25th pacific insurance conference 2011

in his keynote address at the 25th pacific insurance conference held at the marina bay sands convention centre on september 12, 2011, our minister for trade and industry and deputy chairman of the monetary authority of singapore, mr lim hng kiang said that more can be done to further strengthen, broaden and deepen the insurance industry in Asia in 3 key areas and they are:

a. enhancing the penetration and availability of insurance;
b. raising financial literacy and consumer education levels; and
c. improving insurance distribution and safeguarding retail customers’
interests.

a. Enhancing the Penetration and Availability of Insurance

mr lim noted that insurance penetration in many parts of asia continue to be low with the focus of the insurers on the middle class and high net worth individuals. he added that closer attention should be given to meeting the specific needs of other segments of the population like low-income households and the aged.

and because of longer life expectancy, mr lim said it becomes more important to enhance the availability of annuity and long-term care products. and mr lim pointed out that insurance products catering to longevity risks need not be purchased only when one approaches old age.

b. Raising Financial Literacy Levels

mr lim said that the relatively low insurance coverage in asia is due in part to inadequate levels of financial literacy. given the use of the internet and the proliferation of technology, he encourage insurers to develop innovative methods for enhancing financial literacy standards among the public.

c. Improving Insurance Distribution and Safeguarding Retail Customers’ Interests

on this, mr lim said and i quote:

"In Singapore, like many other Asian countries, insurance agents remain a major distribution channel for insurance products. Consumers rely on agents to provide them with sound, quality advice. It is important that agents carefully consider their customers’ financial needs and risk appetites before recommending suitable products. Agents should not engage in product pushing to maximise commissions. Agents must remember the important social role in helping customers get adequately insured for their future."

mr lim further pointed out that:

"Insurance companies must also be customer-centric in their approach. They should not encourage the creation of a large agency force simply to compete for market share, or to push sales. Incentive structures must take into account how well the needs of customers are met, not merely sales volume. A strong fair dealing organisational culture will inculcate the right values for representatives to deal fairly with customers at all times."

mr lim concluded his keynote speech by further reminding insurers to not forget that their core proposition is to protect. and while recognising the growth potential of the insurance industry in asia, they should embark on initiatives to develop the industry, and keep in mind that the underlying aim of all their efforts is really to help ensure that people are adequately protected financially amidst the vagaries of life.

my comments:

ditto from me on the keynote message to all insurers from our minister for trade and industry and deputy chairman of the monetary authority of singapore, mr lim hng kiang. but the key sticking point for me from mr lim's speech is the need for insurers to do more for the low-income households and the aged.

and worthy of mention again is the underlying core proposition of our insurers is to protect and we should never lose the focus that the underlying aim of our combined synergies (for all of us working in the financial industry) is to help ensure the masses of people are adequately protected financially amidst the vagaries of life.