We give 26% discount for off-peak car

Editor
Forum page
Straits Times

Insurance premiums for off-peak cars are too high. Time to lower them

I refer to the letter written by Mr Winston Ng, "Insurance premiums for off-peak cars are too high..." (St Times Online, 19 Nov 2005).

Mr Ng felt that insurance premiums for off-peak are cars too high. He said that these cars spend less time on the road, contribute to less accidents and should enjoy a lower rate of premium.

We agree. In fact, NTUC Income now offers a discount of 26% to off-peak car owners.

NTUC Income insures nearly 40% of all cars in Singapore. We are able to use our large base of insured vehicles to calculate a fair premium rate for each category of risks, based on their actual claim experience. Our discount for off-peak cars is based on the actual claim experience for this category.

NTUC Income now insures 5,300 off-peak cars. This represents about 50% of the 11,000 off-peak cars in Singapore.

We are able to offer competitive premium rates because of our pro-active management of claims and satisfactory service. Generally, our premiums are about 10% lower than the market. The additional discount of 26% for off-peak cars make us even more attractive to this class of owners.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Your comments are now welcomed

I now allow visitors to posting comments into my blog. You can also give feedback directly to me at tankl@income.com.sg.

I have found a way to stop spamming by using the "comment moderation" feature of this blog.

Tan Kin Lian

How NTUC Income reduce our repair cost

Editor
Forum Page
Straits Times

I refer to the letter from Sam Yeow entitled "It cost more to use insurer's outlet" (St Times, 19 Nov 2005).

Mr Yeow said that insurers who insist that repairs be done at their authorised workshop may pay more for their repair. He quoted his own case, where he could arrange his own repair for $300, but his insurer eventually paid $3,580 for the same repair done at its authorised workshop.

I agree with Mr Yeow. This is a common situation and result in higher repair cost and higher premiums.

NTUC Income does not use the method described by Mr Yeow. We adopt a multi-faced approach to reduce the repair cost, as follows:

- If the damages are slight, we encourage our policyholder to pay for his own repair, and protect the No Claim Discount. The saving in premium, due to the discount, can be more than the repair cost.

- Alternatively, we are willing to offer a cash settlement for the policyholder to arrange his own repair. The policyholder can find a workshop to repair for less, and keep the difference.

- If we have to pay for the repairs, we will invite our quality workshops to tender for the repair, and observe our quality standard. In this situation, the workshop will not submit an inflated bill as the repair will not be awarded to them.

We have implemented the above approach quite successfully over the past few years. This has allowed us to reduce our repair cost and offer competitive premiums to our policyholders. Our premiums are about 10 percent lower than the market.

Tan Kin Lian
Chief Executive Officer
NTUC Income

NTUC Income has the best call center in Singapore

NTUC Income has the best call center in Singapore.

On 18 Novemeber, we received the award of the best call center in Singapore. We won against the call centers operated by the telephone companies, banks and other large organisations.

Our subsidary, Call Center One (which offers outsourced call center service to other business organisations) also received the top award in its category.

Why?

If you call our hotline 6788 6616 at any time (24 hours X 7 days), you are answered promptly by a human voice. You do not have to wait or interact with a voice recording machine.

You get personal attention immediately.

And there are many other reasons!

Motor premium does not depend on value of car

ISSUE:

A motor policyholder asked why his renewal premium was not reduced according to the depreciation in value of his car. He cited that other insurance companies also practice the same thing.

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MY REPLY:

You have taken the right approach, which is to find out the most competitive premium rates from a few insurers.

Each insurer will have to decide on what is its appropriate premium rate, taking the relevant factors into account. I hope that you find our premium rate to be competitive and our service to be satisfactory, and will renew with us.

We are not able to reduce the premium rate based on your argument. Please allow us to practice what is practical for us.

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POLICYHOLDER'S REPLY:

Dear Mr Tan,

Probably you're the only CEO of a prominent organisation who always pay attention to small issues. And easily accessible by common people like me. I appreciate that.

From your email, I have a perception that once a premium reach its lower threshold, then other factors outside the insured parameters (such as; insurer's operational and indemnity cost) will play a significant role.

Frankly speaking, I still found that NTUC Income i! s still the most competitive among those big players in motor insuranc e.

I did have good experience with Income in the past, no doubt about it.

NTUC Income gives a better return than other insurers

A policyholder was unhappy that his return was lower than the illustration made at the time that the policy was sold 15 years ago.

My manager gave her explanation (reply 1). I followed up with a further explanation (reply 2).

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REPLY 1 (FROM MANAGER)

You have bought our endowment policy in 1990. The illustrated maturity figure was based on the bonus rates at that time, and on the high return from our investments.

However, for years 1997, 2001 and 2002, we were forced to cut our bonus due to difficult market conditions. For 2003 and 2004, we have done better and have reflected this by restoring partially the bonus cuts in the earlier years. The bonus rates for Year 2004 is about 83% higher than for 2002.

Your policy matured this year. The average yield works out to be 5.91% per annum. This is considered very good. If you have set aside the same yearly amount with a bank over the same period, you would have received much lesser.

Our terminal bonus of 25% is a generous amount. Even in our bad years, we have dipped into our reserves to maintain this. We do so because we do not want policyholders with matured policies to forfeit this due to a few years of poor results.

We have given you a good and fair return on your insurance policy. You cannot compare this with equities. They are totally different classes of products.

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REPLY 2 (FROM CEO)

I confirm that you have obtained a fairly attractive return. If you have insured with another insurance company, your return would have been much lower.

My manager will send you a letter written by another policyholder, printed in the Straits Times, where she complained about the poor return from another insurance company. She said that the return from NTUC Income was much better.

I hope that you will, after reading this letter, send us your appreciation for the good return that we have given to you, during the past years, when the investment climate has been quite difficult.

If NTUC Income is not a cooperative, will it behave differently?

A visitor sent the following questions to me, about cooperatives in Singapore. Here are the questions and my reply.

COMMENT BY VISITOR

Visited your blog earlier and indeed the commentaries there have been very informative. I’m not sure it is appropriate to ask you to comment on co-operatives in Singapore (NTUC Income, I believe, is the largest). But I would be grateful if you could share your enlightened views on

A) The general status of cooperatives in Singapore:

Reply: A few cooperatives have large operations and are doing well in Singapore.

For example, NTUC Fairprice runs a large and successful chain of supermarkets. They commend a large market share and are able to bring the prices down for consumers.

NTUC Income runs a large insurance operation and serves 2 million people. With our large market share, we are able to provide insurance coverage at low and affordable premium.

B) Would NTUC Income be significantly different if it were not constituted as a cooperative?

Reply: Yes, NTUC Income will be significantly different, if we were not constituted as a cooperative.

We would be charging higher premiums, to increase profit for shareholders. We would also find reasons to challenge claims and avoid paying them, also to increase profits. These are the reasons why I do not want NTUC Income to be profit driven.

C) How would you see cooperatives heading in the future (such as more cooperatives competing against each other)?

Reply: I wish to see more cooperatives making a big impact in the future. I hope that they will form a larger market share than today.

If more cooperatives are formed, there is the risk that they might compete against each other. This does not really matter.

In practice, they are likely to target different segments of members, so the risk of competition and conflict is small. Even if there is competition, the conflict should be minimal, as all cooperatives follow the same cooperative principles

A human voice answer your call

9 November 2005

Editor
Forum Page
Straits Times

I refer to the article "Readers air grouses with banks" (ST, 8 November 2005). Several of your readers expressed their unhappiness with automated telephone answering services from banks.

I wish to share our experience in operating our call center for the past 20 years.

NTUC Income is a large insurance cooperative serving 1.8 million policyholders. We handle an average of 300,000 inbound and outbound calls each month. Our call center operate 24 hour a day, seven days a week.

Over the years, we took a conscious decision not to place an answering system between our policyholders and our call center officers. We allow the policyholders to reach our officers directly and be served immediately, with minimal hassle. Callers are greeted warmly with a human voice instead of a recorded message.

Our policyholders can make enquiries or handle transactions through our call center. We have recently introduced separate hotline numbers so that our policyholders can be answered immediately in the language of their choice, namely English, Mandarin and Malay.

We are able to provide to achieve a high level of productivity of our call center officers through a good employee training and retention program. We introduced an escalation system that allows difficult issues to be escalated to the supervisors and experts. This reduce the stress on our call center officers and create a more conducive working environment. Our turnover rate is about half of the average for the call center industry.

We are able to provide friendly service at an economical cost, despite the higher wage level in Singapore. Our call centre operation is entirely based in Singapore. We believe that our policyholders will be better served by call center officers with local knowledge.

We strive for excellence in customer service and delight our customers with fast, effective and reliable service. We will be happy to share the experience of our call center with other business organisations and help to build a high standard of service quality in Singapore.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Fixed the price of land for the integrated resort

I agree with the decision of the government to fix the price of land for the integrated resort.

Here are my reasons:

- the government is in a better position to determine what is the fair market value for the land.

- it avoids excessive speculation on the price of land

- the choice of the winner will be based on the design concept and other factors.

I hope that this principle will apply to other areas of pricing, including:

- certificate (COE) for ownership of vehicles

- land for public and private housing

Four decades ago, the government fixed the price of HDB flats and shops. This allowed the services to be provided at a low cost and keep the cost of living low. This was a period when the Singapore economy grew well.

When the government decided to let the market forces determine the prices, it caused the prices to escalate (due mainly to excessive speculation). This has resulted in a high cost of living in Singapore.

