aviva and dbs launch singapore's first renminbi-denominated insurance plan

Singapore: Aviva and DBS launch Singapore's first Renminbi-denominated insurance plan

08 December, 2011

The Dragon Renminbi Plan is Singapore’s first single premium non-participating endowment plan, offering investors a yield of 2.85% per annum over a five year period.
The Plan, underwritten by Aviva, will be available exclusively to DBS customers at all DBS Treasures Centers.

Aviva and DBS Bank Ltd (“DBS”) have launched the Dragon Renminbi Plan – Singapore’s first five year Renminbi-denominated (offshore Chinese Yuan, CNH1) single premium non-participating endowment plan. The product, underwritten by Aviva, will allow investors to take advantage of opportunities on offer in the rapidly developing Chinese market. The Dragon Renminbi Plan is available to investors at all DBS Treasures Centres, with a minimum single premium of RMB250,000.

According to Jeremy Soo, managing director and head, Consumer Banking Group (Singapore), DBS Bank: “We’ve seen a strong demand for Renminbi products, since introducing our suite of Renminbi offerings in February this year. We’re confident the demand for Renminbi-denominated products will continue as investors seek to diversify their portfolio and capitalise on the relative strength of the Asian economy. The launch of the Dragon Renminbi Plan provides our customers with another product that leverages on the rise of Asia and China’s growth, allowing them to enjoy potential currency gains.”

The suite of Renminbi products that DBS launched earlier this year includes current and fixed-deposit accounts, currency-linked investments, as well as CNH-denominated bonds, unit trusts and structured notes. The Dragon Renminbi Plan is their first Renminbi insurance product with a five year term.

Although volatilities are expected in the short term, investors will likely see a gradual appreciation of the RMB against the USD over the next five years, making the Dragon Renminbi Plan’s five year tenure an attractive one.

Simon Newman, CEO, Aviva Singapore, says that the current economic landscape has made it important for insurers to seek opportunities within the region to meet the growing financial appetite of customers.

“We felt that the time was right for us to offer a Renminbi product to our customers, backed by a rewarding yield. The Dragon Renminbi Plan is the first product of its kind and unlike anything seen in this market before. As the only Renminbi endowment product in the market right now, the plan provides investors with a mid-term financial planning solution into a currency that is expected to gradually appreciate in the next five years. Moreover, with the fixed return of 2.85%, it allows investors to gain access to China without taking on excessive market risk,” explained Mr Newman.

“The development of such a product would of course not have been possible without the strong partnership between Aviva and DBS that has been built over a number of years,” Mr Newman continued.

Aviva and DBS have been in a bancassurance partnership since 2001. This partnership has been a significant contributor to Aviva growing its business extensively in Singapore. The third-quarter results this year showed that Aviva’s life insurance sales grew by 65%. Bancassurance sales tripled when comparing the nine months in 2011 against the same time in 2010.

1 RMB is traded both onshore (in Mainland China) and offshore (primarily Hong Kong). These are traded at different rates and there are regulations that keep the currency markets apart. The differing demand and supply conditions also lead to separate market clearing exchange rates. “CNH” is used in statements and advices to denote the RMB that is available outside of Mainland China, based on offshore board rates for RMB.

my comments:

About the Dragon Renminbi Plan

Maturity Value of 115.09%, or equivalent to RMB 1,150,900 (for a single premium investment of RMB 1,000,000).
The Maturity Value amounts to an effective yield of 2.85% per annum, compounded yearly over a five-year period on the single premium, plus the return of the single premium.
Peace of mind with death benefit cover.
Guaranteed issuance basis (ie 100% acceptance by Aviva) with no health questions asked.
Upon policy maturity, policyholders have the option to choose to receive the payment in the contract currency or any other currency made available by us such as SGD or USD.


i understand this product is exclusive to the tie-up between aviva and her bancassurance partner, dbs and presents another option to investors seeking to invest into renminbi (RMB) related products and services.

some of my company's advisors have asked me whether we can market this product and i have responded by emailing to mr steven baxter, head of partners distribution, aviva for his clarifications.