is:
- choose a large, well diversified fund
- look for low charges, ie 1% or less
I shall keep my money with NTUC Income
Dear Mr Tan
I might even invest some more money at a future date, but perhaps should not put all my savings into Income and should have some fixed deposits in the banks.
Who knows how the company will manage without you?
VS
----------------
Dear VS
I advise against putting your money in the bank. They can pay interest at only 3% per annum. It is better to put the money in the Growth Fund, as the return is likely to be much higher.
Don't worry about how Income will manage without me. It will do well.
I have a lot of my personal savings invested in the funds managed by NTUC Income. I shall keep the money there, after I leave NTUC Income.
Tan Kin Lian
I might even invest some more money at a future date, but perhaps should not put all my savings into Income and should have some fixed deposits in the banks.
Who knows how the company will manage without you?
VS
----------------
Dear VS
I advise against putting your money in the bank. They can pay interest at only 3% per annum. It is better to put the money in the Growth Fund, as the return is likely to be much higher.
Don't worry about how Income will manage without me. It will do well.
I have a lot of my personal savings invested in the funds managed by NTUC Income. I shall keep the money there, after I leave NTUC Income.
Tan Kin Lian
Saddened by your sudden decision
Dear Kin Lian
I am SADDENED by your sudden decision to leave NTUC iNCOME.
The way it unfolded was not nice at all and was not done in good taste. From the public perception it wasn't good and fair treatment of someone who has done a lot for Singapore through NTUC INCOME and for people like us, poor motorists and life insurance policy holders, who have been exploited by other insurance companies to say the least.
But there is a lesson in life. People, organisations and Singapore society quickly and conveniently forget what you have done for them and quickly move on. In no time, you are history forgotten and irrelevant, if you no longer serve their purpose.
And there will be fair weathered friends surfacing that you did not realise exist.
I want to stand up for you. I sincerely hope that you will carve out another icon or simply retire and enjoy your life as you wish.
Singapore needs more people like you who can stand up. Far to many Singapore CEOs, esp in certain secured job areas, are apple polishing and weak and have no passion nor commitment.
All the best
AT
----------------------
Dear AT
Thanks are not as bad as you have painted. I do intend to continue working on interesting projects in the future. You can keep in touch with me through my blog.
Tan Kin Lian
I am SADDENED by your sudden decision to leave NTUC iNCOME.
The way it unfolded was not nice at all and was not done in good taste. From the public perception it wasn't good and fair treatment of someone who has done a lot for Singapore through NTUC INCOME and for people like us, poor motorists and life insurance policy holders, who have been exploited by other insurance companies to say the least.
But there is a lesson in life. People, organisations and Singapore society quickly and conveniently forget what you have done for them and quickly move on. In no time, you are history forgotten and irrelevant, if you no longer serve their purpose.
And there will be fair weathered friends surfacing that you did not realise exist.
I want to stand up for you. I sincerely hope that you will carve out another icon or simply retire and enjoy your life as you wish.
Singapore needs more people like you who can stand up. Far to many Singapore CEOs, esp in certain secured job areas, are apple polishing and weak and have no passion nor commitment.
All the best
AT
----------------------
Dear AT
Thanks are not as bad as you have painted. I do intend to continue working on interesting projects in the future. You can keep in touch with me through my blog.
Tan Kin Lian
Both parties give different versions of the accident
FROM THIRD PARTY CLAIMANT:
Dear Mr Tan,
My parked 2-month old vehicle was badly damaged by a hit-and-run lorry. I wasn’t at the scene as I was working in my office. I was traumatized and greatly despaired to see the state of my car when I returned to it much later.
I managed to find out from a witness, owner of a drink stall just next to the accident scene, that a lorry hit some parked vehicle at the scene.
With the witness’ statement, I made a police report.
I immediately put up notices at the accident scene to seek for witnesses who saw the number plate of lorry driver. I visited the scene every day to gather any information that would help to identify the lorry.
In fact, I came across at least 3 witnesses who witnessed the accident but not the number plate of the culprit. You can imagine the stress that I have gone through. Finally, a witness responded to my notice with the number plate of the culprit.
It happened that the lorry was insured by NTUC Income as I found out through LTA search service. I have since provided the information to the Investigation Officer.
I have also made a claim to NTUC Income against the lorry driver with all the necessary documents, including police report, survey report and contact information of Investigation Officer.
To my horror, your claim officer, replied that her insured claimed ignorance of the accident and that his lorry was not damaged, despite of existence of witnesses!
Your advice and help will be greatly appreciated.
OSH
----------------
REPLY FROM MY MOTOR INSURANCE MANAGER
Dear OSH
According to your email, our policyholder denied getting involved in the accident with your car and the police is currently investigating into it.
We hope you understand that we are not able to settle your claim with the present facts. Our policyholder will be very angry with us if we ignore his story and settle your claim.
To expedite matter, I will ask one of our investigator to have a thorough interview with our policyholder and we will see what come out of it.
Eddie Loke
Dear Mr Tan,
My parked 2-month old vehicle was badly damaged by a hit-and-run lorry. I wasn’t at the scene as I was working in my office. I was traumatized and greatly despaired to see the state of my car when I returned to it much later.
I managed to find out from a witness, owner of a drink stall just next to the accident scene, that a lorry hit some parked vehicle at the scene.
With the witness’ statement, I made a police report.
I immediately put up notices at the accident scene to seek for witnesses who saw the number plate of lorry driver. I visited the scene every day to gather any information that would help to identify the lorry.
In fact, I came across at least 3 witnesses who witnessed the accident but not the number plate of the culprit. You can imagine the stress that I have gone through. Finally, a witness responded to my notice with the number plate of the culprit.
It happened that the lorry was insured by NTUC Income as I found out through LTA search service. I have since provided the information to the Investigation Officer.
I have also made a claim to NTUC Income against the lorry driver with all the necessary documents, including police report, survey report and contact information of Investigation Officer.
To my horror, your claim officer, replied that her insured claimed ignorance of the accident and that his lorry was not damaged, despite of existence of witnesses!
Your advice and help will be greatly appreciated.
OSH
----------------
REPLY FROM MY MOTOR INSURANCE MANAGER
Dear OSH
According to your email, our policyholder denied getting involved in the accident with your car and the police is currently investigating into it.
We hope you understand that we are not able to settle your claim with the present facts. Our policyholder will be very angry with us if we ignore his story and settle your claim.
To expedite matter, I will ask one of our investigator to have a thorough interview with our policyholder and we will see what come out of it.
Eddie Loke
Tuesday, October 03, 2006
Is my investment of $62,000 adequate?
Dear Mr Tan
Do you think the Growth Fund is good to invest in long term? Or is Global Equities better?