We can move back to the good old days where the prices are determined by the government (with access to professional valuers). This approach can allow the prices that reflect the market, but avoid excessive speculation.

Tan Kin Lian
(in my personal capacity)

MHS (managed care) policyholder ask for clarification

FROM MHS POLICYHOLDER

Thank you very much, Mr Tan, for your time and advice. Really appreciate the fact that as CEO, you take the trouble to address my concerns.

---------------------------------------------------------------

PREVIOUS ENQUIRY:

I'm however confused about the recent policy changes with regards to Medishield and my current status. I was not under medishield after I retired because I continued with MHS.

1) Is the MHS considered an enhanced plan or a Medisave-approved private integrated plan? If so, am I automatically also covered under medishield, in addition to my MHS? Does that mean, I now have a basic medishield plus MHS?

Reply: You only have MHS. You have the option from NTUC Income to move to Incomeshield at any time in the future. You are NOT covered under Medishield - as you have been excluded from it. With MHS, you already get more coverage than Medishield, so there is no need for you to buy Medishield and waste money.

2) If I am now only covered under MHS, is it advisible to opt in for the basic medishield ( I understand that the govt is encouraging us to do so). Or am I by default opted in already after the new policy change?!

Reply: Yes, if you wish to give up MHS (due to its high cost), you can opt for Incomeshield (and not basic Medishield). Incomeshield covers everything that Medishield covers and more than that. What the government has done is to require the insurer to "re-insure a portion of their shield back to CPF". This is a matter to be sorted out between us and CPF and should not concern you.

2) Yes, I agree with you that the premium is rather high for MHS for a retiree like myself. For this reason, can't I use Mesisave to pay for thepremium? With the liberaliation and privatisation of Medishield plans, it is a step backward (and frustrating) to realise that I cannot utilise my own funds to protect myself during the time I need it most.

Reply: You can use Medisave to pay for Incomeshield, but not MHS (from 2007). This is the decision of the government. They have their reason. Let us accept it.

Reverse Mortgage for retirees

QUESTION FROM JOURNALIST"

Dear Mr Tan,

I am writing a feature article on home equity. 47 per cent of total assets in the household sector are invested in residential properties.

1) Can you tell me more about Income's proposal for a reverse mortage plan that will suit HDB flat owners?

2) What are the main obstacles to Singaporeans monetising their assets, namely their HDB flats? What would you say are the best ways to overcome these obstacles?

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REPLY:

At present, HDB does not allow its flats to be used for reverse mortgage. This is the main obstacle. If HDB relax on this rule, some owners may wish to use their HDB flat to get a reverse mortgage.

You have to ask HDB for their reason to impose this rule. It has been the rule for many years. HDB is not prepared to relax this rule up to now.

If HDB relax its rule, the financier will still have to address the following obstalces:

- how much should be granted as a monthly income?
- what interest rate to charge?
- how long to grant the loan?
- what happens when the property value drops below the borrowings plus interest?
- should the scheme be insured, ie guarantee payment of the income for the lifetime of the mortgagee?
- who owns the residential interest in the property at the time of death of the mortgagee?

The reverse mortgage offered by NTUC Income is an "uninsured" mortgage. It works as follows:

- we agree on a monthly payment to the mortgagee
- interest is charged at the current rate (around 4-5% per annum)
- so long as the total borrowings, with interest, does not exceed 80% of the value of the property (ie the 20% is to be a buffer), we will contiue the arrangement
- when the total borrowings reach 80% of the value of the property, we ask the mortgagee to make other arrangements, eg to sell the property and repay the loan
- if a small amount is taken out monthly, the arrangement is likely to continue for 20 years or longer
- when they sell the property, they repay the loan and keep the balance.
- if they die, the property is sold, and the balance of the property, after repaying the loan and interest, will go back to the estate.

In practice, we believe that many mortgagees are likely to sell their property after 5 or 10 years and to repay their loan. They can find another place to stay, eg rent a flat, stay with their children, or stay in a home for the elderly.

We also give an option for the mortgagee to allow a family member, eg son or daughter, to take over the property and the loan.

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Here are some examples of the amount that can be drawn down:

- Non-insured, fixed period loan (20 years)
- All flat owners (fully paid up) over age 70 are eligible
- Interest rate 5% fixed
- Sample monthly drawdown amount (0.2% of initial property value)

Flat type   Property       Monthly     
            Value           Drawdown
   
3-room      $160,000       $320   
4-room      $240,000       $480   
5-room      $320,000       $640    
Exec Apt    $480,000       $960   

- Borrowers can continue to stay in flat
- Early repayment and downgranding to smaller flat allowed (repay loan)

Direct Discount for Motor Insurance

FROM STRAITS TIMES JOURANALIST:

QUESTION:

I understand Income is offering 5-10% loyalty discounts, as well as 10% discount if customers come direct to you (bypassing broker).

How has the promotion been in terms of success so far? What is your exact market share this year, compared with last year?

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REPLY:

We offer a discount of 10% for a motorist who register with us and take the motor insurance directly with us, i.e they do not go through an insurance agent.

This direct discount of 10% incorporates the loyalty discount of 5% or 10%. The "direct" motorist receive a total discount of 10%, inclusive of the loyalty discount of 5% which is given to a motorist who stays with us for 3 years and 10% for 7 years or longer.

We have received extremely good response for the direct channel.

The number of direct motorists increased from 15,200 at the beginning of 2005 to 21,800 now. It now represents 14% of all motor cars insured with us. The other 86% are brought in by our insurance agents.

Earlier this year, an average of 300 cars insured directly each month. After the introduction of the 10% discount, the number than insure directly has increased by more than 3 times. In September, 1,100 motorists insure their cars directly with us.

We also offer the same 10% discount for motor cycles and commercial vehicles that insure directly. They also received good response. I do not have the figures for these two category of vehicles that are insured directly with us.

We believe that more motorists will choose to insure directly with us in the future. We have a network of seven branches located all over Singapore. They can also call us directly over the telephone. We will arrange for the policy document to be sent to their home for a small administration fee of $5.

The 10% discount represents an average saving of $80, based on an average premium of $800 for a motor car. If the premium is higher, the saving is more substantial.

Our market share of motor insurance has dropped from 42% last year to 39% now. This drop of 3% is contributed by the following factors:

- a few insurers have aggressively reduced their premium rates to match or go below our competitive rates.

- many people are scrapped their old cars to buy new cars this year due to the low COE. They are compelled to insure with another insurer through a tied arrangement with the distributors for the first year.

- some insurance agents diverted the motor insurance to other insurers, as they are unhappy with our direct channel.

We are confident that our market share will increase next year for the following reasons:

- many motorists who bought new cars will come to us when they renew their insurance on the second year

- our competitors will not be able to sustain the low premium rates, as they have not been able to manage their repair cost effectively.

- more people will come to us to enjoy the 10% discount

Our special discount of 10% for motorists who insure directly will apply up to the end of this year only. We may reduce the direct discount to 5% from next year.

To enjoy this 10% discount, the motorists can call our hotline now, and register with us before th end of this year.

Tan Kin Lian
CEO, NTUC Income

MHS provides better coverage than Medishield

QUESTION FROM A POLICYHOLDER

Dear Mr. Tan,

I'm 65 this year and presently insured under the HMS. Recently, there are some drastic changes in the Medishield polcies.

My understanding is that I am not protected under the Medishied because of MHS. That was before the changes.

As of Jul 2005, private insurers have launched their medical insurance plans as enhancement plans to the reformed MediShield. Does that mean I will automatically become a medishield policyholder and enjoy the benefits on top of MHS?

If I'm presently only with MHS, am I taking a great risk not opting for Medishield? Or should I sign up for incomeshield and MHS to be safe? But that would be a burden financially because I'm retired.

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REPLY

Dear

You do not need to be worried.

The MHS provides a more comprehensive coverage compared to Medishield. It covers medical treatment at the GP, specialist and hospital. It has a co-payment of only 10% and pays from the first dollar (ie no deductible). So a higher percentage of the hospital bill is covered under MHS.

The only disadvantage of MHS is that it can be quite costly when you get older. If you find the premium to be too expensive, you can opt to be converted to Incomeshield, which covers hospital treatment, and is subject to a deductible and co-payment of 15%. This coverage is still better than Medishield.

You do not need to be worried about your coverage, as it is much better than Medishield.

Tan Kin Lian
CEO, NTUC Income

Investing the annuity pool

Dear Mr. Tan,

I think it is great that you make such an effort to communicate with your customers and potential customers. I have just been reading your blog...

I understand that the money for a particular annuity series is put into an insurance pool, which is then invested. What I'd like to do is to understand the nature of the investments.

QUESTIONS:

1. Do you buy and hold bonds in your investment pool? What kinds? If so, what is the duration of the portfolio generally (i.e. just to get an idea of how
often the bonds turnover)?

Reply: we invest about 65% in bond and fixed income investment, and 35% in equity and property investments. The duration of the bond is between 3 to 7 years. We like to have longer duration. We tend to keep the bond for the longer term, and avoid active trading.

2. If there is a general shift in interest rates, how long before this
rise shows up in returns (bonuses) to policy holders?

Reply: If there is a shift in interest rate, we expect to see a higher yield on the reinvestment of our bonds. If there is an increase in interest rate, we expect the yield to increase gradually over the next few years.

3. I understand that there may be an upfront load/fee. What are the recurring ones? i.e. your cut of the returns from the investments.

Reply: Our expense of investment is about 0.5%. This is a reduction from the gross yield.

