NTUC Income | About Us | Social Report

Introduction

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NTUC Income, established in 1970, competes in a field of more than 45 local and multi-national insurance companies. Our mission is to provide more than insurance at best value to all our customers. We are the only insurance co-operative in Singapore. As a co-operative, our key goal is to maximize returns for our policyholders, unlike commercial companies where the key goal is to maximize shareholder returns.

Our insurance plans have benefited large numbers of Singaporeans from all strata of society, from the professionals and executives, to those with a more limited budget. One in two Singaporeans is insured with us.

We have maintained our "AA" rating by Standard & Poor's since 1999. This is the highest rating among all in Asia. This rating reflects a strong financial profile, flexibility and capacity to meet new challenges.

More than 95% of the customers we serve each year are satisfied with the level of service that they received. We help Singaporeans in difficult times by creating job opportunities. We support the community through financial contributions to charities and other worthy causes.

Benchmark Pricing

Life Insurance

Our customers get better value because we have invested well, incurred fewer expenses, and distributed more of the surpluses to policyholders:

By investing prudently and professionally, we have achieved returns in our investments which are equal or better than our competitors.

We keep our costs low, minimise wastage, while providing a good level of service. With lower expense ratio, we are able to keep our premium rate competitive, or give a better return for our policyholders' savings.

Of the surplus we distribute each year, 98% goes to policyholders, compared to 90% by commercial insurance companies. This policy had benefited our policyholders. For year 2005, face value of policyholder bonus we declared amounted to $620 million. As we distribute more bonus out of our surplus, this represents an additional $51 million in bonus as compared to if we were a commercial company."

Our bonus policy is to treat all policyholders fairly between different products and different generations of policies. Our bonus rates are broadly fair between those policyholders who are leaving (surrendering), and those remaining in the fund. We have a stable set of special (terminal) bonus so that benefit payments on death or maturity are not subjected to large fluctuations just before claim.

A financial expert, Dr Money, compares us favourably to other insurers for life insurance products. In his website at www.askdrmoney.com, Income rates as the best in investment linked products, policy loans, whole life policies and annuities.

Health Insurance

We insure 475,000 Incomeshield policyholders. Our Incomeshield rates are our rates are about 20% lower than our competitors. With a total Incomeshield premium of $63m in 2005, our policyholders saved $12.6m.

We won the open tender to take over the DPS and Medishield insurance as we offered the best cover and lowest premiums. These schemes were set up by the Government to ensure that the lower income groups would have some form of basic insurance cover at very low cost.

Better value for General insurance

We are the largest motor insurer in Singapore, with a market share of about 40 per cent. Our motor premium rate is 5% lower than major competitors. With a gross premium of $200m, our policyholders save $10m.

For 10 popular models of vehicles, our premium rates are 15 to 30 per cent lower than our competitors. The comparisons can be found at
http://www.income.com.sg/insurance/motor/comparison.asp

We insure more than 50% of motor cycles - the preferred private transportation of the lower income group.

Investment linked products (ILPs)

Our spread or sales charge (investors incur a sales charge when they buy an ILP) for ILPs is 1.5% lower the industry average (ours is 3.5% compared to the industry average of 5%). With $200m in ILP Single Premium in 2005, this translates to $3m in savings for our policyholders.

Lower interest rate for loans

It is common for policyholders to take loan against their policies to tie over a difficult period. Our loan interest rate is one of the lowest in the market. While the average industry rate is 6.8%, Income's rate is only 5.5%. With a total outstanding loan of $481m, this translates to $6.3m in savings for policyholders.

Impact And Reach

Impact as reflected in our reach:

Our insurance plans have benefited large numbers of Singaporeans from all strata of society, from the professionals and executives, to those with a more limited budget.

As at end of 2005, NTUC Income had 1.8 million in-force policies. We insure about 40% of all vehicles, making us the largest motor insurer in Singapore in a field of nearly 30 other insurers. We are also the largest health insurer - we have 475,000 Incomeshield policyholders, 350,000 Eldershield policyholders and 350,000 Incomeshield M Plans policyholders (previously MediShield Plus policyholders).

Impact as reflected in our Quality Service:

More than 95% of the customers we serve each year are satisfied with the level of service that they received.

Impact as reflected in our Credit Rating

NTUC Income has maintained its "AA" rating by Standard & Poor's since 1999. This is the highest rating among all in Asia. This rating reflects a strong financial profile, flexibility and capacity to meet new challenges.

Social Programmes

Helping Singaporeans in difficult times

Creating employment: Since 2002, Income has made conscious efforts to hire older retrenched workers and fresh graduates as Customer Relations Officers (CROs). In 2005, 94 CROs were recruited. This is one of the co-operative's on-going efforts to support the government's call to hire older workers and create job opportunities.

Community Chest: More than 95 per cent of the staff contribute monthly to the Community Chest and NTUC Income matches employees’ contributions dollar-for-dollar. This contribution amounts to about $300,000 annually. We have been conferred the Community Chest SHARE Platinum Award since 1995.

Moral Home: NTUC Income has adopted the Moral Home for the Disabled for more than 10 years. Our management and staff visit and participate in many events organised for the beneficiaries. We also organised various fund raising activities to help the Home.

Supporting programmes of the labour movement

NTUC Income is a strong supporter of the labour movement. In 2005, we contributed $200,000 to the May Day Carnival & Concert, which is a tribute to Labour Day and union members. About 20,000 people attended last year's event, held on 1 May at the Esplanade Waterfront.

We pledged $1 million over a 3-year period (2003 - 2005) to the Ong Teng Cheong Education Trust Fund. In 2005, our contribution was $350,000.

NTUC Income contributes to fund-raising efforts by the Unions. The funds raised go into providing training programs for Union members, bursaries for members' children or charities. In 2005, the contribution was $84,000.

Supporting the arts, sports, and charity

Each year, we contribute more than $2 million to support national community projects. In 2005, we made a total contribution of $2.7 million in support of local arts, sports, education, healthy lifestyle, charity and programmes of the labour movement. Our contributions have been recognisedby the conferment of prestigious national awars such as the Distinguished Patron of the Arts, Singapore H.E.A.L.T.H. Gold Award, and SHARE Corporate Platinum Award.

Examples of major sponsorships:

SIAS Research

SIAS Research Pte Ltd was created in 2003 to provide small investors with research and analysis to assist them in their investment choices. SIAS Research is wholly-owned by Securities Investors Association (Singapore) or SIAS, the largest investor lobby group in Asia. In return for our sponsorship, 2000 Income policyholders are eligible for complimentary SIAS memberships.

President's Challenge

The President's Challenge is an annual series of community-based activities started by President S R Nathan in 2000, to rally the public towards helping those in need of assistance. In line with our co-operative values and in conjunction with our 35th Anniversary Celebrations, NTUC Income contributed more than $100,000 to the fund.

NTUC Income's Sports Excellence Award (SPEX) was initiated to encourage greater participation in sports activities among students, recognise the achievements of student athletes and harness community support for sports. In 2005, NTUC Income gave out $100,000 to 100 schools - ie $1000 to each school.

Conclusion

NTUC Income will continue to provide a better life for its policyholders and the community through innovative insurance plans and services. The co-operative will strive for excellent customer care through its staff and insurance advisers. By using technology effectively, we aim to reduce costs and pass the savings to policyholders through lower premiums. In all our endeavors, we are guided by our corporate Mission, "To provide more than insurance at best value based on co-operative principles".