Saturday, September 16, 2006

Income policyholder forced to switch to another insurer



I wish to register my observation on some industry practice in the field of insurance.

The recent purchase of my Honda Odyssey from Kah Motor in March this year came with several perks and discounts.

During the purchase, I was given the understanding that most of the financial benefits from the purchase "price package" are tied up with my signing up with AXA on car insurance.

After unsuccessfully negotiating to stay with Income on car insurance, I proceeded with the deal knowing fully that I would be able to switch back to Income after the deal had gone through, with the same NCD benefits intact.

I wish to express disagreement with such industry practice as it does not allow customers a "real" free choice. Such arrangements made between car distributors and Insurance companies concerned literally armtwist customers into signing up with insurance company not of their choice. And in the process, benefits and favoured services may be lost and unrecoverable.

Having stayed with Income for many years on different forms of insurance, it is perhaps most apt at this point in time, that I thank Income's various departments and agents for excellent services rendered, especially during my car's recent encounter with accident and repair, of which much stress was spared.

Please forward my view and appreciation to the departments and personnel concerned.

Thursday, September 14, 2006

FAQ: Making a motor insurance claim

1. Introduction

If you wish to make a claim against NTUC Income for the repair of your vehicle (whether you are claiming under your insurance or as a third party claim), please follow these guidelines.

We undertake to handle your claim promptly, fairly and conveniently, and to repair your vehicle to a satisfactory condition (ie at least to the same condition before the accident).

If you help us to reduce the claim cost (and still maintain a satisfactory standard of repair), we will be able to keep the premium rate at a low level, for the benefit of all policyholders.

2. Idac center

You should send your vehicle for the damages to be assessed at an Idac center. There are 13 centers located around Singapore. You can call Tel : 6788-6616 to find the location of the most convenient center.

The assessment should take about 20 minutes.

You have the following options for the repair of your vehicle:

- leave it at Idac center for us to arrange the repairs
- allow us to benchmark the repair cost, accept a cash settlement and find your own repairer
- choose your own repairer and have the repairer to negotiate the repair price with us

3. Option 1: Allow us to arrange the repair

Most claimants find it convenient to leave their vehicle at the Idac center for us to arrange the repairs.

We invite about 30 quality workshops to tender for the repair. They are required to observe our repair standard.

- carry out the repair to a satisfatory standard (ie at least to the same condition before the accident)
- use new parts for cars less than 3 years old, use suitable parts for cars more than 3 years old
- provide 6 months warranty on the repair
- pass the post-repair inspection (carried out by us, on your behalf)

The tender is usually awarded within two days of the reporting, and the repair completed within another four days. We will notify you, if the repair takes longer, due to the extensive damage,

We handle an average of 40 repairs daily. We carry out a survey of all claimants about the repair. We achieved a high satisfaction score. Over 96% of the claimants are satisfied with this arrangement and the quality of the repair.

4. Option 2: Accept a cash settlement

If the damages are minor, we are prepared to offer you a cash settlement and allow you to find your own repairer. This is based on our estimate of the repair cost and is usually slightly more than the price charged by our quality workshop.

You will usually be able to find a repairer who is willing to carry out the repair at a lower price. You can keep the difference.

Most claimants find it more convenient for us to arrange the repair (ie option 1 above).

5. Option 3: Get your repairer to negotiate with us

You can choose your own repairer and ask them to negotiate the repair price with us. We will offer a fair repair price, based on our estimate. This is usually slightly more than the price charged by our quality workshop.

If your repairer insist on a much higher price, the repair may be delayed. You should find a repairer that is willing to compromise with us, so that the claim can be settled earlier.

In practice, most claimants find this option to be the most difficult. We also find it to be the most troublesome to settle.

6. What party is liable for the accident?

The party deemed to be liable for the accident is determined according to a "barometer of liability" as agreed by the insurance companies (ie BOLA).

Preferably, all parties to the accident should sign the Singapore Accident Statement form (provided to all motorists) at the spot of the accident. This helps to determine the liability.

If you are liable for the accident, you will lose your No Claim Discount (NCD) partially or fully on the next renewal of your insurance.

If you are not liable (ie less than 20% according to BOLA), your will continue to enjoy an increase in your NCD, even if you make a "own" claim against us under your insurance policy.

If you are not insured with us, and you wish to make a third party claim against us, we will acept your claim only if our insured is liable for the accident (ie more than 20% according to BOLA).

Our claim officer will call you to give our assessment of liability within 2 days of the report at Idac, if all parties have submitted their report. We will make a fair assessment based on the facts of the accident. We hope that all parties will accept it.

If you disagree with the assessment, your case will be sent for a review by a more senior officer. The officer will contact you within 2 days.

7. Can I get a courtesy car to use?

If you are insured under our Quality Plus plan or you are not liable for the accident (ie less than 20% according to BOLA), you are entitled to the use of a courtesy car.

If we are not able to find a suitable courtesy car for your use, we will pay a cash allowance of $50 a day. This will apply from the date of the accident.

If you are not entitled to the courtesy car, you can rent it from us (subject to availabiity) at a special price of $65 a day.

8. Will you inform me about the status of the repair or claim?

We will notify you by SMS about the status of your repair as follows:

- the repairer who is assigned to carry out the repair
- the expected completion date
- any unexpected delay or problem.