4. How often do you start a new series on average?

Reply: We introduced a new series due to the severe drop in interest rate. Our current series of annuity is priced at 2.5% per annum.We expect to keep this series for several years. If we earn a higher return, we will pay a higher bonus.

Are you getting better repair when you pay more?

ADVICE TO MOTORISTS

Some owners insist on getting their cars repaired by the distributor's workshop. They think that the quality of repair is better.

On average, the distributor's workshop charged 2 times of the price of repairs carried outside.

We investigated on how several distributors carry out the repair. Do they provide better quality?

Our finding? Many of the distributors outsource the repairs to external independent workshops. They charge the full price for the parts and add 35% on the bill of the external workshops.

If you (the owner) go to the external workshop directly, you can get a discount on the genuine parts and pay the market rate. You get the same quality of repair.

So, if you are paying for the servicing and repair of your car, you do not need to go to the distributor and pay so much more.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Only 1% of repair affect the engine

We carried out a detailed analysis of 200 motor repairs arranged by us during a week.

Only 1% of the repairs affect the engine. Under our repair practice, we send these cases to the distributor as it involves the use of specialised equipment, that are available from the distributor.

5% of the repairs require "mounting of the engine" but not repair to the engine. This means that the engine has to be removed to allow repairs to be done to other damaged parts, and mounted back. This can be done by external workshop without any risk at all.

The remaining 95% do not affect the engine or mounting of the engine. They are usually on minor dents and replacement of exterior parts of the vehicle. They can be done by external workshops quite easily. Many of the people working in these external workshops had their experience working for the distributors previously.

Conclusion? You only need to pay a high price for 1% of repairs that has to be done by the distributor. For 99% of cases, you can go to an external workshop and enjoy up to 50% saving and get satisfactory quality of repair.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Consumer should also act responsibly and fairly

24 October 2005

Editor
Online Forum
Straits Times

I refer to the letter from Lai Chong Seng entitled "Consumer protection law should also cover financial services" (ST Online, 21 Oct 2005).

NTUC Income supports the proposal to extend the consumer protection law to cover financial services.

We believe in offering products that are fair to consumers. We are a cooperative society and do not intend to make profit at the expense of our policyholders. We distribute most of our annual surplus to our policyholders, and distribute them fairly.

We believe that the law should also encourage consumers to act responsibly and not pursue their self-interest at the expense of business organisations.

I now wish to address the issues raised by Lai Chong Seng.

We have always made in clear in our communciation that non-guaranteed bonus could mean zero bonus in some bad years. In illustrating our bonus, we act responsibly in estimating the likely investment income in the future. Our illustration in 1996 reflect the global economic situation at that time.

Subsequently, the global economy went through several years of low interest rate environment. This has reduced the return on investments. Mr Lai was protected by the high guaranteed rate of return on his annuity. He has benefitted from his annuity contract.

It was made clear in our policy contract that the bonus is declared by the appointed actuary. In doing his work, the actuary has the duty to be look after the solvency of the insurance fund and the long term interest of all policyholders.

Each year, the actuary recommends to the board of directors on the rates of bonus to be declared for different series of policyholders, and ensures equitable treatment of all policyholders.

As this is a complex matter, it is not possible for the bonus declaration formula to be spelled out in the policy contract.

In 2001, we issued two new series of annuity contact to offer a lower guaranteed return. This was necessary to reflect the lower interest rate. The new series did not adversely affect the old annuity contracts, such as the annuity taken by Mr Lai.

Although the new annuitants enjoy a bonus during the last two years, they still receive a lower return compared to the high guaranteed return enjoyed by Mr Lai.

I understand that Mr Lai has raised this issue with us in the past. We have provided the explanation to him previously. He is still not convinced.

If Mr Lai still feels that he has been misled into buying the annuity contract, I wish to offer him a refund of his invested sum with interest at 4.5% per annum, less the annuity payments that he has received.

The proposed rate of 4.5% is the average net rate that was earned on our investments during the past 10 years. I shall also be making this offer to other annuitants who had bought the same series of annuity as Mr Lai.

Tan Kin Lian
CEO
NTUC Income

Use MMS to take picture of accident

USE MMS TO TAKE PICTURE OF ACCIDENT

NTUC Income has come out with an innovative way to help policyholders in their motor accident disputes through the use of MMS technology.

NTUC Income handles about 2000 accidents each month. About 10% of these cases involve disputes between the parties on the cause of the accident. The parties give conflicting versions in the accident in the accident report. This makes it difficult for the insurers of the vehicles to decide on the party that should pay for the damages.

Some motorist try to distort the fact of the accident so that they can avoid liability. They want to put the blame on the other party and keep their No Claim Discount.

To help our policyholders in these disputes , NTUC Income is starting a service to encourage them to send an MMS of the photos taken at the accident scene. Many motorists now carry a mobilephone that can take pictures and send them to us immediately by MMS.

Photos showing the position of the vehicles as well as the damages caused by the accident are useful in the investigation of accident liability. It will also prevent aggravation of damages after the accident to inflate the repair cost.

Our policyholder should also give other useful information like the third party claimant's contact as well as whether there are any injuries substained due to the accident.

The MMS can be sent to XXXX XXXX to be stored directly into our server. Alternatively, the motorist can download the photo into a computer and send them to us by e-mail at photo@income.com.sg. When the motorist call our 24 hour accident reporting center, our staff will tell them about how to send the MMS or e-mail.

We hope to solve 50% of the disputes through the use of this new initiative.

Tan Kin Lian
Chief Executive Officer
NTUC Income

You can buy the annuity between 55 and 62

22 October 2005

Editor
Forum Page
Straits Times

I refer to the letter "Buying annuity ? No need to rush, can wait till 61" by Mr Dennis Ng Kah Wan (ST, 20 Oct 2005)

Mr Ng said that in the current low interest environment, it is better to leave the CPF Minimum Sum in the retirement account to earn guaranteed interest of 4% per annum. There is no need to decide whether to convert the minimum sum into annuity at age 55.

I agree that the guaranteed interest paid by CPF is attractive. The retiree also has the choice to decide on buying the annuity at any time between 55 and 62. Many of them are aware about this choice, if they speak to our insurance adviser.

As stated in my previous letter, if $90,000 is used to buy a life annuity at age 55, we expect to pay a monthly sum of $543 from age 62, comprising of a guaranteed sum of $473 and an estimated bonus of $70. The bonus amount will depend on our investment yield in future years and is not guaranteed.

If the $90,000 were to be kept in CPF Retirement Account up to age 61 years and 11 months, the sum will grow to about $118,000. Using the sum to purchase an annuity then, the monthly payout from age 62 will only be $528. Based on this example, an earlier purchase of an annuity is a better decision.

I will let each retiree decide on whether it is better to buy the annuity earlier or later. If you buy the annuity later, you will have to take the risk that the plan may not be available at that time, or the terms may change.

For people who are interested to know more about the annuity plan, I suggest that they attend our educational seminar. I will be happy to make a presentation and to answer questions from the floor.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Annuitants who did not receive a bonus in recent years

22 October 2005

Editor
Forum Page
Straits Times

I refer to the letters "Don't bank on bonuses to boost monthly payout" by Mdm Ng Lee Chin and "Why was no bonus declared?" by Chen Zhide and Chiang Bak Hoi (ST, 20 Oct 2005).

The three writers bought an annuity plan from NTUC Income. They were disappointed that they have did not receive any bonus during the past three years.

From the information gathered, the writers have invested in our earlier series of annuity policies.

NTUC Income started the participating annuity plan in 1993. They offered high guaranteed payout. For example, a male at 55 investing $90,000 was given a monthly payout of $765 per month. The annual payout amounts to 10.2% on the amount invested. This is a very attractive payout, considering the low interest rate environment
in recent years.

For this series, we used a guaranteed interest rate of 5% to compute the guaranteed payout, and pays a bonus if our average investment yield is higher than 5%.

The annuity is payable for a lifetime, which may stretch for 25 years or longer. In the event of early death, the annuity is payable for a minimum of 15 years.

As the average investment yield in recent years was less than 5%, this batch of annuitants did not receive any bonus. But, they did receive an attractive guaranteed payout which is more than can be obtained from other types of low risk investment today.

We introduced two new series for new purchasers. The series introduced in 2002 provided a lower guaranteed payout, computed on an assumed interest rate of 2.5% per annum. They will receive a bonus if the average investment yield is higher than 2.5%. This batch of annuitants have received a bonus of 0%, 2%, 2.5% during the past 3 years, or an average of 1.5% per year.

We have notified our annuitants on several occasions about our system of declaring bonus on their annuity plan.

We invited our annuitants to a dialogue session on 26 February 2005 for them to ask questions and seek clarification. About 100 annuitants attended. At the dialogue, the earlier batch of annuitants realised that they had a better payout than the later batches. The later batches of annuitants asked if they could be placed in the same footing as the earlier batches. We explained that this was not possible.

As an insurance cooperative, NTUC Income aims to act fairly in the interest of all policyholders, including annuitants. We declare most of our surplus to our policyholders, and invest their money prudently to safeguard their long term interest. We distribute the surplus fairly to all policyholders.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Two ways to buy a life annuity with your CPF

A CPF member is required to keep $90,000 in the CPF to be withdrawn in monthly installments. He can buy a life annuity with this sum.

Here are two ways to buy the life annuity:

- buy at age 55, and receive the monthly payment from 62 years.
- keep in CPF to earn 4% per annum, and to buy the annuity at age 62

Which is better?

If you buy the annuity at age 55, we pay you a guaranteed interest of 2.5% and bonus that depends on the earnings of our insurance fund. Based on our past record, we expect the bonus to vary from 1% to 3%, but this is not guaranteed.