Recently I bought $62,000 into Growth Fund ( switching some of my Balanced fund and Spore Equity units ) and also topping up with new funds.
I have asked for a withdrawal of $300 monthly for my monthly expenses, as I am a retiree.
Do you think my investments can sustain this withdrawal?
VS
---------------
Dear VS
Both the Growth Fund and the Global Equity Fund are suitable.
If you have invested $62,000 and you draw out $300 a month a month, the investment can last you more than 35 years (if you earn an average of 5% p.a.) and nearly 50 years (if you earn an average of 5.5% p.a.). The balance on the money passes to your estate on death (provided that the money does not run out). I think that your invested sum is adequate.
You can ask your adviser to explain more to you.
Tan Kin Lian
Do you think the Growth Fund is good to invest in long term? Or is Global Equities better?
Recently I bought $62,000 into Growth Fund ( switching some of my Balanced fund and Spore Equity units ) and also topping up with new funds.
I have asked for a withdrawal of $300 monthly for my monthly expenses, as I am a retiree.
Do you think my investments can sustain this withdrawal?
VS
---------------
Dear VS
Both the Growth Fund and the Global Equity Fund are suitable.
If you have invested $62,000 and you draw out $300 a month a month, the investment can last you more than 35 years (if you earn an average of 5% p.a.) and nearly 50 years (if you earn an average of 5.5% p.a.). The balance on the money passes to your estate on death (provided that the money does not run out). I think that your invested sum is adequate.
You can ask your adviser to explain more to you.
Tan Kin Lian
I agree with you entirely!
Hi Mr.Tan,
I read with mixed feelings the news regarding your planned departure from NTUC Income in April 2007.
On one hand, I felt sad to see someone who always wants to give the policyholders a good deal leave NTUC Income, my preferred insurer.
On the other hand, I felt that trying your hand on something new after 30 years on a job may turn out to be refreshing and challenging for an active mind like yourself.
Despite your position as a large company's CEO which may sometimes attract undue criticism, you always speak your mind, sometimes on topics not linked to insurance. You always have a view on any issue.
For this, I admire you even though at times my own views on some matters differ from yours.
May I wish you happiness and success in your future endeavours.
CKK
---------------
Dear CKK
Thank you.
On this matter, I agree with you entirely.
Wish you all the best!
Tan Kin Lian
I read with mixed feelings the news regarding your planned departure from NTUC Income in April 2007.
On one hand, I felt sad to see someone who always wants to give the policyholders a good deal leave NTUC Income, my preferred insurer.
On the other hand, I felt that trying your hand on something new after 30 years on a job may turn out to be refreshing and challenging for an active mind like yourself.
Despite your position as a large company's CEO which may sometimes attract undue criticism, you always speak your mind, sometimes on topics not linked to insurance. You always have a view on any issue.
For this, I admire you even though at times my own views on some matters differ from yours.
May I wish you happiness and success in your future endeavours.
CKK
---------------
Dear CKK
Thank you.
On this matter, I agree with you entirely.
Wish you all the best!
Tan Kin Lian
Monday, October 02, 2006
Is it advisable to downgrade to a lower plan?
FROM A POLICYHOLDER
Dear Mr Tan
A few years back, my family upgraded Incomeshield plan from B to A.
For me personally, should I be hospitalised, I would like to stay in a subsidised ward, ie B2. That being the case, since the deductible and co-ins is higher for A plan than B, isn't it advisible for me to downgrade from Plan A to B?
AL
-----------------
Dear AL
We advise our policyholders that if they are comfortable with B1 or B2 ward, there is no need to purchase a higher medical plan and pay a higher premium.
As we grow older and move to a higher age-band, the premium will increase. We should move to a lower plan so that the premium remain affordable. There is a higher government subsidy for restructured hospitals at the lower class wards.
If our policyholder is insured under a higher plan and opt to be treated in a lower class ward, we apply the deductible of the lower ward. This is reflected in our FAQ: http://www.income.coop/insurance/incshield/faq.asp.
Tan Kin Lian
CEO
Dear Mr Tan
A few years back, my family upgraded Incomeshield plan from B to A.
For me personally, should I be hospitalised, I would like to stay in a subsidised ward, ie B2. That being the case, since the deductible and co-ins is higher for A plan than B, isn't it advisible for me to downgrade from Plan A to B?
AL
-----------------
Dear AL
We advise our policyholders that if they are comfortable with B1 or B2 ward, there is no need to purchase a higher medical plan and pay a higher premium.
As we grow older and move to a higher age-band, the premium will increase. We should move to a lower plan so that the premium remain affordable. There is a higher government subsidy for restructured hospitals at the lower class wards.
If our policyholder is insured under a higher plan and opt to be treated in a lower class ward, we apply the deductible of the lower ward. This is reflected in our FAQ: http://www.income.coop/insurance/incshield/faq.asp.
Tan Kin Lian
CEO
How to identify people with strategic thinking?
FROM A BUSINESS ASSOCIATE:
Hi Kin Lian,
History has thought us that as leader of a Strategic Business Unit, we do recognize that there are basically two types of employee we need to run a business and to leap forward successfully; one that is doer and one that contribute strategic or creative ideas when needed.
The first type is most easily found in today’s world, but the latter type is almost hard to find. But we need them especially so when we are living in such a competitive environment. Not all leaders are creative.
In your many years of leading NTUC Income, I am sure many of the creative ideas were generated which have brought NTUC Income to such great success.
How do you go about sourcing for such type of employees who can contribute to strategies and great ideas? What criteria you would place upon to sieve out such people? Where do you normally source from ?
I found that if the existing employees do not possess such competency, many hours of brainstorming would not yield results. What is your opinion ?
SK
------------------------------------------------------
Dear SK
Here are my views about creating an environment for creative and strategic thinking colleagues to come forward.
- strategic thinking is a process
- we have to try it and see if it works
- if it does not work, it is just theory
- the leader must be prepared to back the strategic thinking
I have to play this role in NTUC Income. I encourage my colleagues to think "out of the box". I encourage them to "do, learn, adapt". What is strategic happens only if it is tried and found to work. If it does not work, we try again.
My colleagues love this approach. So, we do have some great creative things that are done in NTUC Income, which contribute to our success.
I hope that these points are useful to you.
Tan Kin Lian
Hi Kin Lian,
History has thought us that as leader of a Strategic Business Unit, we do recognize that there are basically two types of employee we need to run a business and to leap forward successfully; one that is doer and one that contribute strategic or creative ideas when needed.
The first type is most easily found in today’s world, but the latter type is almost hard to find. But we need them especially so when we are living in such a competitive environment. Not all leaders are creative.
In your many years of leading NTUC Income, I am sure many of the creative ideas were generated which have brought NTUC Income to such great success.