For other types of claims, we will notify you by SMS or telephone, if there is a significant development, or if there has been no development for 4 or 14 days. We wish to settle the claim as early as possible, for the satisfaction of all parties.

9. Repair at distributor workshop

We will arrange for you car to be repaired at the distributor's workshop, if the repair requires proprietary equipment or technology or affects the integrity of the car.

In other cases, we will arrange for the repair to be done at our quality workshop. We will take over the warranty of the car (for the remaining period), if the warranty is voided by the distributor due to our repair. In practice, this situation has never occured.

If you prefer to have the repair done at the distributor workshop, you can opt for the cash settlement.

10. Injury

If any party is injured in an accident, please get the injured party to call our claim service center ( Tel:6877-3199 ). We will assist the claimant to get fair compensation.

11. Feedback

If you find that your claim has not been handled satisfactorily, according to this service standard, you should provide your feedback to the claim officer who is assigned to handle your claim. The mobilephone of this claim officer will be given to you immediately after your claim has been lodged.

If you are not satisfied with the handling of your claim by this assigned claim officer, you can give your feedback to our service quality officer ( Tel: 6877-3472 ).

Reply to St Times: Resignation of Stanley Jeremiah

14 September 2006

Forum Page
Straits Times

I refer to your article entitled "Income's GM quits amid talk of tension with chief executive" (St Times, 12 Sep 2006).

The media release was prepared jointly by me and Stanley Jeremiah. Both parties had the opportunity to state our perspective of the important points relating to this event. It highlighted Mr Jeremiah's key contribution during the past eight months.

You have quoted two specific instances of a possible clash of views between Mr Jeremiah and me:

- feasibility of a new product suggested by Mr Jeremiah
- remuneration of agents and financial advisers

I wish to state the facts on these issues.

Mr Jeremiah did suggested a new term insurance product that has a wider definition of the permanent disability benefit. My concern was that the wider cover could cause confusion with the existing definition that was already applied to nearly 1 million policies issued previously. As this matter was not critical, we mutually agreed to shelve this proposed change.

NTUC Income has been paying a lower scale of commission (compared to the market) to our agents and insurance advisers for the past 36 years. This has allowed us to lower our premium rates and give better value to our policyholders. Our agents benefit from an increased volume of sales generated by our competitive products.

I confirm that Mr Jeremiah has not made any request to change our commission rates (except for a new term insurance product). If he did, it would still need to get the support of our appointed actuary and the general manager in charge of our sales. It would also require a re-pricing of our existing products to reflect the higher cost.

We have had some differences of views on a few issues, but these do not amount to a "clash". We bring out the facts and discuss the options. We try to narrow the diffences and come to a common position. We approach it in an open and transparent way.

We did also agree on many other issues.

I am sorry to lose the services of Mr Jeremiah, as I believe that he has qualities that are suitable for NTUC Income. I respect his wishes to seek a future career that is more compatible with his strengths and interest.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Car dealers should give consumers more choice

14 September 2006

Straits Times Online Forum

I refer to the letter from Balajee Shrikanth entitled "Car dealers should give customers more choices on insurance and loans" (12

I hope that Balajee Shrikanth will take this matter up with the Consumer Association or the government agency that is responsible to implement the Competition Act. It is in the public interest that the consumer should be given more choices and not be locked into tied arrangements.

Balajee Shrikanth has suggested that NTUC Income should re-look at our car repair policy and be willing to work with the distributors.

We have been and remain willing to work with the car distributors in a fair and transparent manner, in the interest of the consumers.

- for repairs that require the use of proprietary equipment and technology or affect the integrity and safely of the vehicle, we use the distributor workshops for the repair and pay their repair charges (which tend to be quite costly).

- for other repairs which can be done at our quality workshop, we are willing to pay up to 50% more to the distributor workshop (ie to recognise their higher overheads).

Some of the distributors find our proposal to be fair and work with us. We hope that the other distributors will also work with us.

I also hope that consumers realise that NTUC Income is encouraging competition and fair dealing in this market. This is being done in the interest of all consumers. We need more consumers to come forward and help us achieve our common goal.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Did AXA quoted the correct motor premium rate?

There was an article in the Sunday Times of 3 September from Leong Chan Teik showing the lowest premium rates quoted by AXA Insurance and by NTUC Income. They are based on the figures provided by both companies.

Most of the rates under AXA appeared to be quite low.

My colleage called the hotline in AXA Insurance and asked for a quote for a similar profile of driver and vehicle (Ford Escort 1.3) reported in the article.

The article quoted a premium of $367. The hotline quoted a premium of $449 (ie 18% higher).

When asked about why the Sunday Times article showed a lower figure, the hotline staff said:

- don't know who provided the quote to the newspaper and the assumptions used
- the article was a rough guide
- we cannot believe newspaper articles
- there may be other factors used (not mentioned in the article)

I asked my colleague to write to the Sunday Times journalist.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Wednesday, September 13, 2006

Magnet Train in Shanghai

I took the magnet train (MagLev) from Shanghai city to the airport in Pudong. It travelled at a speed of 430 kph. Wow!

The train journey took 7 mins. It is 4 times of the speed of ordinary train. It is really, really fast.

There will soon be a train from Guangzhou to Shanghai. It will take less than 1 hour. Previously, it took more than 4 hours.

Wow! China is really developing in an impressive way.

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