If you keep in the CPF, you will get a guaranteed return of 4% per annum, which is quite attractive. You can invest in the life annuity after age 62. The amount that you can get depends on your age, gender and the amount invested.

Generally, our life annuity gives a guaranteed return of 2.5% plus a bonus that depends on the earnings of our insurance fund. We also give a higher payout, as the capital sum is consumed during your lifetime.

Many people find it quite attractive to buy an annuity at age 55. The guaranteed return of 2.5% plus the bonus (assuming 2% per annum) will be better than keeping the money in CPF.

Pay an annuity to an injured person

Some people are injured in an accident. They are paid a lump sum as a compensation.

It is better for these victims to receive an annuity of $X a month for a certain number of years, or for a lifetime.

This ensures that the money is used for the purpose, ie medical and living expenses, and not used for other purpose, eg buy a property or speculate in investments.

Pay regularly using an annuity

Singaporeans donated $70,000 to the parent of the Nepalese twin (Gangga and Jammu) to take care of their expenses for 8 years. The parents claimed that they did not receive the money.

It would have been better if the money had been given to the parent in the form of a monthly annuity. The monthly payment could have been around $800. This will ensure that the money is used for the living expenses, and not used for other purpose.

A 8 year term annuity is suitable for this purpose. Technically, this is called an "annnuity certain", but I prefer to create a new name, called the term annuity.

Buying an annuity is a good option!

12 October 2005

Editor
Forum Page
Straits Times

I refer to the letter "Buying an annuity may not be the best option" by Dennis Ng Kah Wan (St Times, 7 Oct
2005).

Mr Ng said that if he keeps the minimum sum of $90,000 with the CPF Board, he will get a monthly payout of about $711 at the age of 62 for 20 years. He said that if this sum is invested in a life annuity, the payout will be between $398 and $483, depending on which annuity plan you choose and whether you are male or female.

Under the annuity plan now offered by NTUC Income, we pay a guaranteed monthly sum plus bonus. The bonus is determined yearly based on the average yield earned on the investments in recent years. Over the long term, we expect the bonus to vary from 1% to 3% per year, but this is not guaranteed.

If the $90,000 is used to buy a life annuity at age 55, we expect to pay a monthly sum of $543 from age 62, comprising of a guaranteed sum of $473 and an estimated bonus of $70. The monthly annuity will continue to increase each year based on the bonus declared for that year. Assuming an average bonus of 2% per year, the
monthly payment is expected to reach $662 at 72, $807 at age 82 and $984 at age 92.

The life annuity offers two attractions:

- it is payable for the lifetime of the annuitant
- the payment will increase with bonus in most years, providing a cushion against inflation.

From actuarial statistics, about 30% of male and 40% of female are expected to live beyond age 82. This proportion is expected to increase in the future, due to longer life expectancy.

Over 25,000 people have bought a life annuity from NTUC Income. A large proportion of them invested their CPF minimum sum with us. They do not wish to take the risk of living beyond age 82 and running out of money. We have a market share of 65% of all life annuities sold in Singapore. The remaining 35% are shared among 5 other
life insurers.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Insurance Website of the Year

STATEMENT

www.income.coop

We are delighted to be awarded the Insurance Website of the Year in the 9th Asian Insurance Industry Award.

Our new website was designed by an internal project team comprising of our young officers. Our aim is to provide information that is easy to access and can provide useful information to the public. We adopt a practical approach in the design of our website, and avoid the excesive use of graphics, to reduce the downloading time.

We have a website in English, Chinese and Malay to cater to our customers who are familiar with the common languages in Singapore.

Our website now attract 10 million hits each month. It continues to grow rapidly each month.

The website will be the core of our business strategy for the future. It will be the central source of information for our customers, agents and employees. It will contain information about our products, practice notes, forms and other materials. All parties will refer to the same source of information. This will provide transparency and consistency of practice.

The website will be expanded to allow transactions to be submitted. We will actively advertise our website, and will attract more visitors.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Pay $6 an hour?

Editor
Today Paper

I refer to the article "15 jobless citizen enlisted in the mozzie inspector brigade" (Today, 11 Oct 2005).

I congratulate the Holland Bukit Timah Town Council for this excellent initiative to provide jobs to our unemployed citizens and to get them to do useful work. They go round the housing estate to look for potential breeding places of mosquitoes and take the remedial action.

These inspectors are paid $100 a week for 25 hours of work. This works out to a hourly rate of $4.

I suggest that the town council should consider paying $6 an hour. For a person that works 8 hours a day, this will give an income of $1,000 a month. This is necessary to meet the high cost of living in Singapore.

By paying a more adequate rate, the workers can work with pride and treasure their job. They will not move to another employer that pays slightly more. They can build expertise.

I understand the reluctance of the government to impose a minimum wage, due to the need to keep business cost down in Singapore.

Perhaps, the publicly funded bodies can set an example to pay a more adequate wage, and this can set the benchmark for other employers?

Tan Kin Lian

Culture of Goodies

The organiser of a corporate outdoor event said that they gave out 1,500 goodie bags, with tee-shirts and other attractive items.

1,500 people collected the goodie bags. Only 300 took showed up for the outdoor event.

Is this cheating?

Cheating on bus fares

Some people cheated on bus fares. They tap their ezLink card immediately on boarding the bus (instead of time of exit), so that they pay a lower fare. The government is passing a law to punish these cheats.

Is there a better way to handle this problem?

Deductible under Shield plans

QUESTION:

I am currently a IncomeShield Plan B policyholder and will like to seek some clarifications on how claims are processed under IncomeShield.

An agent shared with me the attached article. It is taken from Business Times. It was doing a comparison on the payouts from the different Insurers. I was very surprised that most of the insurers, including Income does not pay a cent in the example where a policyholder stays at Mt Elizabeth for 2 nights.

Could Income explain how the claims are processed? For example, what items will be considered for the deductible. Lastly, if the policyholder had bought the IncomeShield rider, how does it helps in this example?

ANSWER:

All the Shield plans are required to have a deductible, representing approximately 5 days of hospital stay. The principle is that the patient should pay for the first 5 days, and the insurance will pay for 90% of the bill in excess of the deductible.

This condition is imposed by the Ministry of Health.

We offer a rider that charges a separate premium (to be paid by cash) that will cover the deductible and the balance of 10%. Many people have opted to buy this rider.

Tan Kin Lian
CEO, NTUC Income

Private shield plan can cost up to $3,500 per year

Customers compare the coverage offered by private shield plans. They think that the higher coverage, the better the plan.

Here are a few important facts:

- in most cases, the higher coverage is not needed, especially if the patient is treated in the appropriate ward in a restructured hospital.

- a plan that offers a higher coverage can cost up to 60% more in premium.

For example, under plan A, a plan that pays "as charged" will cost $3,500 per year at age 80. NTUC Income offers a similar plan that charges a premium of about $2,100 at age 80, ie $1,400 lower. Our plan pays the same amount for most of the typical hospital stays.

Private Pension Plan - opt out scheme

Prime Minister Lee has announced that the CPF is studying an opt-out pension plan for CPF contributors. The aim is to encourage CPF members to invest in a pension plan that can provide:

- a better return than CPF interest rate
- well diversified
- low charges.

The Combined Fund from NTUC Income fit into this description. By investing in the Combined Fund, the CPF member can get the benefits of the proposed opt-out plan and enjoy the freedom of choice.

Claim 100% of ward fees

Snow White asked this question: "What is your advice regarding the enhanced medical plan, where policyholders can claim 100% of the ward fees (less co-insurance) even if they opt to stay in better wards like B1 or A-wards? The premium are almost 3 times of the original Medishield plan. Should I stay with a hospital and surgical plan."

My reply:

- the limits provided under Incomeshield plan (from NTUC Income) is suffient to cover the charges in B1 and A ward in restructured hospital.

- our premiums are about 50% to 100% higher than Medishield, but are lower than the medical plans provided by other insurers.

- 800,000 people are insured with Incomeshield (giving the largest market share)

- it is better to buy an Incomeshield plan earlier, as it provides lifetime coverage. The H&S plan is a yearly renewable plan. You may not get the coverage when you leave your present employer.

Test your Logic: www.income.coop/logic9

Test your logic.

Try the Logic9 game at www.income.coop/logic9. This game is similar to the game called SuDoku, which is the craze in many countries.

You are to fill the blank squares with the digit 1 to 9, so that it is not repeated in any row, any column or any box (3 x 3).

For the easy version, you have to fill 3 out of 9 boxes. For the more difficult verion, you have to fill 4, 5 or 6 out of 9 boxes.

Have fun.

About Life Annuity

Editor
Today Paper

I refer to the letter entitled "Annuity conumdrum if I die early" by Lim Boon Hee (Today, 27 September).

Under the CPF Minimum Sum Scheme, a retiree is allowed to invest the minimum sum of $90,000 in a life annuity plan at age 55 and to receive the annuity payment from age 62.

Mr Lim asked what happens if the annuitant dies before age 62 (without receiving any payment) or at age 65 (after receiving only a part of the $90,000). Will the annuitant lose part or all of the $90,000?

Under the annuity plan now offered by NTUC Income, we will refund back the balance of the $90,000 with interest up to age 62, after deducting any payment that has been received by the annuitant. If death occurs before age 62, we will refund back $90,000 with interest. If death occurs after age 62 and the annuitant has received $20,000 (say), we will refund back $70,000 with interest earned up to age 62.

