Issue No. 26 April - June 2016
Message from the PresidentIndustry Events
Industry NewsQ&A with Tony Chow

Message from the President

LIA President - Dr Khoo Kah Siang

Positive start for life insurance industry in 2016
- Growth in single premium and annual premium business in the first quarter

Our life industry achieved a total of $682.1 million in weighted new business premiums[1] for the first quarter of 2016, a five per cent increase compared to the first quarter of 2015.

Compared to the same period in 2015, the industry also recorded: 

  • a five per cent increase to S$466.2 million in weighted annual premiums; and
  • a six per cent increase to S$215.9 million in weighted single premiums, of which
    • single premium par and non-par products comprised 79 per cent
    • CPFIS-included products comprised 13 per cent

The total sum assured for new business rose strongly by 11 per cent, totalling S$22.1 billion as compared to the same period in 2015.

We are encouraged by the first quarter results which continued from strong growth seen in 2015. Life insurers have stepped up to the change in regulations and market demand well, and will continue to innovate to deliver life insurance solutions and services that meet the needs of consumers.

More disclosure of information
In our efforts to boost transparency and communication with the public, LIA Singapore will also be providing the quarterly industry performance results on our website.

Health Insurance
With effect from 1 January 2016, the MediShield Life premiums will be excluded from LIA statistics.

Under this revised basis, new health insurance premiums totalled S$47 million, of which S$38 million were from Integrated Plan (IP) premiums and IP riders, and the remaining S$9 million were from other Medical Plans and riders.

As at 31 March 2016, the total premium for Individual Health Insurance in-force business totalled S$1,271 million, with approximately one in two individuals in Singapore (2.84 million lives) insured.

Looking forward
With the launch of the Standard IP on 1 May 2016, we believe more Singaporeans will get medical insurance plans that meet their needs and are affordable at the same time. It continues to be LIA Singapore's top priority in 2016 to work towards keeping health insurance affordable for everyone.

Khoo Kah Siang

_____________

[1] Weighted new business premiums measures premiums collected on new policies by taking into account (1) 10 per cent of the value of single premium products, (2) all of a year's premiums for annual premium products, and (3) adjusted value for products with premium payment durations of less than 10 years.

The figure is calculated as follows: 10% Single Premium Insurance + 100% Annual Premium Insurance + Adjusted premium for Insurance with premium payment durations of less than 10 years

Industry Events

IBF Connect (Financial Planning) 2016
Industry Launch of IBF Standards for Financial Planning
22 April 2016

Ms Merlyn Ee IBF CEO and LIA President
Audience
Group Photo
Panel Discussion
Participants 1 Participants 2

The Institute of Banking and Finance Singapore (IBF), the national accreditation and certification agency for financial sector competencies, in close partnership with the key industry associations in the financial advisory industry, launched a new set of competency standards for financial planning, at the IBF Connect seminar held on 22 April 2016.

Keynote Address by Ms Merlyn Ee, Executive Director
Capital Markets Intermediaries Department I, MAS

Scaling New Heights - Building New Competencies for Tomorrow

Distinguished guests, ladies and gentlemen

Introduction
1   Good afternoon. I am delighted to join you today and congratulate the Institute of Banking & Finance (IBF) on the launch of the Financial Planning Competency Standards.

Opportunities for financial advisers
2   The new IBF standards come at a time of opportunity for the financial advisory industry.

3   With greater financial awareness, Singaporeans are becoming more active in planning for their financial future. They will benefit from help and guidance in planning for their life goals, including setting up a family and preparing for retirement.

4   There is an increasing focus on proper retirement planning as Singaporeans are living longer than ever before. Improvements in medical care are leading to longer life expectancy. Over the last three decades, life expectancy has risen from 76 years to 85 years for women and from 71 years to 81 years for men.  Life expectancy is expected to increase further in the years to come. This is a good thing.

5   But in order to enjoy our golden years we need to ensure we have adequate finances. This will mean that we need to start financial planning early and take advantage of the power of compounding. However, not many people have done so. Some of us may not know where to start or understand what options we have. This is even more challenging amid an uncertain economy and an abundance of choice given an expanding suite of financial products offered by financial institutions.

6   This is where financial advisers have an important role to play to help Singaporeans develop proper plans to balance their immediate financial demands, medium-term financial goals and future retirement needs.