How do you go about sourcing for such type of employees who can contribute to strategies and great ideas? What criteria you would place upon to sieve out such people? Where do you normally source from ?
I found that if the existing employees do not possess such competency, many hours of brainstorming would not yield results. What is your opinion ?
SK
------------------------------------------------------
Dear SK
Here are my views about creating an environment for creative and strategic thinking colleagues to come forward.
- strategic thinking is a process
- we have to try it and see if it works
- if it does not work, it is just theory
- the leader must be prepared to back the strategic thinking
I have to play this role in NTUC Income. I encourage my colleagues to think "out of the box". I encourage them to "do, learn, adapt". What is strategic happens only if it is tried and found to work. If it does not work, we try again.
My colleagues love this approach. So, we do have some great creative things that are done in NTUC Income, which contribute to our success.
I hope that these points are useful to you.
Tan Kin Lian
Sunday, October 01, 2006
Projected bonus on participating policies
The Sunday Times printed an lengthy article to explain the projected bonus on participating policies.
I received the following question from the public:
- how can I find out the actual investment return earned by the various life insurance companies?
- does a company with a higher investment return give higher bonus to their policyholders?
I gave this reply:
- generally, a company that earns a higher investment return should be able to give a higher bonus, and a better return
- but it also depends on their expense ratio and the amount of the profits taken by their shareholders.
It is better to ask the company to tell you about the actual return earned on a policy that was taken 10, 15 and 20 years ago and matured this year.
You can compute the actual return on the policy, and compare it with the return on similar policies taken with other companies. This comparison is more straightforward.
-----------------------------------------------
Here is an example.
A customer bought a endowment policy 20 years ago, and paid a monthly premium of $100. The policy matured recently.
If the participating fund earned an average of 6% per annum, and paid ALL of the gain to the customer, the customer would have received a maturity beenfit of $47,000.
Most life funds would probably have given a return of about $37,000 (ie about 4% per annum). The difference of $10,000 is used to pay the agent commission, expenses and profit to the shareholders.
An insurance company operating at low cost may be able to give about $42,000 (ie about 5% per annum). They pay lower commission and expenses and give less to shareholders. Compared to similar "high cost" products, they can give agout 15% more on maturity.
I received the following question from the public:
- how can I find out the actual investment return earned by the various life insurance companies?
- does a company with a higher investment return give higher bonus to their policyholders?
I gave this reply:
- generally, a company that earns a higher investment return should be able to give a higher bonus, and a better return
- but it also depends on their expense ratio and the amount of the profits taken by their shareholders.
It is better to ask the company to tell you about the actual return earned on a policy that was taken 10, 15 and 20 years ago and matured this year.
You can compute the actual return on the policy, and compare it with the return on similar policies taken with other companies. This comparison is more straightforward.
-----------------------------------------------
Here is an example.
A customer bought a endowment policy 20 years ago, and paid a monthly premium of $100. The policy matured recently.
If the participating fund earned an average of 6% per annum, and paid ALL of the gain to the customer, the customer would have received a maturity beenfit of $47,000.
Most life funds would probably have given a return of about $37,000 (ie about 4% per annum). The difference of $10,000 is used to pay the agent commission, expenses and profit to the shareholders.
An insurance company operating at low cost may be able to give about $42,000 (ie about 5% per annum). They pay lower commission and expenses and give less to shareholders. Compared to similar "high cost" products, they can give agout 15% more on maturity.
Saturday, September 30, 2006
Average of 1,100 visitors
An average of 1,100 visitors read my blog daily for the past week. This is unusually high, and is due to news of my impending departure from NTUC Income.
I expect the number to drop back to the normal traffic of 300 daily, after the news wears off.
I shall be writing more about my future plans in this blog. I shall explore the feasibility of introducing a "private pension plan" or "lifestyle fund" for the CPF members.
I expect the number to drop back to the normal traffic of 300 daily, after the news wears off.
I shall be writing more about my future plans in this blog. I shall explore the feasibility of introducing a "private pension plan" or "lifestyle fund" for the CPF members.
Basic courtesy to call back
Dear Mr Tan,
I wish to highlight is the service quality of the enquiry hotline. If you have been promised that someone from a Company would check and revert to you within a stipulated time, isn't it at least basic courtesy to return call to the customer even if you do not have the answer to the query?
FG
-------------------------------
Dear FG
I agree with you. It is basic courtesy to return the call within the promised time, even if we do not have the answer.
I have been caught in this situation personally. I returned a call at the promised time, but the other person is not available or the call cannot get through.
I hope that you do not consider this to be an excuse, because it does happen quite often.
Tan Kin Lian
I wish to highlight is the service quality of the enquiry hotline. If you have been promised that someone from a Company would check and revert to you within a stipulated time, isn't it at least basic courtesy to return call to the customer even if you do not have the answer to the query?
FG
-------------------------------
Dear FG
I agree with you. It is basic courtesy to return the call within the promised time, even if we do not have the answer.
I have been caught in this situation personally. I returned a call at the promised time, but the other person is not available or the call cannot get through.
I hope that you do not consider this to be an excuse, because it does happen quite often.
Tan Kin Lian
Some views on Income agents
Hi,
I am not a policy holder of Income or any other insurance companies.
Recently, insurance agents had been stalking bus stations, MRTs, shopping malls and any other places where there is a crowd. In pretence of doing a survey, then they try to hard sell.. Perhaps I am not so versatile enough to travel round Singapore
because up to now. I have yet to see any Income insurance agents doing that.
So far, from my encounters when Income Agents had leave me a good impression. They explain, elaborate but never really hard sell. And I think that needs a lot of discipline within the corporate company itself. Of course it might not be totally your merit but a healthy corporate image do needs a lot of effort in it.
SL
I am not a policy holder of Income or any other insurance companies.
Recently, insurance agents had been stalking bus stations, MRTs, shopping malls and any other places where there is a crowd. In pretence of doing a survey, then they try to hard sell.. Perhaps I am not so versatile enough to travel round Singapore
because up to now. I have yet to see any Income insurance agents doing that.
So far, from my encounters when Income Agents had leave me a good impression. They explain, elaborate but never really hard sell. And I think that needs a lot of discipline within the corporate company itself. Of course it might not be totally your merit but a healthy corporate image do needs a lot of effort in it.
SL
Friday, September 29, 2006
Invest in an indexed fund
An indexed fund is a large fund that is benchmarked against the market index. The fund manager's job is to make investments to follow the components of the market index. This is also called "passive investment".
The advantages of an indexed fund are:
- it is usually a very large fund
- it is well diversified
- the annual charge is very low, maybe 0.5% or less
The fund manager can keep the charges at a low level, as they do not have to pay analysts to study the individual stocks. They just invest mainly to follow the market index.
Studies over the past years have shown that, by investing in the index, the results are better than the average performance of actively managed funds. This is probably due to the low fees and transaction costs.
