Issue No. 5 January - March 2011
Message from the PresidentIndustry Events
Industry NewsQ&A with Simon Newman
Q&A with Patrick Chen

Message from the President

2010 - Strong recovery for the life insurance industry

LIA PresidentThe Singapore life insurance industry performed well in 2010. Total new business grew by 16%, with several key product lines rebounding to levels before the global financial crisis. Regular premium business, which typically has higher protection element, grew by 20% to $1.1b, exceeding the business volume in 2007 and 2008.

Health and disability insurance continued to grow strongly, with more than 2.3m individuals now covered under personal health insurance plans and about 1 million policyholders aged 40 and above insured under basic and supplementary ElderShield policies.

Overall persistency rates of in-force business remained high at above 97%, reflective of the quality sales advisory services provided by various insurance intermediaries.

2010 was a busy and fruitful year for consumer education. I am pleased to report that LIA successfully implemented a comprehensive "Know Your Financial Health" programme aimed at promoting financial health of Singaporeans by raising their awareness of the importance of fact-finding in making personal financial decisions. The programme was carried out over a 13-week period via multiple touch points, namely, radio advertising, public seminars and email blasts to member companies' client base. We are pleased to note that life insurance applications with full or partial fact-find options increased by 11 percentage points to 70 percent in 2010. 

2010 was also a busy year in terms of review of industry guidelines and practices. A revised code on recruitment of tied agents with strengthened control measures was introduced. In addition, LIA also introduced new guidelines on risk management practices in respect of intermediary fraud risk.

2011 - More needs to be done to achieve the LIA vision

Our key focus for 2011 remains, namely, to promote protection and long term savings, raise industry standards and increase competitiveness and productivity.

We intend to intensify our consumer education effort riding on the success and experience we have gathered from "Know Your Financial Health" series. With the competitive employment markets, we need to strive to attract and retain corporate staff and sales advisers for our industry. We must also remain vigilant and continuously sharpen our ability to manage the long term financial soundness of our business in an increasingly volatile world.

2011 will also see us playing an active regional role. LIA will be hosting the 25th Pacific Insurance Conference, which is a premier conference series, in September 2011. We will also be co-hosting the 37th Asean Insurance Council Meetings with GIA in late November 2011. These are great opportunities for us to showcase Singapore and our industry as well as to learn from our counterparts in the region.

In conclusion

As an industry, we are acutely aware that our success will ultimately be judged by how well we fulfill our roles in helping to provide adequate insurance protection and meet long term financial needs of every individual in Singapore.

We look forward to working closely with each and every one of you to take our industry to greater heights.

Signature 

Tan Hak Leh

Industry Events

25th Pacific Insurance Conference
11 - 14 September 2011, Marina Bay Sands Singapore

Registration is open!
For Programme details and to register, go to
www.pacificinsuranceconference.org

Back from the Brink:
Seizing Today's Opportunities; Conquering Tomorrow's Challenges

Guest of Honour

Lim Hng Kiang, Minister for Trade and Industry, Singapore

Who should attend

Life insurance, retirement savings and wealth management industry leaders

  • CEOsPIC Advertisement
  • Senior Executives
  • Regulators
  • Educators
  • Specialists

Early Bird registration fee

On or before 15 June (EB)    USD 1,495 / SGD 1,950
After 15 June                           USD 1,695 / SGD 2,150 

Speakers to-date

  • Jean-Michel Chatagny, Swiss Re, Hong Kong
  • John Dacey, Japan Asia-Pacific Business Unit, France
  • David Fried, HSBC Insurance Holdings, Hong Kong
  • David Howell, Pacific Life Re, United Kingdom
  • Trevor Matthews, Friends Provident Holdings, United Kingdom
  • Gerd Obertopp, Hannover Life Re, Germany
  • Barry Stowe, Prudential Corporation Asia
  • Chris Wei, Great Eastern Holdings, Singapore
  • Joachim Wenning, Munich Re, Germany
  • James Westlake, RBC Group, Canada
  • Greg Woodring, RGA, United States

50plus Expo
1 - 3 April 2011, Suntec Singapore, Level 4, Halls 401 - 403

Uncover the best of lifestyle choices from food and nutrition, health and wellbeing, beauty and fitness to a host of spectacular attractions at the 50plus Expo 2011. With so many fun activities, great performances, amazing shopping and wonderful giveaways, make a date with your friends and family to experience it all.

Plus visit My Life, My Home show flats, the showcase for turning your house into an age-friendly functional home.