Staying relevant by offering trusted, objective and holistic advice
7   A recent survey conducted by the Financial Planning Standards Board and released by the Financial Planning Association of Singapore (FPAS) revealed that consumers have strong interest in seeking financial advice for their retirement and investment planning. However, one key barrier for them is not knowing who to trust. Financial advisers can better serve their clients and build trust by putting the interests of their clients first, focusing on their needs and providing objective and holistic advice.

8   A financial adviser will be able to gain a competitive advantage if he goes beyond making product recommendations, towards advising clients on an integrated strategy to meet their financial goals and needs at different stages of life, such as getting married, buying a home, starting a family, or preparing for retirement. All of us will need a different plan because it has to take into account our personal goals, financial situation, values and risk tolerance. Consumers will naturally seek out advisers who are able to offer advice tailored to helping them meet their needs and achieve their aspirations.

9   In order to provide holistic advice, financial advisers will have to upskill and develop competencies in this area. They also need to keep abreast of changes in the financial industry as there are always new products, trends and regulations that will impact the quality of advice they dispense to their clients.

10   Even experienced professionals will find it useful to undergo regular training. This will provide them with a more complete understanding of financial planning, equip them with the skills to meet the increasingly complex needs of Singaporeans, and help them to expand the range of clientele they can serve, to include groups such as business owners and high net worth individuals.

Enhancing competencies among finance professionals
11   At the national level, the Government has been taking active steps to help workers upgrade themselves and stay relevant. The SkillsFuture initiative allows Singaporeans from all walks of life to develop to their fullest potential by giving them the opportunity to sign up for courses and training programmes. Through SkillsFuture, individuals will be able to deepen their skills in their chosen field or job.

12   For the financial advisory sector, MAS has introduced measures so that financial advisers can meet the evolving needs and expectations of consumers.

13   Under the Financial Advisory Industry Review (FAIR), we have introduced requirements for continuing professional development (CPD). To help financial advisers remain current and up-to-date in their knowledge of market and regulatory developments, they have to undergo structured CPD training every year. This includes training in ethics, rules and regulations.

14   MAS is also reviewing the Capital Markets and Financial Advisory Services (CMFAS) Examinations, to ensure their continued relevance for professionals working in the capital markets and financial advisory services industries. We have plans to introduce content on ethics and skills so that representatives can better serve their clients. The CMFAS Examinations will also be redesigned to allow greater customisation to the job functions of representatives. Examination modules catering to the core roles of representatives will be expanded to cover ancillary functions. This will allow representatives to take fewer modules compared with the current requirements to take separate modules for each regulated activity. We also aim to provide flexibility for representatives to take multiple product knowledge modules in a single sitting, if they wish. MAS will be consulting on these proposals in due course.

IBF Financial Planning Competency Standards
15   I am heartened that the financial sector is joining us on this journey to enhance competencies in the financial advisory sector.

16   The newly-launched IBF Standards for Financial Planning is an excellent example of a collaborative effort with the industry.

17   The IBF Standards aim to instil high standards of ethics and professionalism so that financial advisers can earn the trust of their clients. The Standards will also help financial advisers to foster deep technical competencies, and further enhance their capabilities to offer quality financial advice to their clients.

18   The Standards will allow financial advisers to upgrade themselves no matter how many years they have already spent on the job. For new practitioners, the "IBF Qualified" certification enables them to develop foundational knowledge of ethics, laws, regulations, and financial products. They will also pick up technical skills relating to cash management, insurance, investments and retirement.

19   For senior practitioners, the "IBF Advanced" certification will help them to attain more complex skills such as providing advice on business ownership and estate planning.

20   The IBF Standards will also enable aspiring team leaders and managers preparing for supervisory roles to further enhance their capabilities to manage teams and provide supervisory oversight of their colleagues. This includes adopting a Balanced Score Card approach in performance management, and using risk monitoring techniques to ensure high standards of professionalism for their teams.

21   IBF has worked closely with FPAS, the Insurance and Financial Practitioners Association of Singapore (IFPAS) and the Singapore College of Insurance (SCI) to confer the IBF-accreditation status on the widely-recognised Certified Financial Planner (CFP) and Chartered Financial Consultant/Singapore (ChFC/S) qualifications awarded by FPAS and SCI respectively. Practitioners who successfully obtain these professional designations from 2016 onwards will be eligible to apply for "IBF Advanced" certification.

