Speech By MAS Executive Director

LUNCHEON ADDRESS BY MR LOW KWOK MUN,
EXECUTIVE DIRECTOR (INSURANCE SUPERVISION).
MONETARY AUTHORITY OF SINGAPORE
AT THE LIFE PROTECTION SEMINAR
20 AUGUST 2009, INTERCONTINENTAL HOTEL, SINGAPORE

Key points highlighted:

1. The significant protection gap amongst Singaporeans and the need for the life insurance industry to help address this gap.
2. Life protection plans are thus a necessity and not an option. However, consumers often put off their plans to get insurance protection due to ignorance, inertia or the belief that misfortunes would not befall them. Some also have the misguided impression that it is costly to purchase adequate insurance protection.
3. Having the suite of protection products available is, however, not sufficient if consumers are not well informed about the availability of such products to meet their specific needs. Educating the consumer is, therefore, equally important.
4. The incentive structures currently tend to encourage advisers to push the sales of products that generate the most commissions to the advisers rather than products that meet the needs of the consumer. Many of the commission structures are front-loaded and, therefore, they do not give sufficient incentive for advisers to consider the long-term relationship with the consumer. This does not align with the nature of life insurance, which is primarily intended to provide long-term protection to policyholders.

MAS Website Link for full address: http://www.mas.gov.sg/news_room/statements/2009/Luncheon_Address_by_Mr_Low_Kwok_Mun_Life_Protection_Seminar.html