The 50plus Expo 2010 is specifically targeted at baby boomers and seniors. While the seniors market in Singapore is expected to grow to $10.8 billion by 2015, the baby boomers market is increasingly a burgeoning market with lucrative business opportunities.

LIA will be presenting a public talk at the Expo.

 50plus Expo (1 - 3 April 2011)

 Friday 1 April
 6:00 - 6:45pm
 Suntec, Level 4, Halls 401 - 403, Public Forum B (next to Inspire Pavilion at Inspire Zone) 

 Am I eligible to buy life or health insurances at senior ages and can I afford it?

 Synopsis of Talk presented by LIA
 Entry age limit for Life, Health and Disability Policies
 Other factors under consideration for acceptance by life insurance companies
 Maximum age for coverage
 Affordability - Different plans to suit different budgets
                     - Premiums payable from own Medisave; from children's Medisave

The 50plus Expo is organised by Council for Third Age. Set up in 2007, the Council for Third Age is an independent body that promotes active ageing to enable seniors to achieve a better quality of life in all the six dimensions of wellness - social, intellectual, physical, vocational, emotional and spiritual. The Council partners community and commercial organisations to develop products and services that meet the various needs and interests of seniors. 

10th LIA Annual Luncheon
2 March 2011, M Hotel Singapore

Photo 1 Photo 2
   
Photo 3 Photo 4Photo 5

This year's LIA annual luncheon was attended by Guest of Honour Lee Boon Ngiap, Assistant Managing Director for Banking and Insurance at the Monetary Authority of Singapore, and some 220 financial industry representatives.

Photo 7 Photo 8

Highlights of Mr Lee's speech

Photo - Guest of Honour

5   ...there are many lessons that we can draw from the recent financial crisis to strengthen the resilience of our financial system and financial institutions. For the insurance industry, allow me to share two broad regulatory initiatives that we are focusing on - these are in the areas of enhancing corporate governance and raising market conduct standards.

Enhancing Corporate Governance

6   ...MAS issued a set of enhanced corporate governance regulations and guidelines in December last year. The revised rules underscore the important role played by the Board and senior management in overseeing the soundness of their institutions. It places increased emphasis on the quality and effectiveness of the Board of directors in exercising risk management oversight of their institutions.

8   Let me cite an example where there is room for the Board and senior management of insurers to play a greater leadership role in setting the right tone for their organizations.

9   ...Last year, we included a stress-to-failure exercise where life insurers were required to reverse-engineer a scenario that would likely result in their wind-up. This stress-to-failure scenario requires insurers to consider their business model and operating environment, and to identify the plausible and significant risks that they could be exposed to.

10   However, stress testing at some insurers was performed mainly as an isolated exercise by the risk function, with little interaction with business areas. At some institutions, the stress tests appeared to be performed merely as a number crunching exercise in response to regulatory requirements. They did not foster debate nor challenge prior assumptions such as the cost, risk and speed with which new capital resources could be raised, or which positions could be hedged or sold.

11   MAS expects stress testing to form an integral part of the overall governance and risk management culture of insurers. Stress testing should be actionable, with results from stress testing analyses impacting decision-making at the appropriate management level, including the strategic business decisions of the Board and senior management. In the post-crisis landscape where increased volatility in financial markets looks set to stay, stress testing can be a powerful tool to help institutions focus on where the largest vulnerabilities of the firm lie. I urge the Board and senior management of insurers to step up their involvement in this area, as it critical to ensure that there is sufficient attention paid to measures that can be taken to mitigate or protect their firm from these risks.

Representative Notification Framework

13   ...Representatives constitute a vital artery of the financial advisory industry as they serve as the bridge between life insurers and customers. As such, only fit and proper individuals should be permitted to provide customers with financial advice.

14   To facilitate this, MAS launched the RNF in November 2010. Under the framework, customers can now verify on the public Register of Representatives, whether a person is authorised to provide financial advice, using the representative's number. This helps to reduce the risk of the public dealing with unauthorised individuals. As it is necessary for customers to know the representative's number before they can conduct checks on the public register, several insurers are in the process of incorporating the representative's number in the business cards of representatives and other sales documents. However, this practice is still not prevalent in the industry and I would like to encourage all insurers to do this. As part of promoting financial literacy under the MoneySENSE programme, consumers are advised to ask for the representative's number so that they can check that the representatives that they deal with are properly authorised.

16   Information on a person's track record with previous employers is key to assessing whether the individual is fit and proper. However, we have received feedback that some financial institutions do not respond to reference check requests from other financial institutions. To ensure that only fit and proper persons are allowed to operate in the insurance industry, I urge all insurers to extend their full cooperation in providing meaningful and prompt responses to reference check requests.