If you invest in an indexed fund, you do not have to worry about how to pick the right managers. This reduces another challenge.
Many experts have recommended the consumers to invest in the indexed funds.
NOTE: An indexed fund with low charges is not available in Singapore today. But, I expect it to be available in the near future. Watch out for it.
The advantages of an indexed fund are:
- it is usually a very large fund
- it is well diversified
- the annual charge is very low, maybe 0.5% or less
The fund manager can keep the charges at a low level, as they do not have to pay analysts to study the individual stocks. They just invest mainly to follow the market index.
Studies over the past years have shown that, by investing in the index, the results are better than the average performance of actively managed funds. This is probably due to the low fees and transaction costs.
If you invest in an indexed fund, you do not have to worry about how to pick the right managers. This reduces another challenge.
Many experts have recommended the consumers to invest in the indexed funds.
NOTE: An indexed fund with low charges is not available in Singapore today. But, I expect it to be available in the near future. Watch out for it.
High telephone charges in England
I stayed in Manchester for 4 days. I used the telephone in the hotel room to connect to the internet.
I was shocked to received a bill for GBP 220 for 4 days of stay. I asked why the cost is so high.
I was told that the telephone charge is GBP 0.75 for 1 minute by fixed line and GBP 2.50 for mobilephone. This is easily about 30 to 70 times of the charges in Singapore. Apparently, this is the public rate, i.e. not loaded by the hotel.
The hotel agreed to reduce the charge by 50%. It is a nice gesture, but the net sum is still very high.
It seems that the telephone charges are very expensive all over Europe. It must be due to the high tender prices that the telephone companies paid for the 3G network. This is probably a way to recover their large investment.
I was shocked to received a bill for GBP 220 for 4 days of stay. I asked why the cost is so high.
I was told that the telephone charge is GBP 0.75 for 1 minute by fixed line and GBP 2.50 for mobilephone. This is easily about 30 to 70 times of the charges in Singapore. Apparently, this is the public rate, i.e. not loaded by the hotel.
The hotel agreed to reduce the charge by 50%. It is a nice gesture, but the net sum is still very high.
It seems that the telephone charges are very expensive all over Europe. It must be due to the high tender prices that the telephone companies paid for the 3G network. This is probably a way to recover their large investment.
Thursday, September 28, 2006
Customer for 30 years!
Dear Mr Tan,
I am a loyal INCOME policy holder for the last 30 years since my days in national service. I bought my 1st life insurance policy while I was in the Officer Cadet
Course.
Subsequently, I attended a talk by you as the GM of INCOME introducing INCOME to the policy holders.
You are a very hands-on person. Care for the interest of the policy holders. I had some small investments in INCOME because I trust your words. I have confidence in you! You had many innovative products.
Sad to know that you are stepping down though you had been with the Company coming to 30 yrs. You still wants to contribute to the company and care for the
Policy holders. I am sure there are many ways that you can still do it.
Best wishes to you and a BIG Thank you for your contributions to INCOME and the Insurance industry.
NTK
I am a loyal INCOME policy holder for the last 30 years since my days in national service. I bought my 1st life insurance policy while I was in the Officer Cadet
Course.
Subsequently, I attended a talk by you as the GM of INCOME introducing INCOME to the policy holders.
You are a very hands-on person. Care for the interest of the policy holders. I had some small investments in INCOME because I trust your words. I have confidence in you! You had many innovative products.
Sad to know that you are stepping down though you had been with the Company coming to 30 yrs. You still wants to contribute to the company and care for the
Policy holders. I am sure there are many ways that you can still do it.
Best wishes to you and a BIG Thank you for your contributions to INCOME and the Insurance industry.
NTK
Invest for the long term
If you wish to invest for 10 years or longer, my advice is:
- invest in a large fund which is benchmarked to the market index
- choose global equities
- choose a fund with low charges (upfront and annual charges)
- select the right time to realise the investment.
A large fund allows you to diversify and minimise your risk. The fund should have 100 or more investments. If any of the investments turn bad, the impact is likely to be small and is more than offset by the good investments.
By investing for a long period, you can average out the good and bad years. This will give you a good average return. The average return on global equities over a 10 year period has been from 7% to 10% per annum. This is higher than other asset classes.
A global equity fund gives better diversification, compared to investing in any specific country (eg Japan) or sector (eg technology).
By benchmarking to the market index, the fund manager has to invest in the large, well managed companies. This will reduce the speculative risk.
If your fund has low charges, say less than 1% per year, you will be earn most of the return (instead of paying the fund manager).
If you choose the right time to realise your investment, you can get a better return than average. Do not quit when the market is depressed. By patient. Wait some times for the market to recover, and quit at that time.
- invest in a large fund which is benchmarked to the market index
- choose global equities
- choose a fund with low charges (upfront and annual charges)
- select the right time to realise the investment.
A large fund allows you to diversify and minimise your risk. The fund should have 100 or more investments. If any of the investments turn bad, the impact is likely to be small and is more than offset by the good investments.
By investing for a long period, you can average out the good and bad years. This will give you a good average return. The average return on global equities over a 10 year period has been from 7% to 10% per annum. This is higher than other asset classes.
A global equity fund gives better diversification, compared to investing in any specific country (eg Japan) or sector (eg technology).
By benchmarking to the market index, the fund manager has to invest in the large, well managed companies. This will reduce the speculative risk.
If your fund has low charges, say less than 1% per year, you will be earn most of the return (instead of paying the fund manager).
If you choose the right time to realise your investment, you can get a better return than average. Do not quit when the market is depressed. By patient. Wait some times for the market to recover, and quit at that time.
Wednesday, September 27, 2006
Top managers have strong cooperative values
A customer said that he will withhold further purchase from NTUC Income until he finds out the "true colours" of the next chief executive.
I think that this is not necessary.
The general and senior managers who will remain with NTUC Income have strong commitment towards our cooperative principles, to look after the interest of our policyholders. They asked me to convey this message to the public.
After my departure, I will keep my insurances with NTUC Income and will also add to my investments.
NTUC Income is financially strong and is well managed. You can continue to get good value from the cooperative.
I think that this is not necessary.
The general and senior managers who will remain with NTUC Income have strong commitment towards our cooperative principles, to look after the interest of our policyholders. They asked me to convey this message to the public.
After my departure, I will keep my insurances with NTUC Income and will also add to my investments.
NTUC Income is financially strong and is well managed. You can continue to get good value from the cooperative.
A lot of my sales is due to you
FROM A PART TIME AGENT
Dear Mr Tan,
It was a tremendous shock when i read in the media that you are stepping down from Income from April 2007.
I have been an organiser from 1978. A lot my friends and clients have found you to be a very down to earth person who cares for the policyholders.