The annuitant will only lose the interest after age 62. This interest is left in the annuity fund to benefit the annuitants who live longer. The life annuity will continue to be payable for the lifetime of the annuitant, even if the annuitant lives beyond age 90 or 95 years.

If the retiree leaves the money in the CPF to earn interest at 4% per annum and takes out the monthly sum allowed by CPF, the minimum sum will be fully used up by age 82. After age 82, the retiree will have no further source of income.

With longer life expectancy, many people are expected to live beyond age 82. We can see many people around, who have lived beyond that age.

About 28,000 people have invested in a life annuity from NTUC Income. They realise the benefit of this type of insurance product. They do not wish to take the risk of living too long, and running out of money. We provide about 65% of all life annuity in Singapore.

If the retiree wish to leave behind some money for their family, they probably have a property and perhaps other savings or assets.

Tan Kin Lian
Chief Executive Officer
NTUC Income

NTUC's plan for low income workers

NTUC has suggested that workers earning less than $1,000 be exempted from CPF. This will save them 20% of their wages. They need the full wages to meet a basic lifestyle, due to the high cost of living in Singapore.

NTUC suggested that the government should top up the CPF savings of these low income workers, so that they can buy their HDB flat.

I think that this is a wonderful idea.

In some countries, the government pays people who do not work. It is called unemployment benefit.

The approach by NTUC is to encourage these unemployed workers to work, even if it is a low income job. The government can help them by contributing to their CPF savings. It is an indirect way to give some help to these workers, but they must work.

Wrong way to attract people to attend a seminar

I attended a seminar recently on investment-linked product. It was organised by a few important organisations.

There was no charge for the seminar. More than 500 people attended.

The organiser gave an attractive goodie bag (worth $15) and a sumptious meal (worth another $15). Some of the attendees appear to be regular attendees at these seminars.

Do we need to spend so much money to organise the seminar? Are we attracting the wrong people who attend for the wrong reason?

Reply to: Policies similar but returns differ

Editor
Forum Page
Straits Times

I refer to the letter from Mdm Dorothy Ballard entitled "Policies similar but returns differ" (Straits Times, 11 Aug 2005).

Mdm Ballard said that the endowment policy that she bought from NTUC Income 20 years ago gave a return on maturity of 5.47 percent compounded annually. A similar policy taken from another insurer gave a lower return of 4.29 per cent.

This difference in return, compounded over 20 years, produces a 14% higher payout from NTUC Income.

I wish to explain why it is possible for NTUC Income to give a better return to our policyholders:

- we are a cooperative society
- we pay lower commission to our insurance agent
- we keep our salaries and expenses at a modest level
- our shareholders receive a modest rate of dividend.

By spending less, we are able to give a better return to our policyholders through lower premium or higher bonus. This can amount to a lot of money over many years.

Many people think that the key factor is skill in investment management. This is not so. Over a period of years, most large sized funds will produce an average rate of return that reflect the economic fundamentals.

We hope to convince Mdm Bollard and other policyholders that it does matter who they choose to invest their long term savings with, and that they will choose a well managed cooperative.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Add a term rider to your Ideal plan (ILP)

Add a term rider (LTA or DTA) to an Ideal plan. It should be 20 years of savings. For example, if the policyholder wish to save $250 a month, the term rider can be for $60,000.

Under LTA (level term assurance), the term rider pays $60,000 on death during 20 years, plus the saving in the Ideal plan. After 20 years, the rider expires, and the accumulated savings (which is $60,000 plus gains) will be paid.

Under DTA (decreasing term assurance), the term rider pays $60,000 reducing by $3000 each year over 20 years, plus the savings in the Ideal plan. Although the term rider reduces yearly it is more than offset by the additional savings in the year.

On death at any time, the total payout (including the savings in the Ideal plan) should be more than $60,000.

The annual premium is:

Entry  -- Male --    -- Female -
Age     LTA   DTA      LTA   DTA    

25       84    42       55    25    
35      211    85      139    57    
45      686   290      455   190

The premium rate for DTA is less than half of LTA. The cost difference is more significant at the higher entry ages.

The premium rate for female is about one-third lower than males.

The annual cost of LTA and DTA at the younger entry ages (ie less than 35) is less than $200, and is highly affordable.

RECOMMENDATION: Add a LTA or DTA to our Ideal plan. The premium is level and does not increase with age.

Training Bond

New employees joining NTUC Income is required to sign an agreement to pay us back one month's salary if they leave our service within the first year.

This is a training bond. It is intended to compensate us for the cost of training the new employee. Our actual cost is much higher.

We have implemented this condition for the past five years. It has produced an unexpected benefit. A new employee who is not serious about joining us will not accept our job offer. Those who accept our offer are serious about making a career with us.

This is an effective "selection process". We get the right employee to join us. We enjoy a low turnover rate, and reduced wastage in recruiting and training the wrong people.

We have a few cases where the new employee is not suitable for the job. We ask the employee to leave and waive the training bond.

Singapore has adequate talent

I often hear the remark, "Singapore is short of talent".

I disagree. We have adequate talent. However, they are not well used.

We have many well educated people. Look at the number of graduates, including those who have pursued university degrees on their own. We have many MBAs.

The problem is: are they able to apply their knowledge well? The answer is, "many people are over-educated and under-utilised".

If they learn how to apply their knowledge effectively, we will have more than sufficient talent.

Pay an adequate hourly rate

I found, to my surprise, that casual workers are paid as low as $3 an hour, for example, at fast food outlets.

If they work for 8 hours a day, they earn only $500 a month. This is too low to make a living. The cost of living is quite high.

I suggest that the minimum wage should be at least $6 an hour. A person working 8 hours a day should earn about $1,000 a month all-in.

Maybe $6 is still inadequate, but it is better than $3.

Digital navigation system a hazard?

Editor
Forum Page
Straits Times

I refer to the letter entitled "Digital navigation system a hazard?" by Michael Yeo Khee Hiang (St Times, 10 Sept).

I have tried a few PDA and PC-based navigation systems in my car over the past 12 months.

They are very useful and quite safe to use. All provide clear voice directions and do not require the driver to watch the video screen.

By giving directions earlier, it helps the driver to keep to the correct lane and drive more carefully. It avoids accidents due to unfamiliarity with the roads.

It may take a new user a few days to get used to the system. During the initial period, the problem raised by Michael Yeo could arise. But, the benefit will accrue after that.

I encourage more cars to be installed with the navigation system to promote safe driving.

Tan Kin Lian
(sent in my personal capacity)

Car sharing for newly qualified drivers?

The Editor
ST Online
9 September 2005

I refer to the letter from Tan Tiong Heng (ST Forum Online 8 Sep 2005).

NTUC Income operates the car sharing scheme to provide an afforable means for its members to share the use of the cars owned by the cooperative. We operate a fleet of 180 cars located at 70 convenient locations. The current fleet serves 5,200 members.

At present, we impose a condition that a member must have at least 30 months of driving experience. This is to reduce the incidence of accidents. If there are many accidents, the cars will not be available and will adversely affect the quality of service to other members.

New drivers can borrow a car from family members, friends or colleagues. They also often benefit from being accompanied by another experienced driver while practising.

We do not think it is suitable for the car cooperative to mix the needs of new drivers with the general needs of our members. Nevertheless, we do adopt a flexible approach and will be prepared to waive the 30 month bar if the applicant can demonstrate his car handling capability.

We have taken note of the views of Mr Tan. We will see if we can set aside a few additional cars to serve the needs of newly qualified drivers.

Lewis Chen
General Manager
NTUC Income Car Co-Op

Risk is to your advantage

I advise investors to invest in a large, well diversified mutual fund, such as the combined fund operated by NTUC Income. They ask, "is it risky?"

I reply, "yes, but risk is to your advantage". Here is my reason:

- if you invest $100,000 to earn 2.5% for 10 years (ie a safe investment), you will get $128,000

- if you invest to earn 6% (ie a risky investment), you will get $178,000.

- risk can work both ways - you can get more or les than $178,000 at the end of 10 years

- if you get more than $178,000, you can realise your investment

- if the market is bad and you get less than $178,000, you can wait 1, 2 or 3 years for a better time to realise your investment

- risk is to your advantage, if you can wait for the right time to realise your investment.

Many people who attend my educational seminar agree with my statement, "Risk is to your advantage". They choose a fund that has a higher proportion invested in equities.

A wonderful message

A reader of my blog sent me this wonderful message:

Dear Mr Tan

Thanks for putting in the extra effort in writing a blog. Yours is very informative and straight to the point. No nonsense, short and sweet. It's the best I have ever come across.

Fuel Subsidy

Poor countries face a dilemma with rising oil prices.

If the government keeps the domestic price low, they bear the cost of the subsidy. Their people can take advantage of the subsidised price and buy more and make a profit from re-selling the fuel.

If they adjust the price to reflect the world market price, the ordinary people cannot afford the higher price.

What should they do?

Trading in Structured Warrants

Dr Larry Haverkamp wrote an article in Business Times. He said:

- many people are trading a lot of money in structured warrants
- last month the amount was $1 billion, representing 20 per cent of the stock exchange’s total trading volume
- structured warrants are a "zero-sum" game; for every $1 million won by some people, others will lose $1 million.

Dr Haverkamp also told me separately:

- the structured warrants are created by the issuing banks
- they set its price at issuance
- issuing banks are also the market-makers
- they do not reveal how much they charge for issuing the warrants OR for market-making

I have never invested in structured warrants, structured deposits and other complicated products. Without full disclosure of their costs, I prefer to avoid them.