Fair Dealing Outcomes

18   We would like to see more financial institutions incorporating key performance indicators for achieving fair dealing outcomes in the remuneration of both their representatives as well as their senior executives. This is an important way to align the financial institutions' interest with that of their customers and incentivize the sales staff and senior executives to deliver fair dealing outcomes to customers.

Product Highlights Sheet

20   ...To allow consumers to be better informed of the risks and costs of investing in different investment-linked sub-funds, insurers will be required to include a product highlights sheet for each sub-fund at the point of sale, similar to the requirements for unit trusts. Insurers will also be required to conduct an assessment of their customers' investment knowledge and experience. Of course, this does not negate the need for consumer education and we look forward to continuing our collaboration with LIA on this.

For the speech in full, go to www.lia.org.sg

In appreciation...
 
LIA presented certificates to thank staff of member companies who served as chairpersons of their respective LIA working committees:

Convenor 1  Convenor 2  Convenor 3
  • Colin Startup, Actuarial Subcommittee
  • Ms Mala Krishnan, CPD Assessment Committee
  • Nick Czolak, Financial Advisory Subcommittee; and Taskforce on Unlisted Investment Products
  • Dr Leow Yung Khee, Group Insurance Subcommittee
Convenor 4  Convenor 5  Convenor 6
  • Ms Lee How Teck, Health Insurance Subcommittee
  • Khoo Kah Siang, Tax Subcommittee
  • Patrick Chen, Work Group on Business Contingency Plan
  • Ms Jill Hoffman, Life Protection Work Group
Convenor 7  Convenor 8  Convenor 9
  • Edwin Foo, Beneficiary Nomination Work Group
  • Ms Helen Choo, CEDLI Guidelines Review Group 1
  • Ms Lisa Kwok, CEDLI Guidelines Review Group 2

Long Service Award

  • In addition, a Long Service Award was presented to Patrick Chen, who had helmed the Work Group on FICS for more than three years. 

Launch of Great Eastern Financial Advisers

Launch of Great Eastern Financial Advisers
From left to right : Ms Jesslyn Tan, Chief Executive Officer, Great Eastern Financial Advisers; Tan Hak Leh, Chairman, Great Eastern Financial Advisers, Mrs Fang Ai Lian, Chairman, Great Eastern Holdings; Christopher Wei, Group Chief Executive Officer, Great Eastern Holdings and Ben Tan, Director, Great Eastern Financial Advisers

Great Eastern Financial Advisers (GEFA), a wholly-owned subsidiary of Great Eastern Holdings, was officially launched on 18 March 2011.

In his address, Tan Hak Leh, Chairman of GEFA said: "It gives me great pleasure to announce that Great Eastern Financial Advisers, or GEFA in short, is the first financial advisory firm in Singapore to adopt a unique business model, which combines the strengths of a major insurance company and a financial advisory firm. With rising affluence in Singapore and Singapore's position as a major financial hub in Asia, there is a growing segment of customers who are more discerning and demand wider product choices and professional advice. These customers are looking for holistic solutions to meet their protection, accumulation and retirement needs. Our highly-qualified team of consultants with their wealth of experience and in-depth knowledge are well-positioned to advise customers on all their needs, ranging from life to health to general insurance and investment. ...I would like to thank all our business partners for their staunch support and confidence in Great Eastern Financial Advisers. Together, we look forward to raising the standard of financial services to a new crescendo."

Ms Jesslyn Tan, CEO of GEFA said, "Our team of highly trained financial consultants is advisory-driven and not product-driven. They will draw from a wide portfolio of financial solutions and are committed to delivering professional and personalised solutions to help their customers achieve their goals."

Industry News

LIA Guidelines on Risk Management Practices in respect of Life Insurance Intermediary Fraud Risk (MU 55/10)

The captioned guidelines take effect from 1 April 2011.

Life Insurance Association office bearers for 2011-12

On 2 March 2011, the members of Life Insurance Association, Singapore re-elected Tan Hak Leh, Chief Executive Officer of Great Eastern Life Singapore, as President for a second one-year term. 

Serving as Mr Tan's Deputy President again is Neal Armstrong, General Manager and Principal Officer of Zurich International Life's Singapore Branch. Assuming the other Deputy President's seat is Mr Simon Newman, Chief Executive Officer of Aviva Singapore.

An industry veteran of more than 15 years spanning both the private and public sectors, Hak Leh was with the Monetary Authority in Singapore prior to his current appointment, where he was actively involved in the formulation and implementation of the risk-based capital framework for the life insurance industry. 
 