I find you to be an great gentleman, who is very sincere and a very likeable person even though i was upset with one policy of yours.
Frankly a lot of my sales was done on the strength that you are the CEO. I am small person who is not in the MDRT or COT, but you leaving INCOME brings so much of
sadness in my heart.
For whatever reasons you are leaving , may i wish you all my best wishes, good
health, prosperity and happiness in your future endeavours.
PS
Dear Mr Tan,
It was a tremendous shock when i read in the media that you are stepping down from Income from April 2007.
I have been an organiser from 1978. A lot my friends and clients have found you to be a very down to earth person who cares for the policyholders.
I find you to be an great gentleman, who is very sincere and a very likeable person even though i was upset with one policy of yours.
Frankly a lot of my sales was done on the strength that you are the CEO. I am small person who is not in the MDRT or COT, but you leaving INCOME brings so much of
sadness in my heart.
For whatever reasons you are leaving , may i wish you all my best wishes, good
health, prosperity and happiness in your future endeavours.
PS
Thanks for everything
Hi Mr Tan
Saw your departure news only from Big Trumpet just now.
I just want to express my admiration and respect to you for been there for us through NTUC. I am not an Income policy holder except just a happy consumer at the NTUC supermarket.
Hopefully the new CEO will continue to run NTUC with the S'porean's pocket in mind.
Continue to keep us informed of your happenings through your blog. I wish you good health.
Yours sincerely
GT
Saw your departure news only from Big Trumpet just now.
I just want to express my admiration and respect to you for been there for us through NTUC. I am not an Income policy holder except just a happy consumer at the NTUC supermarket.
Hopefully the new CEO will continue to run NTUC with the S'porean's pocket in mind.
Continue to keep us informed of your happenings through your blog. I wish you good health.
Yours sincerely
GT
A job well done!
Dear Mr. Tan
I'm a loyal fan (a shareholder too)of NTUC Income with serveral policies for 2 reasons:
1. INCOME policies are really competitive in terms of rates and return
2. The fact that you always put comsumers' interest as top priority under your leadership, even at the expense of antagonising your competitors and detractors
You also value 2-way communication and very hands-on, instead of letting your staff do all the work.
I remember an incident that after an unpleasant trip to the snow city, I received a customer service officer of INCOME for my feedback the next day, and this actually gives me an avenue to convey my dissatisfaction.
Such move of valuing customers' opinion is admirable and worth emulating by other service providers.
With your departure, I really do not know how would the next one seating on your hot seat performs.
I wish you all the best in your future endeavours!
Regards
MC
---------------
Dear MC,
Thank you. I am sure that the new CEO will continue all the good things that make our customers happy. Wish you all the best.
Tan Kin Lian
CEO, NTUC Income
I'm a loyal fan (a shareholder too)of NTUC Income with serveral policies for 2 reasons:
1. INCOME policies are really competitive in terms of rates and return
2. The fact that you always put comsumers' interest as top priority under your leadership, even at the expense of antagonising your competitors and detractors
You also value 2-way communication and very hands-on, instead of letting your staff do all the work.
I remember an incident that after an unpleasant trip to the snow city, I received a customer service officer of INCOME for my feedback the next day, and this actually gives me an avenue to convey my dissatisfaction.
Such move of valuing customers' opinion is admirable and worth emulating by other service providers.
With your departure, I really do not know how would the next one seating on your hot seat performs.
I wish you all the best in your future endeavours!
Regards
MC
---------------
Dear MC,
Thank you. I am sure that the new CEO will continue all the good things that make our customers happy. Wish you all the best.
Tan Kin Lian
CEO, NTUC Income
Big shoe to fit
Hi Mr Tan,
You may not know me as there are so many customers that you have delighted in one way or another.
I just read the eNN e-newsletter and realised that you will be leaving the
coop.
Indeed, this will be a big shoe for anyone to fit in and you will be missed. I want to thank you on behalf of all consumers and customers of the coop which you have helped.
You have been an exceptional leader and showed your impartiality in assessment of matters.
Personally, I had 2 cases in the last decade which sought your assistance for resolution and I cant thank you enough for addressing such trivial matters.
Thank you once again and my best wishes to you on your furture endeavours.
Take care.
Best Regards,
TBH
You may not know me as there are so many customers that you have delighted in one way or another.
I just read the eNN e-newsletter and realised that you will be leaving the
coop.
Indeed, this will be a big shoe for anyone to fit in and you will be missed. I want to thank you on behalf of all consumers and customers of the coop which you have helped.
You have been an exceptional leader and showed your impartiality in assessment of matters.
Personally, I had 2 cases in the last decade which sought your assistance for resolution and I cant thank you enough for addressing such trivial matters.
Thank you once again and my best wishes to you on your furture endeavours.
Take care.
Best Regards,
TBH
Why does NTUC Income educate its customers about cooperative values?
HERE IS MY REPLY TO THIS QUESTION FROM A NEW ZEALAND COOPERATIVE LEADER.
NTUC Income has to compete in a competitive market.
In the case of life insurance products that will only mature in 20 years or longer, the consumer is often not clear about the return that they can get from our products, compared to other products offered by the commercial insurance companies. Some of our competitors make bold projections of the return from their products. As the projections are not guaranteed, they can get away with high projections that may be unsustainable.
In such situations, it is important for us to educate the consumers about the cooperative model. Our cooperative shareholders get a modest return on their shares. The remaining profits is distributed as bonus to the policyholders of participating policies.
By educating the consumers, they are more likely to choose NTUC Income for their long term investments.
We educate the consumers at various levels:
- through our insurance advisers who meet them face to face
- through our newsletters sent regularly to our policyholders
- through advertisements and media releases.
We also educate our policyholders that they pay a lower premium on their non-life insurance products, as our aim is to cover the claims and expenses. We do not aim to make a large profit for shareholders.
Tan Kin Lian
CEO, NTUC Income
NTUC Income has to compete in a competitive market.
In the case of life insurance products that will only mature in 20 years or longer, the consumer is often not clear about the return that they can get from our products, compared to other products offered by the commercial insurance companies. Some of our competitors make bold projections of the return from their products. As the projections are not guaranteed, they can get away with high projections that may be unsustainable.
In such situations, it is important for us to educate the consumers about the cooperative model. Our cooperative shareholders get a modest return on their shares. The remaining profits is distributed as bonus to the policyholders of participating policies.
By educating the consumers, they are more likely to choose NTUC Income for their long term investments.
We educate the consumers at various levels:
- through our insurance advisers who meet them face to face
- through our newsletters sent regularly to our policyholders
- through advertisements and media releases.
We also educate our policyholders that they pay a lower premium on their non-life insurance products, as our aim is to cover the claims and expenses. We do not aim to make a large profit for shareholders.
