LIA 50 th Anniversary Gala Dinner

Transcription

1 LIA 50 th Anniversary Gala Dinner Swissotel The Stamford, Singapore 26 March 2012 Address by Mr Tan Hak Leh, President of the Life Insurance Association, Singapore Guest of Honour, Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, distinguished guests, ladies and gentlemen 1. Good evening and a very warm welcome to LIA's 50 th Anniversary Gala Dinner. 2. For an industry that prides itself on providing life-long protection to its customers, 50 years may not seem like an exceedingly long period, especially given the increasing average life expectancy of Singaporeans. Many of the whole of life policies that we issued 50 years ago to newborns then have just crossed the mid-point not too long ago. 3. Nevertheless, LIA's 50 th anniversary is an important milestone for all of us. It is a great opportunity for us to reflect upon what we have gone through and to look into the future. 4. Before I do that, I would like to thank all members of LIA for entrusting Kevin, Chris and myself with the responsibility to lead this esteemed organisation. It is a great privilege and we will do our utmost to serve the association. 5. I would also like to thank all our guests for joining us on this special occasion. Special thanks must go to all of our Past Presidents, and especially the nine who are with us this evening, namely, Mr Tan Kin Lian, Mr Allen

2 Pathmarajah, Mr Andrew Tan, Mr Law Song Keng, Mr N Ganesan, Mr Tan Suee Chieh, Mr Tan Beng Lee, Mr Raymond Kwok and Mr Darren Thomson. 6. LIA was first registered in 1962 as a not-for-profit trade association for the life insurance industry in Singapore. Our vision is to provide individuals with peace of mind and to promote a society where every person is prepared for life s changing cycles and unforeseen situations. We are committed to being a progressive life insurance industry by collectively enhancing consumer understanding, promoting industry best practices, and through the association fostering a spirit of collaboration and mutual respect with government and business leaders. Development of life insurance industry 7. Over the last 50 years, the life insurance industry in Singapore has transformed itself into one of the most developed in the region, as Singapore moved from a third to first world nation. We benefited tremendously from Singapore s strong economic growth and social and political stability, both of which are critical pre-conditions for a thriving life insurance industry. The robust insurance regulatory framework in Singapore that sets out prudent financial management rules and high standards of business conduct practices, without curbing innovation and market competition, has helped foster strengths and resilience that have enabled us to weather numerous crises over last few decades. 8. Our industry has grown both in breadth and depth. In terms of distribution of our products and services, we moved from a single to multiple channels. As recently as 20 years ago, we relied almost entirely on the agency force. Today, consumers have more choices as our products are also widely distributed by most banks and financial adviser firms. Over this period, the agency channel, which remains the pre-dominant channel especially for protection-oriented products, has achieved substantial progress in productivity and professionalism. The average productivity of an insurance agent today is $75,000 in new business weighted premium per annum, almost three times Page 2 of 5

3 higher than the average productivity of $26, years ago, while the total number of agents remains fairly constant. 9. We have also seen significant broadening of product solutions to meet wider consumer needs and market segments. Most notably, individual health insurance that didn't quite exist 15 years ago is now a mainstay where almost 70 per cent of the resident population is now covered. In addition, we have also achieved considerable success in the sale of universal life products as an effective estate planning and wealth transfer vehicle for High Net Worth Individuals, riding on the growth of the private banking sector in Singapore. Role of LIA Singapore over half a century 10.LIA is pleased to play an active role in the development of the Singapore life insurance industry over the years, particularly in setting industry standards and engaging the authorities in regulatory reviews. In late 1980s, LIA was actively involved in formulation of MAS 306, which laid the foundation for good sales practices and agency management. We were also involved in introduction of the solvency margin requirements then. With increasing focus on product and sales disclosure in 1990s, LIA issued guidelines on benefit illustrations, product summary, and our first consumer guide, Your Guide to Life Insurance, in all these documents are still in use today. 11.The pace of change accelerated as we entered the new millennium. In 2000, LIA formed the CEDLI with members appointed by MAS to review product disclosure, sales advisory process and competency of insurance advisers, which led to issuance of two new guidelines on needs-based sales process and training & competency requirements in 2001, both of which were revised last year. LIA also played a very active role in the risk-based capital workgroup that gave rise to the new valuation and capital adequacy framework in Another key focus of LIA has been in consumer education. While it is widely recognised that having adequate insurance coverage and long-term Page 3 of 5

4 savings are critical for individuals and their families, they are often not given a sufficient level of urgency due to lack of understanding or other competing priorities. LIA takes a multi-pronged approach in consumer education. We actively engage various stakeholders such as MoneySense, CPF Board, CASE and our agency force to conduct talks and seminars. We have also been using various media such as radio talk shows, newspapers and our website to educate the public on the importance of life insurance. 13. To keep our members abreast of latest developments and help promote industry dialogue, LIA has also been closely involved in organising conferences and seminars. These include regional events such as the 25 th Pacific Insurance Conference held in Singapore in September 2011, as well as events to address local issues such as the coming SAS-LIA Retirement Conference 2012 to be held next month. Conference registration brochures are available at the Reception Table in the foyer outside. 14.LIA would not have been able to carry out its roles effectively without the support of our members and office bearers, past and present, and the support of all other stakeholders particularly MAS, CPF Board, Ministry of Health, FIDReC and other industry associations. LIA has also been fortunate to have a dedicated and effective secretariat team headed by our Executive Director Ms Pauline Lim. Way forward 15. While our industry has progressed, the environment we operate in and the customers we serve have evolved too. The pace of change affecting our industry is likely to be much faster going forward, and the underlying issues more complex. But there are equally obvious opportunities ahead, which include protection gap of the general public, long-term savings needs of the working adults, the rapidly growing High Net Worth segment and insurance needs of the ageing population in Singapore. Page 4 of 5

5 16. To rise above the challenges and fully capitalise on the opportunities, we need to strengthen our abilities to manage risks in a more volatile environment and safeguard long-term financial soundness of insurance funds. We need to re-double our efforts to narrow the protection gap and continuously improve on our productivity and competitiveness. Above all, we need to constantly focus on delivering great value and better service to our customers. 17.To truly live up to LIA s vision of providing peace of mind throughout one s life-cycle to our current and future generations of policyholders, we need many more 50 years of success. 18.We look forward to your continued support as we embark on the next phase of our journey. Thank you. Page 5 of 5