9 Feb 2011
Singapore, 9 February 2011 – NTUC Income, Singapore’s leading insurer, today reported a set of exceptional results for 2010 across all lines of business. This is anchored on a multi-channel strategy which does not rely on a traditional multi-tiered, high commissioned agency force.
NTUC Income chalked up a 22.3% growth in 2010 premium revenues to $3.7 billion for 2010, the highest in its 40 year history.
Weighted life insurance new business premiums across all channels jumped to $344.1 million from $275.2 million in 2009. Weighted life insurance new business premiums market share increased from 19.3% in 2009 to 20.8% in 2010. Sales were generated from tied agency* $174.2 million (50.6%), bancassurance $87.2 million (25.4%), financial advisors $37.1 million (10.8%) and direct & salaried sales force $45.3 million (13.2%). Three years ago tied agents contributed 81.1% of total sales. (* NTUC Income’s tied agency is not multi-tiered and its total agency compensation is amongst the lowest in the industry).
Sales through NTUC Income’s bancassurance channel jumped about two-and-a-half times to $87.5 million in weighted new premiums on the back strong alliances with local and foreign banking giants operating in Singapore. These banks, as a channel, generated 25.4 % of NTUC Income’s overall premium revenues in 2010, compared with a negligible base two years ago.
On the results, Chief Executive Tan Suee Chieh said: “Our results reflect the success of our multi-channel strategy which we have implemented over the past three years. The heart of this strategy is about providing choices to customers.”
Further, commenting on recent media reports relating to the insurance industry, Mr Tan said: “Over the last 10 years, the size of the tied agency force in the industry has not grown and this is unlikely to change in the future, given customers’ preferences and the alternatives available to them. Given the stagnant pool of the tied agency force, insurers have resorted to poaching recently. However, we do not participate or endorse the poaching of agents as we believe it will lead to churning, resulting in higher costs for customers.
“We believe that customers’ interest should come first and we support all initiatives that enhance professionalism of the industry. Our recent implementation of the Representative Notification Framework (RNF) was smooth,” he said. RNF is an initiative by the Monetary Authority of Singapore to create a public register comprising financial representatives so as to improve transparency and accountability.
Motor Insurance Bucks Industry Trend
NTUC Income, the largest motor insurer, which was combating issues plaguing the industry such as fraudulent claims and unsustainable premium rates, registered a 3.5% growth in premiums to $244.4 million. In 2010, NTUC Income registered a major turn in underwriting results with the motor insurance business continuing to grow from strength-to-strength, NTUC Income will make a one-off $50 rebate to about 100,000 private car owners who will be renewing their policies in 2011. This will result in a total payout of about $5 million.
The motor insurance business has experienced three challenging years, a result of widespread inflated claims and unsustainable premium rates cause by aggressive competition. As a result, NTUC Income undertook a series of improvements, including revising premium rates, improving the risk selection process and tightening claims controls.
The company’s focus is to continue to make a reasonable profit so as to ensure business sustainability while improving its operational excellence.
Sharing with Singapore
NTUC Income remains committed to its “Made Different” proposition, which aims to improve the lives of Singaporeans. In 2011, NTUC Income will introduce a series of initiatives which will be an extension of its OrangeAid flagship effort, announced in October 2010. NTUC Income will commit 1% of its annual insurance operating profits to adopted charities. Based on the insurer’s 2010 financial performance, the annual contribution is expected to amount to $1.6 million.
Having the intertwined goal of combining financial contributions with volunteerism, NTUC Income will launch a major fund-raising initiative to help disadvantaged children and youth in Singapore.