Tan Kin Lian
CEO, NTUC Income
Tuesday, September 26, 2006
Commission on motor insurance in Europe
I am now in Manchester, UK.
The motor insurance manager of a Swedish insurance company told me that the commission payable to the agent is an upfront commission of about 5% to 7%. There is no renewal commission.
Most of the motor insurance are done through the telephone. The agent does not have to do much work.
In Germany, many large insurers follow a similar system, ie a small upfront commission with no renewal commission.
The competitive market has forced down the commission to this level. This has been the case for many years. Lower commission means lower cost to the consumers.
The motor insurance manager of a Swedish insurance company told me that the commission payable to the agent is an upfront commission of about 5% to 7%. There is no renewal commission.
Most of the motor insurance are done through the telephone. The agent does not have to do much work.
In Germany, many large insurers follow a similar system, ie a small upfront commission with no renewal commission.
The competitive market has forced down the commission to this level. This has been the case for many years. Lower commission means lower cost to the consumers.
Monday, September 25, 2006
Private Pension Plan
Three years ago, the CPF wanted to introduce a Private Pension Plan (PPP) for their members.
The aim was:
- offer large, well diversified funds for members to invest
- a small number of fund managers will be selected
- no upfront fee
- marketing and educating will be done by CPF
- a modest annual charge
- a trailer charge, for members who encash earlier
The fund management industry did not like the "no upfront fee". The PPP plan was shelved.
I think that the earlier proposal by CPF is sound. I hope that someone will introduce this PPP option for CPF members. It will help them to make the right investments.
The aim was:
- offer large, well diversified funds for members to invest
- a small number of fund managers will be selected
- no upfront fee
- marketing and educating will be done by CPF
- a modest annual charge
- a trailer charge, for members who encash earlier
The fund management industry did not like the "no upfront fee". The PPP plan was shelved.
I think that the earlier proposal by CPF is sound. I hope that someone will introduce this PPP option for CPF members. It will help them to make the right investments.
Migrated agent done well
MESSAGE FROM MIGRATED AGENT
Dear Mr Tan,
I have spoken to a journalist and I told her that I would like to give her an honest and fair view.
Spoken to her that I am a migrated agent and have done very well in NTUC Income.
company.
I have a good support from company, management and we have a very good CEO, who have contributed much to NTUC Income for so many years.
I told her the direct channel has not affected my business.
Commercial companies have bancassurance, so to have a direct channel is good. As
a Cooperative, we have always kept our expenses low.
VS
Dear Mr Tan,
I have spoken to a journalist and I told her that I would like to give her an honest and fair view.
Spoken to her that I am a migrated agent and have done very well in NTUC Income.
company.
I have a good support from company, management and we have a very good CEO, who have contributed much to NTUC Income for so many years.
I told her the direct channel has not affected my business.
Commercial companies have bancassurance, so to have a direct channel is good. As
a Cooperative, we have always kept our expenses low.
VS
Top insurance advisers earn well
Several top insurance advisers in NTUC Income earn more than $300,000 a year. They actually earn a lower rate of commission on each policy (about half of the market rate), but they earn more than a large volume of sales.
They are showing an increase in earnings compared to past years.
It is easy to sell the products from NTUC Income because they give good value to the customers. We have a good brand image. Customers prefer to buy from NTUC Income.
The advisers also benefit from the increased cross selling activities this year. We now generate 25,000 new sales leads each month, most of which come from existing customers. It is easy for our advisers to follow up and close more sales.
More sales are now done by the advisers by entering through the internet. The adviser does not need to visit the customer or complete any application form. This reduces the time to close the sale and increase the productivity.
Several agents who migrated to us from other companies are seeing a large increase in their earnings.
They are showing an increase in earnings compared to past years.
It is easy to sell the products from NTUC Income because they give good value to the customers. We have a good brand image. Customers prefer to buy from NTUC Income.
The advisers also benefit from the increased cross selling activities this year. We now generate 25,000 new sales leads each month, most of which come from existing customers. It is easy for our advisers to follow up and close more sales.
More sales are now done by the advisers by entering through the internet. The adviser does not need to visit the customer or complete any application form. This reduces the time to close the sale and increase the productivity.
Several agents who migrated to us from other companies are seeing a large increase in their earnings.
Next CEO will continue to take good care of consumers
MESSAGE FROM POLICYHOLDER
Hi Mr Tan,
I am both sad and concerned that you are going into early retirement.
Sad because you have run the cooperative so well, notwithstanding the controversies you sometime stirred.
I am worried because the next CEO might adopt a different marketing tack, raising premium rates.
I have Living Policies, Incomeshield and a number of other policies with Income precisely because I like what you have been doing at the cooperative. I am afraid that the next CEO might not share your approach in keeping costs down and allowing customers to share the savings.
Very concerned.
Regards,
TTY
------------------------
Dear TTY
I also share your hope that the next CEO will continue the same strategy to take good care of the consumers.
Tan Kin Lian
CEO, NTUC Income
Hi Mr Tan,
I am both sad and concerned that you are going into early retirement.
Sad because you have run the cooperative so well, notwithstanding the controversies you sometime stirred.
I am worried because the next CEO might adopt a different marketing tack, raising premium rates.
I have Living Policies, Incomeshield and a number of other policies with Income precisely because I like what you have been doing at the cooperative. I am afraid that the next CEO might not share your approach in keeping costs down and allowing customers to share the savings.
Very concerned.
Regards,
TTY
------------------------
Dear TTY
I also share your hope that the next CEO will continue the same strategy to take good care of the consumers.
Tan Kin Lian
CEO, NTUC Income
The next CEO will lead Income well
FROM POLICYHOLDER
Hi Mr Tan,
I read with much disappointment about your decision to retire from NTUC Income.
Two months ago, I emailed and sought your advice regarding buying a growth or annuity plan and indicated my high regard for your leadership and capable management of NTUC Income.
Like many others, I bought policies from NTUC Income because we trust your caring interest and responsible stewardship of monies of Income clients. It's precisely because you're the top man there that I decided to buy another growth policy just recently. The amount is modest but it represents my retirement fund and means a fortune to me.
I share with others the deep disappointment of your intended departure and wish you could change your mind. You're very well respected in the insurance industry but you remain humble and approachable to the common folks . It's hard to get someone to fit into your shoes. It'ld be great if you could you reconsider your move.
Sincerely,
CGC
------------------
Dear CGC
Thank you.
I am sure that the new CEO will be able to lead the organisation well, towards the next stage of its development.
Hi Mr Tan,
I read with much disappointment about your decision to retire from NTUC Income.
Two months ago, I emailed and sought your advice regarding buying a growth or annuity plan and indicated my high regard for your leadership and capable management of NTUC Income.