IBF Financial Planning Working Group
22   I would like to take this opportunity to express our appreciation to IBF's Financial Planning Working Group, which was previously led by Mr Tan Hak Leh and now by Dr Khoo Kah Siang. The Working Group consists of senior professionals from the financial advisory sector and industry associations, including FPAS, IFPAS, the Association of Financial Advisers (Singapore) (AFAS), and the Life Insurance Association, Singapore (LIA). The Working Group worked tirelessly to develop a comprehensive and well-designed set of competency Standards. The members tapped on their experience to ensure that industry best practices were reflected in the Standards. They also adopted a forward looking approach and incorporated emerging developments, such as financial planning for business owners, in the Standards.
 
Support from employers
23   I am pleased that the financial advisory industry has shown its support for the IBF Financial Planning Standards. Financial institutions such as AIA Singapore, AXA Life Insurance, Great Eastern Life, Great Eastern Financial Advisers, IPP Financial Advisers, NTUC Income and Prudential Singapore have committed to adopt the Standards as part of their training roadmap for their advisers.

24   We strongly encourage banks, as well as more insurance companies and financial advisory firms, to join these early adopters to leverage on the IBF standards to equip your advisers with broad-based and in-depth capabilities to enhance their financial advisory careers.

25   Financial advisers should also take the initiative to invest in skills upgrading by enrolling in IBF's accredited training courses, and undertaking the IBF certification pathways.

Conclusion
26   In closing, I would like to again commend IBF and its Financial Planning Working Group for your excellent work on the IBF Financial Planning Standards. This is indeed a major milestone, for it is the first time the financial advisory industry has come together to develop a set of common competency standards for industry professionals.

27   I look forward to these standards becoming the benchmark for professionalism, competence and trust for financial advisers in the years to come.

28   Going forward, we welcome more initiatives from the industry to complement MAS' efforts to continually upgrade the capabilities of our financial advisers, so as to meet the evolving financial planning needs of Singaporeans.

29   Thank you, and I wish you a fruitful afternoon ahead.

A Roadmap for Professional Excellence
The IBF Standards for Financial Planning provides a structured professional development roadmap and certification pathway for financial advisers (FA). They are the result of an industry partnership among the key industry associations in the financial advisory industry. This represents the first time that the financial advisory industry has come together to agree on a common set of competency standards for the industry.
 
The IBF Standards for Financial Planning provides a comprehensive competency roadmap for financial advisers. Besides covering core skills in constructing holistic financial plans and developing deep technical skills relating to cash management plus insurance, investment and retirement planning, the IBF Standards for Financial Planning introduces several new competency areas in guiding an FA's professional development:

  • Financial planning for High Net Worth Individuals
    Analysis and development of bespoke insurance and investment solutions for HNWIs
  • Financial planning for Business Owners
    Corporate financial statement analysis, business ownership implications on personal income and wealth
  • Management of FA representatives
    Using a Balanced Score Card approach in performance management, coaching of FA representatives to ensure quality of financial advice, risk monitoring and control procedures to ensure high standards of professionalisms
  • Ethical principles in financial advisory process
    Client data protection, management of conflict of interest, transparency and disclosure

Dr Khoo Kah Siang, President of LIA, said, "The life insurance industry spearheaded the collaborative development of the IBF's new Financial Planning Standards. In a rapidly evolving market, we strongly encourage financial adviser representatives across all distribution sectors to upgrade or refresh their skills and knowledge through this certification. We wish to see the IBF Financial Planning certification becoming the national brand of professionalism, competence and trust among the public and consumers."

Manulife Singapore wins customer service award for third consecutive year
3 June 2016

Manulife Singapore has received the "Contact Centre of the Year - Insurance (Under 20 Seats)" Award in the 2015 International Customer Relationship Excellence (CRE) Awards for the third consecutive year.

Organised by the Asia Pacific Customer Service Consortium (APCSC), the International CRE Awards aims to recognise outstanding companies and individuals in the Asia-Pacific region for their achievements in service quality and customer relationship excellence.

This year, two of Manulife Singapore's customer service executives were also recognised in the Individual category. Ng Han Chong clinched the Customer Service Professional of the Year (Service Center) - Winner award, while Cai Yishan received the Customer Service Professional of the Year (Contact Center) - Merit award.

Mr Naveed Irshad, President and CEO of Manulife Singapore said:

"We are delighted to receive the 'Contact Centre of the Year - Insurance (under 20 seats)' Award for the third consecutive year, which affirms our continued efforts to provide the highest standards of service to our customers.

We endeavour to put our customers at the heart of everything we do and this accolade from APCSC will inspire us to work even harder to provide an unsurpassed experience to our customers across all their interactions with us.

I would also like to congratulate two of our team members, Han Chong and Yishan, for their wonderful achievements in being honoured among the best customer service talents in the region."

