Dear Mr. Tan,
May I be permitted to make an observation. The new management of Income missed a wonderful opportunity to show that they can embrace the true spirit of being a cooperative and win over the loyalty of over 1 million policyholders that you have built up over the past 30 years.
How? The excellent investment yield in 2006 and 2007 gave them the chance to restore back all of the bonus cuts since the Asian financial crisis. Why did I say this? I read that the investment yield over the past 10 years is 7.8% and that is more than the yield of 6% that was used to project the bonus rates during these years.
I am rather sad that they did not take this opportunity to re-establish their credentials. Instead, they appear to be trying to hide the profits from the policyholders, and give less than what the actual experience would really allow. How disappointing. What are your views, Mr. Tan?
JK
REPLY
I agree with your views. Indeed, if they have restored the past bonus cuts, and they have the surplus to do so, they would have placed NTUC Income is a strong marketing position. This is a reputation that is more valuable than the millions of dollars spent on advertising.
They still have the chance to change their strategy and adopt this "restore the bonus cut". I hope that the board will do so.
Wednesday, July 2, 2008
Disclose the Asset Share of the Policy
A COMMENT POSTED IN MY BLOG
Hi --
NTUC Income says, "We don't have the money to pay higher bonuses."
Mr. Tan says, "Based on your high stated yield, it sure looks like you do."
How to know for sure?
As Mr. Tan has pointed out before, it is easy. Simply disclose NTUC Income policyholder fund's "asset share" (for each of its policyholders), as required in other countries like Malaysia, Australia, UK and South Africa.
That would give us the answer. At the moment, there is no way for policyholders to know if NTUC Income is holding back on bonus payments or not.
NTUC Income says it is not -- but declines to provide documentation.
Why? Why not reveal each policyholders' asset share? It is easy to do. There is adequate precedent in other countries for doing it. Everyone agrees it would increase transparency of the policyholders' fund.
Those are rather good reasons for disclosure.
Perhaps NTUC Income can state its reasons for non-disclosure.
Sincerely,
Larry Haverkamp
Hi --
NTUC Income says, "We don't have the money to pay higher bonuses."
Mr. Tan says, "Based on your high stated yield, it sure looks like you do."
How to know for sure?
As Mr. Tan has pointed out before, it is easy. Simply disclose NTUC Income policyholder fund's "asset share" (for each of its policyholders), as required in other countries like Malaysia, Australia, UK and South Africa.
That would give us the answer. At the moment, there is no way for policyholders to know if NTUC Income is holding back on bonus payments or not.
NTUC Income says it is not -- but declines to provide documentation.
Why? Why not reveal each policyholders' asset share? It is easy to do. There is adequate precedent in other countries for doing it. Everyone agrees it would increase transparency of the policyholders' fund.
Those are rather good reasons for disclosure.
Perhaps NTUC Income can state its reasons for non-disclosure.
Sincerely,
Larry Haverkamp
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