Like many others, I bought policies from NTUC Income because we trust your caring interest and responsible stewardship of monies of Income clients. It's precisely because you're the top man there that I decided to buy another growth policy just recently. The amount is modest but it represents my retirement fund and means a fortune to me.
I share with others the deep disappointment of your intended departure and wish you could change your mind. You're very well respected in the insurance industry but you remain humble and approachable to the common folks . It's hard to get someone to fit into your shoes. It'ld be great if you could you reconsider your move.
Sincerely,
CGC
------------------
Dear CGC
Thank you.
I am sure that the new CEO will be able to lead the organisation well, towards the next stage of its development.
1,200 visitors to my blog
I used to have an average of 250 visitors to my blog.
Since the news of my impending departure from NTUC Income, 1,000 people visited my blog on Saturday and 1,200 on Sunday.
This will probably continue for a few days, before it reverts to the normal traffic.
Since the news of my impending departure from NTUC Income, 1,000 people visited my blog on Saturday and 1,200 on Sunday.
This will probably continue for a few days, before it reverts to the normal traffic.
Sunday, September 24, 2006
Dare to be different
MESSAGE FROM A FORMER ASSOCIATE
Dear Mr Tan
Reading the ST report on your departure on Saturday makes me feel that corporate entrepreneurship is not seen as a virtue, at least by some people in Singapore.
Daring to be different from industry norm is one way for Singapore Inc to remake itself, especially so for a giant such as NTUC Income, which is competing with MNCs such as AIA, Prudential and the likes.
I salute the way you apply out of the box thinking method on motor insurance as well as agents' renumeration. The thinking behind is to offer the best value to consumers at the lowest possible price, which can only be made possible with a lowest viable cost structure.
I feel that the ST Saturday's report did not provide a balance enough coverage of the merits and demerits of your policies. I do not think they have gathered sufficient facts and figure to give a fair comment on such policies.
Nevertheless, I trust that Singaporeans are smart enough to see that. So no worries.
WL
Dear Mr Tan
Reading the ST report on your departure on Saturday makes me feel that corporate entrepreneurship is not seen as a virtue, at least by some people in Singapore.
Daring to be different from industry norm is one way for Singapore Inc to remake itself, especially so for a giant such as NTUC Income, which is competing with MNCs such as AIA, Prudential and the likes.
I salute the way you apply out of the box thinking method on motor insurance as well as agents' renumeration. The thinking behind is to offer the best value to consumers at the lowest possible price, which can only be made possible with a lowest viable cost structure.
I feel that the ST Saturday's report did not provide a balance enough coverage of the merits and demerits of your policies. I do not think they have gathered sufficient facts and figure to give a fair comment on such policies.
Nevertheless, I trust that Singaporeans are smart enough to see that. So no worries.
WL
I urge you to retire
I RECEIVED THIS E-MAIL FROM HONG XIANSHENG
Tan Kin Lian,
"I am very sad at the inconsiderate behaviour of the Straits Times. They are willing to advance their own agenda, without regard to the harmful impact on other people." This is your comments about the ST having ignored your request to publish your departure from income, you are not happy about it.
I think you deserve it because as the CEO of Income, your stubborn behaviours also created many dissatisfactions among your subordinates, colleages, agents and business associates as reported in the ST times, therefore ended up that you have to leave Income, you said you planned to work till age of 70, however, I urge you to go retire, don't think that any one likes to work with you. Less people will suffer. "
Tan Kin Lian,
"I am very sad at the inconsiderate behaviour of the Straits Times. They are willing to advance their own agenda, without regard to the harmful impact on other people." This is your comments about the ST having ignored your request to publish your departure from income, you are not happy about it.
I think you deserve it because as the CEO of Income, your stubborn behaviours also created many dissatisfactions among your subordinates, colleages, agents and business associates as reported in the ST times, therefore ended up that you have to leave Income, you said you planned to work till age of 70, however, I urge you to go retire, don't think that any one likes to work with you. Less people will suffer. "
Air flight to Manchester
I took the Singapore Airlines plane to Manchester on Saturday night. Two stewards recognised me. They came to check and talk to me. They wanted to confirm that I was the person that appeared in the front page of the Straits Times and Sunday Times.
Copies of the papers were distributed to all passengers.
We had a nice chat. I introduced them to Logic9 and taught them how to play the game. I left the pocketbook with them as a souvenir.
Copies of the papers were distributed to all passengers.
We had a nice chat. I introduced them to Logic9 and taught them how to play the game. I left the pocketbook with them as a souvenir.
Why the English love tea
I am now in Manchester. Due to low humidity, my throat is dry. So, I need a drink of tea.
Saturday, September 23, 2006
My future plans
I will leave the services of NTUC Income on 1 April 2007. By then, I shall be 59 years old.
I intend to work actively for another 11 years, until I am 70. My key priorities during the first two years will be:
- build the technology and business platform for the "insurance company of the future"
- provide management consultancy on business strategy, marketing, human resource, customer service and operational excellence
- give lectures, talks and training
I also intend to set up a company to promote Logic9, BEST simulation game and language training. This will allow the colleagues to own and build the business.
More details will be provided over the next few weeks.
I intend to work actively for another 11 years, until I am 70. My key priorities during the first two years will be:
- build the technology and business platform for the "insurance company of the future"
- provide management consultancy on business strategy, marketing, human resource, customer service and operational excellence
- give lectures, talks and training
I also intend to set up a company to promote Logic9, BEST simulation game and language training. This will allow the colleagues to own and build the business.
More details will be provided over the next few weeks.
I ignore gossip
Terence: On a personal note, there are gossips about you over the years. How would you handle these kinds of stuff?
TKL: I ignore gossips.
Terence: Good for you that you ignore them as gossips comes from both internal and
external. I think the best is hear from the horse's mouth. I shall not quote those gossips to you - since you are ignoring them.
TKL: I ignore gossips.
Terence: Good for you that you ignore them as gossips comes from both internal and
external. I think the best is hear from the horse's mouth. I shall not quote those gossips to you - since you are ignoring them.
A sudden announcement
My earlier plan was to announce my departure from NTUC Income on 5 October (Income Day). This will allow some time for some of the details to be finalised.
The Straits Times heard about about the "rumour". They insisted on writing the story. I requested them to wait for a few days for the media release.
When I learned that the Straits Times insist on carrying the story, I had to get my chairman to agree to issue the media release earlier.
I had also to inform my colleagues about the announcement, so that they do not hear about it from the papers. This has to be done at midnight.
I am very sad at the inconsiderate behaviour of the Straits Times. They are willing to advance their own agenda, without regard to the harmful impact on other people.
In my dealing with other papers, including the foreign media, I generally find that they are more considerate.
The Straits Times heard about about the "rumour". They insisted on writing the story. I requested them to wait for a few days for the media release.