I favour to invest in unit trusts that offer low charges. The investments are likely to earn an average of 5% to 8% per annum over the future. If the charges are less than 1%, I will be able to keep most of the profit for myself.

Handle issues at the proper level

As the CEO, I am available to my customers. I give my e-mail address for them to contact me directly.

Some of our customers are not considerate. They will ask me to handle an issue that can be handled through my colleague.

Here is an example. A policyholder receives a bill that he has already settled. He sends me a complaint that "the bill has already been settled".

My reply to the customer: "I believe that the bill tells you where you can call to make an enquiry. Frankly, I am the CEO but not the person who handles every enquiry. I will pass your enquiry to my officer. "

I hope that people can be more considerate.

Do not involve irrelevant people

A policyholder send an angry letter about not being able to use Medisave to pay the premium under the Managed Healthcare Scheme from 2007. He copied his letter to several ministers.

I replied to the policyholder:

quote
It is my policy never to reply to a person who writes to me, with a copy to the media or to important people in the government. I find this attitude to be unacceptable.

I suggest that you withdraw your previous e-mail (and notify the other people). If you write to me separately on this matter, I shall be happy to reply to you at that time.
unquote

He acted on my request and told the other people that he will liaise directly with me. Although this does not amount to a "withdrawal", I agreed to reply to him.

What is better than ??

Here is a brief summary of an excellent speech given by Butch Jimenez to the graduating class of the University of the Philippines:

What's better than focusing on the negative? Focus on the positive.
What's better than working hard? It's working smart.
What's better than dreaming? Imagineering.
What's better than doing something for yourself? Doing something for your
country.
What's better than a vision? A cause.
What's better than a long speech? Definitely, a short one.

Talk on Investment at Marine Parade Community Club

I gave an educational talk on investment at Marine Parade Community Club on Saturday 27 August. It was well attended with 200 participants. The Q&A session was very lively and interesting.

The audience found the talk to be useful. They also enjoy a bonus of 2% (ie $2,000 for an investment of $100,000) when they invest within 14 days.

We hold a seminar every week, either at NTUC Income Center (Bras Basah Road) or at a community club. Go to www.income.coop to find out about these seminars. Or call 6788 1111 to find out details of the next talk.

Lowest interest rate for policy loan

An AIA policyholder (Ms Bollard) wrote to the Straits Times to complain that AIA charge 8% for their policy loan.

Other insurers charge from 5.5% to 7%.

There is only one insurer that charge 5.5% for the policy loan, ie NTUC Income. The other insurers charge 6% to 7%.

Singapore is too hot?

Singapore is a nice place to live. It is safe, clean and pleasant.

It has a major drawback. It is too hot.

Long ago, we can enjoy the breeze, which makes life more comfortable. But, the breeze has gone. It is blocked by the buildings. The air conditioning from the houses also blow hot air outside.

I am looking for a way to create breeze. If we can have more breeze, it will be more pleasant.

We are now able to create drinking water using science, and be economical. Maybe, we can use our technology to create breeze?

When will the 10% discount on motor insurance cease?

Someone asked me, "When will the 10% discount on motor insurance cease? His car insurance will expire in a few months time. Will the discount be available on his expiry date?"

My reply, "If you wish to enjoy the 10% discount, you can call our hotline now and register. We will keep the discount for your next renewal. If you do not register now, you will not enjoy the 10% discount when the offer ceases in 1 or 2 months' time. "

So, act now. Register first. You can decide at the expiry date, if you wish to take up the offer.

Educate our young on "character"

Our education system focused on "excellence".

To be excellent, a student has to be top in the class. He have to compete against his classmates. Unconsciously, he learns to be self-centered and selfish.

I prefer an education system that is more balanced. Apart from excellence, it has to teach our students on "character". He has to learn to be considerate, to be generous, to be honest and to show concern for others.

Difficult to make regular saving?

A young person told me that his salary is not enough. He has to pay back a university loan. He finds it difficult to make regular saving. What is my advice?

I replied that his priority should be:

- be frugal and modest in his expenses
- repay his university loan in installments
- make regular saving of 10% to 15% of his salary

After that, he can use any spare saving for travel, entertainment and other expenses. He should avoid taking a loan for a car or other major expenses, as the interest charges are high.

It is important to have regular saving now, when he has a job. In the future, jobs will be less certain. He may be retrenched or the company may close down. At that time, he will have to draw down on his savings.

The best way to invest the saving is in a flexible plan, such as a ILP (investment linked plan).

I hope that this advice is useful for other young people.

Repair new cars at distributor workshops?

Someone asked me, "Why can't NTUC Income discuss with the distributor workshop to repair new cars at their workshop and protect the warranty? "

My answer is:

- we are prepared to work with the distributor workshop
- we have approached them on many occasions in the past
- some are willing to agree with us on a price that is 150% of our quality workshop
- other distributors insist on their repair charges, ie 250% of our quality workshop.

We suspect that the distributors discriminate against us on their pricing. They are willing to give discounts to their tied up insurer, but not to us.

We suggest that the motorist register with us, and come to us after the first year. You can enjoy a 10% discount on our competitive premiums.

Insure your new car with NTUC Income

I encourage owner to insure their new cars with NTUC Income:

- you enjoy lower premium

- if your car is repaired at our quality workshop and your distributor void the warranty, we will take over the warranty.

You do not have to pay higher insurance premium or servicing charges, just to protect your warranty.

My advice: you can use the free warranty provided by the distributor for the initial period. After that, you can forget about the warranty. Many motorists tell me that any defects in the car is likely to be identified within the first few months.

If your distributor gives you an incentive to insure with their tied-up insurers, you can take the incentive for the first year. For the second year, you can come to NTUC Income.

If you register with us now, we will give you a discount of 10% on your insurance. You enjoy this 10% discount ON TOP of our competitive premium rates.

Call 6477 7722 or go to www.income.coop

48 million hits in June 2005

The various websites managed by NTUC Income has hit 48 million hits in June 2005. This is a 5 fold increase from 9 million hits 3 years ago.

The visits have increased signifcantly due to:

- launch of Big Trumpet
- revamp of our Income.coop website

We are probably one of the top 10 websites in Singapore - and this counts the large banks with internet banking and the internet service providers.

Visit:

www.bigtrumpet.com.sg
www.income.coop

For candidates who want to work in NTUC Income, visit our recruitment portal:

www.income.coop/careers

Happy National Day.

Singaporeans should learn to see "grey"

In my interaction with many Singaporeans, I find quite a common trait. They see things as "black" or "white". They cannot see things as "grey".

For an issue, they make judgement on what is "right", which is based on their personal opinion. They cannot see that there are many other choices that can also be "right".

They are not able to accept that some things are "not right", but they are also "not wrong".

There people are quite to jump to conclusions (without checking the view of the other person), to make judgement and to criticise other people. We see them reported as the "ugly Singaporean" when they travel overseas.

Here are some tips:

- recognise that there is "black", "white" or many shades of "grey"
- recognise that there can be several "right" choices - not only your own
- respect the views and opinions of others
- as you fight for your "rights", remember that other people also have "rights".

Happy National Day.

Cost to Video Record your home

Some owner want to install a camera at their home, and record the visitors into a DVR recorder. he following is available at Sim Lim Square:

a wireless camera (9V battery operated) + a receiver: $98
DVR with 80 GB HDD: $600.

The 2 equipments allow video recording of the entrance at your home. The hard disk allows rcording for up to one month.

National Day, 9 August 2005

We are celebrating the 40th anniversary of our Nation.

This year's National Day is a happier occasion:

- the economy is growing
- the stockmarket is robust
- jobs are now easier to find

We must look further ahead. Globalisation will continue to make a big impact on our way of life:

- business is getting very competitive.
- margins are being squeezed
- customers are more demanding

We need to innovate and change.

Here are some tips to ordinary people on how to cope with the challenging times:

- be frugal
- be modest
- have some savings

I wish you a happy National Day.

Visit 3 attractions for $10

Here ia a great way to spend a weekend with your family.

You can visit 3 attractions at only $10!

- Enjoy snowy cool fun activities at Snow City
- See the high-tech world of sports at Science Centre
- Experience the thrills of the giant screen at Omni-Theatre

The usual price is $28, so you save $18 per person.

This promotion is exclusive for policyholders of NTUC Income, and is available for a limited period only. Call 6788 8788.

Privacy?

Some working couples leave their maid at home alone during the day. They stand the risk that the maid may invite visitors into their home.

I suggested that they install a camera at home to record visitors. A few people argued that this shows a lack of trust of the maid or intrude into their privacy.

Here are the positive reasons:

- the camera record the main entrance to the home only
- there are many parts of the home that the maid can keep her privacy
- when we use an ATM machine or visit a shopping mall, we are being recorded

Trust is mutual. If the maid does not respect my right to protect my property, it is all right. I can look for another maid.

There are many ways to show kindness and respect to the maid. We can pay an adequate salary and give time off.

A new way to recruit employees

NTUC Income has adopted an innovative way to recruit new employees. It is producing encouraging results.

Earlier this year, we advertised in the major newspapers about the various types of jobs that will be available in 2005. They include insurance officers, marketing officers, customer service officers and professionals, such as accountants, actuaries, lawyers and others.

Interested applicants were invited to register in our recruitment portal. About 3,500 candidates responded and registered in the portal at www.income.coop/careers.

During the past 6 months, we have sent out the specifications of 50 jobs to suitable candidates, based on their area of interest and expected salary. These candidates are selected based on the details recorded in the database. On average, we invite about 50 candidates for each job.