Neal took up his current position in 2009. In Dubai prior to moving to Singapore, he was responsible for the management of key distributors in the Middle East and Southeast Asia.

Simon Newman was promoted to his current position with Aviva in 2009, overseeing all aspects of the insurer's business in Singapore. Previously, Simon was with the Prudential in the UK where he was responsible for its direct distribution channels.

Q&A with Simon Newman

Simon Newman - Photo 1Newly elected LIA Deputy President, Simon Newman, clearly has the motivation and commitment to help propel the life insurance industry in Singapore forward.

"I would like to play an active role in helping the industry grow and develop, especially in delivering more transparency and clarity to policyholders.  Building consumer trust and maintaining the highest professional standards are vital to our industry. 

I would also like to see closer collaboration with MAS in enhancing industry guidelines and best practices."

Simon moved to Singapore from the UK in 2008 to take on the position as Managing Director of Aviva Singapore, with responsibility for the company's sales and marketing activities.  He describes the move as 'one of the best decisions I have ever made'.  He was promoted to CEO a year later.

He now oversees all areas of business in Aviva, where he strives to deliver distinctive solutions to customers and partners. Some of his achievements include the increase in sales during the turbulent economic crisis in 2008, and developing several innovative partnerships that have strengthened the business.

Prior to joining Aviva, the Economics and Politics graduate from Warwick University worked for more than 20 years in the banking and insurance sector in UK.

Outside of work, Simon ranks golf, listening to music, reading, travel and enjoying fine food and wine as some of his leisure pursuits. He winds down at the end of each day by catching up with his wife Trudy, with whom he shares a 32-year marriage.  They have two sons, 31 and 28.

Simon Newman - Family Photo

We caught up with Simon and asked him to share his thoughts on Singapore and about life beyond work:

Q: The good, bad or ugly about Singapore 

The climate, the food and the people - we absolutely love.  The infringement on one's private space - not so much. 

Q: Your strengths?

I believe I can balance my priorities - between people, tasks, short term and long term goals, big picture and details.  I also have drive, commitment and a very positive outlook on life!

Q: Tell us a little-known fact about yourself.

I was a husband and a father at 18!

Q: A couple of my proudest moments were....

Getting married 32 years ago to my wife Trudy (who is a teacher), and going on the first golfing holiday with my two sons in Wales, a few years back.

Q: Complete the sentence:  I love life because....

It's different every day, and there is always more to do and experience than you can imagine.

Q&A with Patrick Chen

Patrick ChenPatrick Chen, Executive Vice President of Great Eastern Life, has had the challenging task of driving the Financial Industry Competency Standards (FICS) project, which aims to raise competency standards among insurance practitioners.

"I started on the FICS project when it was first set up. It was an uphill task to develop the competency standards framework without precedent. I do however feel fortunate to have been part of developing an objective measurement that will benefit the industry.

There is still the challenge of gaining greater acceptance by the industry workforce, but I hope in time more companies will participate."

The industry veteran's contribution towards the advancement of the insurance industry has not gone unnoticed. He was duly honoured with the LIA Long Service Award this year.

Asked about this, Patrick said: "I was pleasantly surprised. I commend LIA for giving recognition to volunteers who undertake additional work on top of their daily responsibilities.  I am also very grateful for the guidance and support I received from the LIA Secretariat and the members of my committees."

In his role at Great Eastern Life, he oversees activities in the Operations department, including new business underwriting, claims processing, and customer servicing. He enjoys the variety he finds in his work, and aims to deliver excellent support to the sales force and top-notch service to customers.

Patrick usually ends his work day with a few drinks with friends. Married for 32 years to Mee Yin, he is dad to daughters Patricia, 22, and Jean, 21.

Patrick and his wife Patrick's daughters

Here, Patrick shares a few facts about himself:

Q: What drives you?

The mission to build the best operations department.  Achieving this would allow us to support the sales force more effectively, minimise business problems and make working life more enjoyable.  I also want to promote professionalism and upgrade staff skills, so that we can continue to serve an increasingly discerning clientele.

Q: What do you do for leisure? 

I play badminton a few times a week, which is great for exercise and at the same time socializing with friends.  I also enjoy going to the movies on the weekends.

Q: Tell us a little-known fact about yourself.

Like my father, I enjoy reading spiritual books.

Q: One of my happiest moments was....

Watching my two daughters grow up.

Q: I love life because....  

It is wonderful and cannot be fully appreciated in one lifetime.

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