When I learned that the Straits Times insist on carrying the story, I had to get my chairman to agree to issue the media release earlier.
I had also to inform my colleagues about the announcement, so that they do not hear about it from the papers. This has to be done at midnight.
I am very sad at the inconsiderate behaviour of the Straits Times. They are willing to advance their own agenda, without regard to the harmful impact on other people.
In my dealing with other papers, including the foreign media, I generally find that they are more considerate.
Please don't go
MESSAGE FROM A FORMER EMPLOYEE OF NTUC INCOME
I read from the newspapers that you are leaving Income?
This company was single-handedly run by you since our days in the early 1980s. I feel it a pity that you are leaving the company.
Just read your blog - especially on that Stanley Jermiah's leaving the company.
Now that he has left Income, don't you think that you ought to stay behind and
steer the company? Any impact on the policyholders' confidence if there is no
main driver at the driver's seat?
Terence
-----------------------
Dear Terence,
The next CEO will be a younger, capable person who can take NTUC Income towards the next important stage in the career.
I am confident that NTUC Income will continue to do well in the future. There are many dedicated, capable, colleagues in NTUC Income who will continue to look after the best interest of our policyholders.
We have appointed another capable person to head the life insurance department. He is a qualified actuary with many years of senior management experience. The media release on his appointment was sent out a few days earlier. It is now posted in my blog.
Tan Kin Lian
I read from the newspapers that you are leaving Income?
This company was single-handedly run by you since our days in the early 1980s. I feel it a pity that you are leaving the company.
Just read your blog - especially on that Stanley Jermiah's leaving the company.
Now that he has left Income, don't you think that you ought to stay behind and
steer the company? Any impact on the policyholders' confidence if there is no
main driver at the driver's seat?
Terence
-----------------------
Dear Terence,
The next CEO will be a younger, capable person who can take NTUC Income towards the next important stage in the career.
I am confident that NTUC Income will continue to do well in the future. There are many dedicated, capable, colleagues in NTUC Income who will continue to look after the best interest of our policyholders.
We have appointed another capable person to head the life insurance department. He is a qualified actuary with many years of senior management experience. The media release on his appointment was sent out a few days earlier. It is now posted in my blog.
Tan Kin Lian
Media Release: Chief Executive Officer
NTUC Income wishes to announce that its CEO, Mr Tan Kin Lian, will be leaving the Cooperative on 1 April 2007 to pursue other interests. The Board of NTUC Income accepts his departure with regret.
Mr Tan, who joined NTUC Income on 1 April 1977 as its General Manager, would have completed 30 years of service on 1 April 2007.
During the past 30 years, Mr Tan has built a strong financial foundation for the Cooperative. From an asset base of $40 million in 1977, the Cooperative now has total assets exceeding $17 billion and annual premiums exceeding $2 billion. NTUC Income, rated "AA" by Standard & Poor's, is the highest rated insurance company from Asia.
The Board will be commencing a search for a new chief executive.
Mr Tan said, "It has been a great privilege for me to work in NTUC Income for the past 30 years. Time has passed so quickly. I enjoy working with many wonderful colleagues who shared the same passion and dedication to build a strong organisation that is dedicated to serve the interest of our 1,800,000 policyholders. I am confident that under a new leadership, my colleagues will be able to take NTUC Income through the next important stage of its development. I wish them well."
Mr Ng Kee Choe, Chairman of NTUC Income said, "Kin Lian has led the Cooperative well and built it to what it is today, the largest composite insurance company in Singapore. Members of the Board and I wish him well and every success in his future endeavours."
Karen Ng
Head (Media Relations)
NTUC Income
DID: 6877 3492
Hp : 9619 0912
Mr Tan, who joined NTUC Income on 1 April 1977 as its General Manager, would have completed 30 years of service on 1 April 2007.
During the past 30 years, Mr Tan has built a strong financial foundation for the Cooperative. From an asset base of $40 million in 1977, the Cooperative now has total assets exceeding $17 billion and annual premiums exceeding $2 billion. NTUC Income, rated "AA" by Standard & Poor's, is the highest rated insurance company from Asia.
The Board will be commencing a search for a new chief executive.
Mr Tan said, "It has been a great privilege for me to work in NTUC Income for the past 30 years. Time has passed so quickly. I enjoy working with many wonderful colleagues who shared the same passion and dedication to build a strong organisation that is dedicated to serve the interest of our 1,800,000 policyholders. I am confident that under a new leadership, my colleagues will be able to take NTUC Income through the next important stage of its development. I wish them well."
Mr Ng Kee Choe, Chairman of NTUC Income said, "Kin Lian has led the Cooperative well and built it to what it is today, the largest composite insurance company in Singapore. Members of the Board and I wish him well and every success in his future endeavours."
Karen Ng
Head (Media Relations)
NTUC Income
DID: 6877 3492
Hp : 9619 0912
Pursue other interest
I will be leaving NTUC Income from 1 April 2007 to pursue other interest. By that time, I will have completed 30 years of service.
This will allow the board to find a new chief executive officer to take NTUC Income through the next important stage of its development.
I am confident that NTUC Income will continue to do well in the future. I have many dedicated, capable, younger colleagues in NTUC Income who will continue to look after the best interest of our policyholders.
I shall be pursuing other interest.
If you have any questions, send them to tankl@income.com.sg. I shall be answering these questions in my blog. Get your friends to read the blog.
This will allow the board to find a new chief executive officer to take NTUC Income through the next important stage of its development.
I am confident that NTUC Income will continue to do well in the future. I have many dedicated, capable, younger colleagues in NTUC Income who will continue to look after the best interest of our policyholders.
I shall be pursuing other interest.
If you have any questions, send them to tankl@income.com.sg. I shall be answering these questions in my blog. Get your friends to read the blog.
Friday, September 22, 2006
Faster settlement of Incomeshield claims
In June 2006, there was a backlog of Incomeshield claims. It took an average of 28 days to clear the claims in Income (compared to a service target of 7 days).
The delay were due to two factors:
- increase in volume of claims
- migrating to a new computer system
The following measures were implemented and they have contributed in speeding up the processing of the claims. We carried a once-off exercies in August to clear off the outstanding claims held back from earlier months.
The average number of days has reduced as follows:
July : 24 days
August : 20 days
September: 12 days
We expect to reach our service target of 7 days in October.
William Fong
Head, Group & Health Dept
The delay were due to two factors:
- increase in volume of claims
- migrating to a new computer system
The following measures were implemented and they have contributed in speeding up the processing of the claims. We carried a once-off exercies in August to clear off the outstanding claims held back from earlier months.
The average number of days has reduced as follows:
July : 24 days
August : 20 days
September: 12 days
We expect to reach our service target of 7 days in October.
William Fong
Head, Group & Health Dept
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