The invited candidates are able to study the specification of the advertised job, and to respond, if they are interested. Based on their replies and preliminary assessment, we are usually able to shortlist about five candidates for an interview.

We have recruited 250 employees duirng the past 6 months, using this new approach. The quality of the candidate is as usually better than the traditional method.

Standing Arrangement on Policy Loan

LETTER TO BE SENT TO POLICYHOLDER OF NTUC INCOME

Dear Policyholder

POLICY XXXXXXX - LOAN BY TELEPHONE

You have taken a life insurance policy with us for more than 5 years. It has
accumulated a large cash value.

We wish to offer you an attractive arrangement:

- you can take a loan against this cash value by giving us a telephone call
- the loan will be credited to your bank account immediately
- interest will be charged at the prevailing rate, which is currently 5.5% per annum

To benefit from this arrangement, you have to open a "standing arrangement" with
us, as follows:

- you have to sign and return the attached agreement
- the fee of $50 is waived, if you sign up within 1 month of this letter.
- you do not pay any fee, apart from interest on any sum that is drawn down

For more information, call XXXXXXXXX

----------------------------------

WHY WE ENCOURAGE OUR POLICYHOLDER TO TAKE A LOAN?

We want to make it easy for our policyholders to take a loan from us.

Many are not aware, and they take a loan from credit card which carries 18% or 24% interest. Borrowing from loan sharks is higher. If they borrow from other insurers, they pay 6 to 8% interest.

If they take a loan from us, they save on the interest. It makes our insurance plans look much better.

Inexpensive to cover for Personal Accident

Recently, a cyclist crashed into a barrier in Tampines and may be paralysed for life. This unfortunate accident is a poignant reminder of the uncertainty of life. Besides the emotional trauma, the financial strain on his family can be quite considerable.

Accidents can happen anywhere, anytime. It is useful for people to have Personal Accident insurance. The payouts can help relieve the financial burden.

For as little as $6 a month, a person can receive up to $100,000 on permanent disability. This can tide over the immediate financial burden, as it will take time and cost to puruse a legal claim for compensation.

Our personal accident plan provide worldwide accident cover, 24 hours a day. It also covers natural perils and reservist training at no additional cost. You can aslo insure for payouts for temporary disablement and medical expenses.

Investment-linked product: choice of life cover

NTUC Income will offer 2 choice of cover for our Ideal plan (ie an investment linked product or ILP):

- level term
- decreasing term

Both covers will be paid by a level premium, which is lower than the premium under a traditional policy. The sum assured is payable in addition to the savings accumulated in the ILP plan.

For example, a policyholder who saves $2,000 a year may take a level term or decreasing term to cover $50,000 over 20 years.

Under level term, the sum of $50,000 is payable in addtion to the accumulated savings.

Under decreasing term, the sum is reduced by $2,500 each year, and is payable in addition to the accumulated savings.

The cost of the term insurance cover is quite modest. To find out more, visit our office in Bras Basah Road. You can also attend our educational seminar.

Call 6788 3366.

19 people gave their "wish for Singapore"

A colleague posted an article "I wish for Singapore..". 19 persons responded. Some posted more than 1 wish.

Consideration, less kiasu, more helpful - 6 wishes
More prosperous, more gracious, patience, happiness - 6 wishes
Terrorism-free - 4 wishes
Cooler weather, 4 seasons - 4 wishes
$250 per month for elderly people - 3 wishes
Self sufficiency in water and a hinterland - 1 wish
More green concious - 1 wish

Make a third party claim against NTUC Income

Here are the questins posed by a third party claimant, and reply given by me.

Question:
Friends from the industry have told me, that insurers make it difficult for people who are claiming against it for motor insurance policies. I just got my car banged by someone and Income (who insured the other party) have been refusing to coorporate with my workshop for the third-party claim, despite my workshop sending in pictures, to get it expedited.

I'm told that this delaying tactic is common practice for Income when a workshop or insurance company wants to claim against it, and now I've experienced it first hand.

Reply:
We have found, over the years, that the workshop likes to submit an inflated bill for motor repairs. If they can repair a car for $X for their customer, they will charge 2 times of $X for an insurance company, especially for a third party claim. The distributor's workshop (ie the distributor who sell the car) will charge even more.

Negotiation over the price of repair is the main cause of delay. We like to settle the claim early, but at a reasonable price.

We have advised third party claimants to report their claim to our Idac center immediately after the accident. This allows us to assess the damages and estimate a fair repair cost. As we handle many repairs each day, we are able to get a repair cost that is fair and acceptable to the repair workshop.

If your workshop cannot accept our price, and many other workshop find the price to be reasonable, then your workshop is trying to profiteer on the repair.

If you choose to bypass our request, and you go to your own workshop, and they send us an "inflated bill", what do you expect us to do? Do not blame us for making things difficult. I think that you and your workshop have to be fair to us as well.

If you wish to form a fair opinion about our claim process, I invite you to visit our office. You can look at the number of repairs that are done by us, and the customer satisfaction rate, including the satisfaction for third party claims submitted through our Idac procedure.

Question:
Sure, I know of workshops that charge inflated rates. But why can't the victim of an accident go to his own workshop? How can it be that I have to go patronise Income's workshops?

Reply:
If your workshop is willing to charge a reasonable price, we agree to let the repair be done at your workshop. But, we have to agree on the price first.

There are many workshop that can repair the vehicle, using new parts (for a new car) and provide an acceptable standard of repair, for a reasonable price. This should be the "benchmark" price.

Question:
If you were involved in an accident, would you send in your Mercedes to just any workshop that the third party insurer assigns you to? Obviously not, because it's of no fault of yours that workshops are inflating prices and that your vehicle is banged into by someone else.

Reply:
My honest answer is "yes". I will let my insurer handle the repair, provided that they undertake to ensure that the repair is of an acceptable standard. They are many workshops that can do an acceptable level of work at a fair price. Over the past years, I have a two accidents (also caused by other parties) and have been happy to let my vehicle be repaired at the quality workshop under NTUC Income.

Question:
While insurance firms hagger over costs, they often forget that their customers are already stressed out with an accident, struggling to repair things and move on.

Reply:
Our policyholders are happy to let us arrange the repair. Based on our post repair survey, over 95% of our policyholders have expressed satisfaction at the quality of repair and customer service.

If the third party claimant is willing to follow this procedure, I am sure that they will find it to be stress free.

Question:
People buy insurance so that when the unexpected happens, we have something to fall back on. Claimants do not profiteer from the process. We expect insurance firms to help us, not prolong the uncertainty of a claim.

Reply:
The correct procedure is for you to claim against your own insurer and let them claim from NTUC Income. It is their duty to provide this customer service to you, as you are their customer. If you are not at fault, they should allow you to keep the No Claim Discount.

By making your claim direct against us, you are not being fair to us, because you do not follow our process and insist on your right to make the claim in your own way. We also have our right to protect our interest.

Question:
If others in the industry try to profiteer, it cannot be that the insured is asked to pay the price. My car only rolled out four months ago. It's only fair that I go back to the distributor for the original parts - I'm sure you know there are not many workshops that have the parts to fix my vehicle.

Reply:
I believe that our quality workshop is able to repair your car to a satisfactory standard. If they are not able to, we will certainly use your distributor.

Question:
Is it against "correct procedure" to claim against a third party? Sure, I can claim against my insuer first. But I will fight my case because I am confident of it.

Reply:
I understand your wish to insist on your right. Do be considerate of the right of the other party as well.

We handle 50 repairs of our policyholders on the "tender system". It works quite well - even from the customer perspective. If you do not trust this system, we accept your point of view.

Work Life Balance - more than Flexi Work

Editor
Forum Page
Straits Times

I refer to the letter 'Work-life balance? If only flexi-work is okay' by Ms Lynn Chong Fui Lian (ST, July 22).

I agree with Ms Lynn that more local companies should embrace flexi-work arrangements. Family friendly programmes at the workplace helps staff strike a balance between family obligations and work. Such practices contribute to a high satisfaction rate among staff and a motivated workforce.

Some of NTUC Income's practices:

a) Staff with children below 12 years old can apply for part-time work. This encourages the working mothers to remain with us. They can choose to work half day or alternate full days. Those who are not able to make suitable arrangements for childcare can opt to work from home. They agree with their supervisor on the scope of work, level of productivity and quality standards.

b) Staff can apply for up to two years of no-pay leave to take care of their families.

c) Currently, staff receive one month of paid leave every three years. They enjoy this leave in addition to the normal annual leave. This special leave allows them to spend time with their families, learn a special skill or go on an extended overseas vacation.

d) Staff can select their starting time of work from 7 am to 10 am to suit their family commitments.

To minimise work disruption, NTUC Income has a pool of temporary employees who are trained and deployed when necessary to handle routine functions while an experienced employee handles the complicated ones.

The experience has been positive. Employees like the flexible work arrangements. The organisation enjoys high staff retention and achieves good business results.

NTUC Income has constantly received the 'Family Friendly Employer Award' in recognition of its positive actions in helping employees achieve work-life harmony.

Patricia Ng
Senior Manager, Human Resource
NTUC Income

Principle of insurance - share the loss

A policyholder wrote to ask my advise about a dread disease plan for his other who is 55 years old. He said that the premium is high. Term insurance is cheaper, but he will "lose money" on the insurance.

My advice to him is:

- the dread disease plan is not essential for your mother. If she falls ill, the hospital bill can be met by the hospital insurance (which she is already covered)

- if the premium is a burden on your cash flow, you can probably use it better elsewhere, e.g. to save for your own retirement needs.