Manulife Singapore at CRE Awards Ceremony
Manulife Singapore recognised at the International Customer Relationship Excellence Awards Ceremony in Hong Kong

The Good Life Co-operative Conference
Shangri-La Hotel Singapore
10 June 2016
 
Theme: Cost of a sustainable healthcare ecosystem - Who pays what?

Mr Chee Hong Tat - Minister of State of Health Dr Carol Tan - TGLC Chairman
Dr Khoo Kah Siang - LIA President Ms Angela Hunter from Prudential - LIA Speaker
Panel Discussion
Audience
Participant 1 - Dr Leow from Great Eastern Life Participant 2 - Ms Lee How Teck from Aviva
Participant 3 - Ms Mimi Ho from Regulatory Professionals Swiss Re Booth
TGLC Conference Event

The Good Life Co-operative (TGLC), in collaboration with the Life Insurance Association, Singapore (LIA Singapore) and Swiss Re held The Good Life Co-operative Conference 2016.

The conference highlighted the impetus to address rising healthcare costs through a tripartite partnership between policy makers, healthcare providers and insurers. Graced by Mr Chee Hong Tat, Minister of State for Health, the TGLC Conference advocated the need to create a sustainable healthcare ecosystem and the management of medical inflation against the backdrop of Singapore's ageing population and increasing healthcare costs, as well as share international best practices.

"We have seen a clear trend of escalating healthcare costs over the last few years. Responding appropriately to this challenge necessitates a critical re-appraisal of the respective roles of each stakeholder, as well as how they can effectively work together in maintaining a healthcare system that is robust, resilient and sustainable. Beyond simply raising awareness, the goal of the conference is to determine what we each, as stakeholders, can do to promote affordable and good healthcare for all," said Dr Carol Tan, Chairman, TGLC.

In support of multi-stakeholder collaboration to better address cost escalation over the long-term, Dr Khoo Kah Siang, President of LIA Singapore, said, "LIA believes that central to sustaining an ecosystem of healthcare providers and practitioners, and insurers that is able to provide quality and accessible healthcare, is the need to work together on data collection and monitoring of healthcare costs in more effective ways than what is currently available. Having access to the average costs of care, for example, will reveal healthcare consumption patterns and charging trends, which will help to identify possible solutions to keep healthcare affordable. Insurers will also be able to leverage such data to improve claims management."

Claims inflation for IPs have also been ranging between an average of 12 to 17 per cent per year since 20111, and higher claims inflation may result in the need for premium increases to ensure that it remains commercially viable for IP insurers to continue providing these policies.

In a Swiss Re report on Care Solutions in Asia, it was observed that Singaporeans feel that they are underprepared for future care needs, for themselves and/or their parents, and not being able to afford future care needs was the top concern among Singaporeans2.

"There are emerging stresses due to Singapore's ageing society, combined with rising incidences of chronic diseases. The current financing system to gain access to immediate and high quality healthcare is too dependent on household income and is unsustainable in the long-term. There is an urgent need for the insurance industry to work together with the government and healthcare providers to find solutions to finance the healthcare needs of Singaporeans. One way is to look at developing innovative methods to help Singaporeans remain healthy and active even as our average lifespan increases. This year, we are partnering with TGLC on The Good Life Co-operative Conference which is a step in the right direction, bringing together key stakeholders to discuss how we can work together to make the society more resilient," said Winnie Ching, Head of Health & Medical Solutions, Life & Health Asia, Swiss Re.

Key topics of discussion at the TGLC Conference 2016 included:

  • Managing Healthcare Costs: A Tripartite Approach
  • Economics of Healthcare: Sustainable Financing of our Future Needs
  • The Ethical Aspects of Cost Containment
  • Keeping Healthcare Affordable for all Singaporeans
  • Improving Healthcare Delivery through Partnership

LIA was represented by Ms Angela Hunter from Prudential who spoke on "Keeping Healthcare Affordable for all Singaporeans".

