10 Apr 2008
NTUC Income Offers Some of Market’s Best Yields for Life Insurance
Continues to set industry standard on transparency by disclosing actual yield
SINGAPORE, Thursday, 10 April 2008 -- NTUC Income continues to be among the top players in the insurance industry, offering some of the best yields in the market. It announced today yields of around 6 percent for endowment assurance policies maturing in 2008, and 5 percent for whole life policies taken out 25 years ago.
Income has also continued to set the industry standard on transparency, by remaining the only insurer to disclose actual yields for policies taken out 10 to 30 years ago, and maturing or being cashed out in 2008 (see Appendix). The company declared a bonus of $1,061 million in sum assured amount to customers with participating life policies in 2008. Income also made a payment of $1,060 million in claims in 2007, up 12 percent from the preceding year. NTUC Income Chief Actuary Ken Ng attributed the strong returns to Income’s investment policy, which is anchored on value in the long term and broadly diversified across asset classes and geographic regions.
“Despite the market turbulence caused by sub-prime credit issues last year, our investment returns were healthy due to our emphasis on sound asset allocation, keeping operating costs low and maximising value for policyholders as a co-operative,” he said.
Mr Ng added: “We have also demonstrated our commitment to being Singapore’s most trusted insurer, by remaining the only market player to publish actual yields on our life insurance and endowment policies. Doing so lets us meet a growing desire among Singaporeans to make more informed decisions on their financial planning – in turn helping us stay relevant by keeping up with their evolving needs and aspirations.
Said NTUC Income Chief Executive Tan Suee Chieh: "As Singapore’s leading social enterprise, Income will continue to serve its social purpose by providing Singaporeans with products that are affordable, accessible and sustainable. This has to be supported by a sound commercial approach to doing business, which will let us maintain our financial strength and commercial viability."
In announcing the latest set of figures, the company said it is increasing the special bonus on policies incepted after 1993 while adjusting its annual bonus. Although the total bonus value remains unchanged for the majority of Income policyholders, the quantum of their special bonus will be increased over time, while their annual bonus will be proportionately reduced. This change will align Income to the industry and give it greater investment freedom to invest in higher yield assets, with the objective of achieving higher returns and better benefits for policyholders.
Annual and special bonuses are methods used to distribute profits to participating policies, with the first added yearly to the policy and the second paid only upon death, maturity or surrender. Looking ahead, Income will continue to make projections based on standard asumptions and conventions practised by the industry. Based on these practices, surrender and maturity values, as well as death benefit, are likely to be in line with the past or may increase marginally. Income will be writing to policyholders to inform them of their projected benefits before and after the increase in special bonus.
About NTUC Income
NTUC Income is the only insurance co-operative in Singapore. It is a national icon, built on strong and sound business principles. Established in 1970 in response to the growing need for affordable insurance, it has become a leading life, health and general insurer.
In staying true to its social mission to offer affordable, accessible and sustainable insurance to all, NTUC Income has earned the trust of 1.8 million customers from all strata of society.
It has been rated “AA” by independent credit ratings agency, Standard & Poor’s since 1999, the highest accolade given to a domestic insurer in Asia, reflecting a strong financial profile, flexibility and capacity to meet new challenges. The organisation's corporate philosophy, "Social in Purpose, Commercial in Approach" means that even while aiming for commercial leadership, it places people at the heart of the decision making process.