You should not refer to "losing money" when you buy insurance. You are paying for the cost of insurance, and not "losing money".

Similarly, when we pay a premium to insure our vehicle or home, we are paying for the cost of insuring the risk. In fact, we are happy that we do not make any claim.

The premium that we pay is "not lost". It is used to pay the claim suffered by other people who meet with an accident or loss. We are helping other people.

If we suffer the loss, other people are helping us. This is the principle of insurance - to share the loss.

A hospital plan that pays without limits

A insurer has introduced a hospital plan that pays the bills "as charged". It does not impose any limit on the amount that can be claimed for each day of hospital stay or on the surgery fees.

This plan is likely to lead to an escalation in hospital bills. The private hospital and doctors will increase the charges to the patient who is covered under this plan, as the insurer has deep pockets.

This will lead to an increase in premium rates for the "as charged" plan. Experience in other countries have shown that this type of plan has the highest escalation in premiums.

If you are interested in the "as charged" plan, you should look at the premium rates. It is around $6,000 a year, at the older ages. This is the premium rate today. In 20 years time, it can be many times higher, due to escalation in medical expenses.

Can you afford this premium, when you grow old? Do you need to have money left for other living expenses?

You need to have an affordable plan that can cover you for a lifetime. Choose a plan that provides adequate coverage at an affordable premium.

Produce More Babies

Many countries face an declining and aging population. People are getting married later, and producing fewer children. Singapore face worse than many countries.

The root cause is the desire of women to compete with men in the working world. Many give priority to a university degree and a steady career. By the time that they are ready to get married and start a family, they are in their late 20s or early 30s. This is past their most productive years.

To change this trend requires a new approach by the government. The state should be willing to bear a larger part of the cost of raising children, and reduce the burden on the individual family.

I propose that each non-working mother should be given an adequate monthly allowance for each child, up to a maximum of three children in the family. The amount should be adequate to meet 80% of the cost of raising the child, and can be paid until the child is 18 years old. I think that a suitable sum is $500 per child.

This will encourage more women to choose to stop work and to raise a family. The women may marry at a younger age and produce a family with 2 or 3 children. The family will not need to depend on foreign maids.

This family payment will be an added cost to the state, and will have to be met with higher taxation. I think that the people who choose not to have children should share in the national cost of producing our next generation.

Many countries already have generous family allowances, of the type proposed by me. They have problems in implementing the benefits, which can be abused. I am sure that we can find a way to prevent the abuse, and focus on the positive aspect of this proposal.

Is ILP suitable for older people?

Editor
Forum Page
Straits Times

I refer to the letter from Ms Seah Geok Hong entitled "Time Life Insurance Association spoke up" (Straits Times, 19 July). Ms Seah asked the Life Insurance Association to substantiate its claim that regular premium investment plan are suitable for older people.

I like to speak for NTUC Income and address the underlying question.

Compared to a traditional life insurance plan, an investment-linked plan (ILP) has the following advantages:

- flexibility in making regular and adhoc savings, including temporary suspension,
- choice of investment funds,
- flexibility in types and amounts of insurance coverage,
- transparency in the mortality, expense and other charges.

In choosing between different ILP plans available in the market, the consumer should look at the charges and also the investment risks in the various funds.

Older people pay a higher mortality charge for their insurance protection. However, the amount of insurance needed at the older age should reduce, as the children are older and the policyholder has probably already accumulated sufficient savings.

One way to reduce the charge is to deduct the accumulated savings from the initial amount of insurance. The premium will reduce with the lower insured amount. The policyholder also has the flexibility to terminate the insurance coverage on their retirement.

A flexible ILP plan is more suitable for today's uncertain job environment.

The policyholder will need to be properly advised on how to tailor this plan to meet their needs. NTUC Income offers free financial counselling to our policyholders using salaried insurance consultants. We will extend this free service on a limited scale to the general public.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Buy Term and Invest the Difference

"Buy Term" refers to term insurance, which is an insurance contract payable on death. The cost of term insurance is very low, as the chance of making a claim is usually less than 1%. To insure a sum of $100,000, you need to pay $500 or less, depending on your age.

Some people pay more than $5,000 on a life insurance plan to insure $100,000. This is a traditional plan that provides insurance cover and savings. When the policy is terminated at a future date, there is a cash value that is refunded. It represents a portion of the premium, accumulated with interest.

Under the "Invest the Difference" concept, the balance of the savings is invested separately. Usually, it will give a much higher return.

Insurance agents like to sell the traditional plan because they can earn a high rate of commission (up to 100%) of the annual premium, including the saving portion.

If you "buy term" separately, you only pay commission to the agent on the term insurance premium. You save commision on the saving portion.

How much to save for the future?

Someone asked for my advice: how much of my earnings should I save for the future?

My advice - you should save 10 to 15 percent of your earnings. They are for the following:

- in case you lose your job
- for unexpected medical and other expenses
- to supplement your savings for retirement

Many people think that they do not earn enough to meet their living expenses. This is not correct. If they look at how people who earn less cope with their budget, they will find that it is possible to set aside the savings.

They can cut down expenses on buying a car, or they can buy a smaller flat, or spend less on holiday or children's tuition.

It is a matter of priority.

Make some savings. Take care of your future first. Then, you can take care of others.

Third Party submit an inflated claim

Editor
The New Paper

I refer to the letter 'Premium rose after minor accident' (TNP, 13 July) by Ms Janet Chua Yah Choo.

Ms Chua said that she was involved in a minor accident recently. The damage on the third party's vehicle was small but the claim was quite substantial. As a result, she had to pay a premium loading and had her no-claim discount reduced by her insurer during the policy renewal.

Ms Chua is not insured by NTUC Income. As this is a common situation, we wish to share our current practice in dealing with this type of claim, so as to protect the interest of our policyholder.

When we receive a third party claim, we write to our policyholder with the details of the claim. We ask our policyholder to give us his feedback on the claim. If the claim is inflated, we will get a statement from our policyholder to reject or contest the third party claim. If the unjustified claim is not withdrawn, we will take legal action against the motorist who has authorised the workshop to file the claim.

If we are able to reject the claim, we will allow our policyholder to retain the No Claim Discount.

If a third party wish to make a claim against our policyholder, they are advised to go to an Idac center within 24 hours of the accident. We will assess the damages and make an offer to settle the claim expeditiously. We will also offer a cash settlement and allow the third party to find their own repair workshop.

Freddy Neo,
Senior Claims Manager,
NTUC Income

Boot licker?

Someone posted a positive comment about me, but preferred to remain anonymous. He was afraid of being accused of boot licking.

I have a way to overcome this fear.

I like to find positive things to say about other people. I am just being decent and encouraging. I am not boot licking.

We need to promote a climate of positiveness. We have to find positive things to say about other people. We have to create an optimistic climate.

I encourate other people to think positive, and be positive.

Ideal plan - best plan for an uncertain world

I wish to recommend the Ideal plan from NTUC Income as the best plan for an uncertain world.

It allows you to make regular savings when you are employed. You can top up with adhoc savings, out of your annual bonus or occasional income.

If you have a cash flow problem, you can stop your savings for a short period. There is no penalty.

Your savings can be invested in the Combined Fund from NTUC Income. It is a large, well diversified fund, have $3,500 million of assets, and is managed by 9 top fund managers.

I expect the fund to earn an average of 6% per annum over 10 years or longer, but this is not guaranteed. As it is a large and well diversified fund, the risk is reduced. A few bad investments will not affect the long term return of the fund.

Here are two additional advantage:

- you can buy insurance protection in a separate policy and pay a separate premium
- 100% of your savings is invested from the first month
- our charges are probably the lowest

To know more about this plan, you should attend our educational seminar that is held every two weeks. Call 6788 6636. Website: www.income.coop

How much does the CEO of NTUC Income earns?

Someone posted in my blog - how much does the CEO of NTUC Income earns. He wants to know about this information, following the media report on the court case by the CEO of the National Kidney Foundation.

I will give a reply on my salary at a suitable forum in the future. Maybe, this can be a question to be raised at the annual general meeting of NTUC Income. The chairman of my board of directors can address it.

I will give a hint. I earn less than 50% of CEOs of large listed companies that are reported regularly in the newspapers.

I wish to state the following:

- I fly by economy class, including long distance travel
- I drive a 8 year old Mercedes E200 and will keep it for a few more years.

I am quite frugal in spending money for NTUC Income, including paying for computer systems and management consultants. This helps us to keep our expense ratio low, and reduce the premium rates payable by our policyholders.

Yob Culture in the UK

I read that some teanagers in the UK behaved badly. It is called yob culture. "yob" is the opposite of "boy" and refers to a hooligan.

The source of this problem appears to be single parents and lack of parental supervision. The correct values are not taught to the children.

Tony Blair, prime minister of the UK, is worried about the culture of "lack of respect" and "freedom without responsibility". He is trying to promote the value of respect.

The problem is so bad, that they have to pass a law on "anti-social behaviour". I am worried that some of these behaviour are happening in Singapore.

What does a CEO do?

A CEO is:

Chief Executive Officer - everybody knows that.

However, I have to play the following additional roles:

Chief Explanation Officer - when I write in my blog or send my reply to letters in the newspaper.

Chief Excuse Officer - when I have to explain mistakes made by my colleagues, and pacify my customers

Chief Education Officer - when I conduct public seminars on insurance matters.

and finally

Chief Entertainment Officer - when I have to boost the morale of my colleagues, in facing competition and demanding customers.

It is FUN.