1 "Rising health insurance claims threaten all", The Business Times, 17 Aug 2015.
2 Source: Spotlight on care solutions in Asia, Swiss Re, 2015

Industry News

LIA Guidelines issued

29 March 2016
MC 30/16 - REPEAL OF MU 8/96 ON AUTHORISATION CARD FOR AGENTS

15 April 2016
MC 41/16 - LIA REFERENCE CHECK FORM (RCF): CLARIFICATION FROM MAS ON A&H CPD HOURS 

18 April 2016
MC 42/16 - ACTING AS REPRESENTATIVE UNDER FAA: CLARIFICATION FROM MAS ON CONCURRENT ENGAGEMENT AND THE CONSENT REQUIRED

26 April 2016
MC 44/16 - YOUR GUIDE TO HEALTH INSURANCE (YGTHI): MAY 2016 EDITION
MC 45/16 - INFOGRAPHIC "EVALUATING MY HEALTH INSURANCE COVERAGE" MAY 2016

6 May 2016
MU 56/16 - REFERENCE CHECK FORM (RCF) 

9 May 2016
MC 48/16 - IPTO'S UPDATE ON TEMPLATE FOR POLICY DETAILS OF BANKRUPTS

25 May 2016
[CLARIFICATION] MU 57/15 - INTEGRATED SHIELD PLANS: REINSTATEMENT GUIDELINES EFFECTIVE 1 NOVEMBER 2015

30 May 2016
MC 55/16 - LIA GUIDANCE NOTES ON HANDLING POLICYHOLDERS WHO LACK OR MAY LACK MENTAL CAPACITY [UPDATED]

Aviva wins MINDEF-MHA joint tender
21 June 2016

Aviva has been selected as group insurer for the Ministry of Defence (MINDEF) and Ministry of Home Affairs (MHA).

Aviva has insured servicemen and employees of MINDEF since 1983.  Under a new agreement, Aviva will now insure MHA personnel as well, which together will be the largest group scheme in Singapore.

Named MINDEF & MHA Group Insurance, this scheme will consist of a core and a voluntary component.  It covers all servicemen from the Singapore Armed Forces (SAF), Singapore Police Force (SPF) and Singapore Civil Defence Force (SCDF), as well as public officers working in MINDEF/SAF, civilian staff working in MHA, and DSTA employees.  Dependants are eligible as well.

On being awarded the contracts, Nishit Majmudar, CEO of Aviva Singapore, said, "We have been providing insurance coverage for the Singapore Armed Forces (SAF) servicemen since 1983.  We are honoured and delighted that we have been chosen as the appointed insurer once again for MINDEF and SAF, and have also been appointed as the insurer for MHA, to help in recognising their servicemen's contributions to national defence and security, and in strengthening their care of them.  This is a strong vote of confidence that reinforces Aviva's position as a leading group insurer in Singapore."

Q&A with Tony Chow

Tony Chow - Chief Executive of China Life Insurance (Singapore)

Mr Tony Chow graduated from Concordia University, Canada with a degree in Commerce.

Mr Tony Chow's career in the financial services industry spanned over 20 years. Prior to joining China Life Insurance (Singapore) Pte Ltd, he held one of the key positions at China Life Insurance (Overseas) Company Limited where he built and led one of the key distribution channels there. While assuming his previous role as Deputy General Manager at China Life Insurance Singapore, he was also instrumental in facilitating the smooth operations of the Singapore office, focusing on developing and strengthening the distribution network, as well as building the company's brand profile.

What are some of your career highlights?

Building and leading a business unit that vastly contributed to the company's business performance and transforming the high net worth business at China Life Insurance Overseas to be a key premium driver, was certainly one of my career highlights.

Of course, my role as the Chief Executive of China Life Insurance (Singapore) Pte Ltd is one of my career milestones. This role gives me both the breadth and depth as a leader to grow and establish a relatively new life insurance company in Singapore.

Do you have a personal philosophy for life/career that you strongly believe in?

It is to uphold integrity, trust and transparency in everything I do, and how I would manage my personal and professional relationships as well. As a leader, demonstrating fairness by sharing views with my counterparts and treating everyone with respect are especially dear to me.

Who are your inspirations in life?

I am an avid soccer enthusiast, and my inspiration in life is David Beckham. I find it remarkable how David Beckham overcame his nemesis after he was sent off in 1998 World Cup and still persevered in his football career in the face of public lashing against him, and eventually brought England into the quarter final in 2002 World Cup as the captain of the England team.

To me, he is also a role model to many with his philanthropic work as a Goodwill Ambassador of Unicef. What I admire about him most is his pro-family value as he juggled his time between a demanding and successful career and spending quality time with his family.

Complete the sentence: "I love my job because ..."

I love my job because I embrace the challenges and immense opportunities that my current role offers. More importantly, I am privileged to work with a great and supportive team, and all of us embody the same value - helping each other to succeed to help the company succeed.

The ability to learn and grow, as well as the camaraderie from my management team and staff, does not make me feel that my job is a job. As the old saying goes, "If you do what you love, you'll never work a day in your life."

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