AIA shares its growth drivers for 2012 and beyond

The company said the high net worth sector is a key driver of its growth, as it has effectively positioned its insurance products as "estate planning tools for high net worth individuals".

Tan Hak Leh, CEO, AIA Singapore, said: "There are essentially three key drivers for our growth. First is the strength of our agency force to deliver quality protection and long term service products to our customers. Second is the continued growth of our group insurance business.

"The last driver is our ability to penetrate into the high net worth segment in Singapore. And the high net worth segment, as you know, is a segment that is growing very rapidly."

1. Strength of Agency sales force
2. Group insurance business
3. High net worth segment

Full text: http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1223776/1/.html

AIA is rumored to be working with Discovery on a health and wellness proposition

AIA is rumored to be hot on the heals of Great Eastern in the pursuit of a health and wellness proposition here in Singapore. They is a talk that AIA has been working with Discovery Health from South Africa on a potential partnership. Discovery has a successful model for an integrated wellness program which engages partners such as gyms and health providers, this model has been working in UK in collaboration with Prudential since 2004 (http://pruhealth.pruhealth.co.uk/individuals/home)

AIA introduces mobile POS for insurance agents using Ipad

"Multimillion" development of a streamline, easy-to-use iPad app will be introduced first in Singapore, before being deployed to other key markets in Asia-Pacific.

SINGAPORE--AIA Singapore has launched what it touts to be the insurance industry's first interactive point-of-sale (iPOS) system, and says it is aimed at helping agents cut down time in getting their policy applications submitted and enable customers to receive insurance advice and coverage as quickly as within a day.

During the launch here Wednesday, Tan Hak Leh, CEO of AIA Singapore, said the company is the first insurer globally to launch a standalone, mobile point-of-sale system via an app running on Apple's iPad tablet. The app will help facilitate the whole process from fact-finding and analysis of the customer's financial health to recommendation of suitable policies and submission, Tan said.

Full text: http://www.zdnet.com/sg/aia-introduces-mobile-pos-for-insurance-agents-7000003391/

The app allows users to fill up the form without internet connection.

According to William Lisle, AIA group EVP and group chief distribution officer, the new offering is to attract the busy "generation Y individuals" as they can now obtain insurance coverage within the day rather than sit through several meetings.

Lisle also told Marketing that the app is mainly promoted through agents. Currently around 1200 agents in Singapore are actively using the product.

http://marketing-interactive.com/news/35003

The  iPoS system on an iPad follows  the successful launch of AIA Singapore’s fully mobile iPad Sales Quotation System (SQS) in January this year which saw more than 70% of AIA’s agency force adopt the SQS.

Key Features:


Fully secure digital process - Provides a one-stop shop from AIA products, financial review through to 
signed e-applications and e-submissions. Allows our AIA FSCs to provide 
customers with comprehensive financial advice.



Insured as fast as within one day - E-application forms are electronically submitted for underwriting.

Traffic light navigations - The iPoS system prompts the FSCs to verify that information included is sufficient and correct before the forms can be e-submitted

Protection iBook application - The complementary Protection iBook application is a pre-sales tool kit that helps customers better understand financial planning and insurance. It consists of AIA Protection Calculators, product information and other useful resources, for AIA FSCs to initiate conversations with customers which is done on the iPad.


iPoS will be the key component in our training programmes for new recruits, which will raise their productivity.With this innovation,  these new  FSCs will be able to effectively  and efficiently provide customers with comprehensive financial advice, at their customers’ convenience

http://www.aia.com.sg/en/resources/13428e804c84ce91b496bc9a6c3b0c76/AIA_Introduces_First-in-Market_Technology_to_Insure_Customers_as_Fast_as_Within_One_Day.pdf

$14k bill shock for retiree after operation. Both AIA and CPF initially refusing to cover the claim.

Retired businessman Steven Choo, 60, underwent angioplasty at the Singapore General Hospital (SGH) to unclog blood vessels in his legs last November.

Mr Choo, who is diabetic, underwent the procedure - with "balloons" and stents used to unblock the arteries - which prevented gangrene from spreading from his toes.

But the successful operation marked the start of another round of problems for him. On the day he was discharged from hospital, he received a shock: His medical bill came up to $14,501, but Medisave and MediShield would cover only $900 and $810, respectively, or $1,710 combined.

SGH also told him he would not get his $6,620 deposit back, and that he still owed it $5,381, Mr Choo told my paper in an interview. The remaining $790 was covered by a government grant.

The Central Provident Fund (CPF) Board told him that the Medisave claim submitted by the hospital did not indicate a surgical procedure. This meant he could not claim the full amount he should have been entitled to: $3,050.

Insurance company AIA, which handles his MediShield account, told him likewise.

Read full story:  http://news.asiaone.com/News/Latest%2BNews/Singapore/Story/A1Story20120802-362831.html

Author comment: This story had a relatively good end, as after a number unsuccessful appeals Mr.Choo did manage to get through and convince CPF and AIA that this was indeed a surgical procedure, even though the hospital chose not to utilize an operating theatre. Determination does pay off especially in the cases where the situations are not black and white and there's no successful precedents on how to treat those cases. 

AIA Singapore, reported country specific results for the first time.

Net operating profit rises 8% to US$168m for H1; sales to high net worth clients growing fast.

AIA Singapore, reporting results for the first time in its 81-year history here, said yesterday that operating profit after tax rose 8 per cent to US$168 million for the first half 2012.

The wholly owned unit of AIA Group, which was listed in Hong Kong in October 2010, saw strong growth in the value of new business, up 27 per cent to a record US$99 million. Singapore is its third largest market after Hong Kong and Thailand.

Annualised new premiums (ANP) rose a similar 27 per cent to US$152 million. ANP represents 100 per cent of annualised first year premiums and 10 per cent of single premiums.

Tan Hak Leh, chief executive of AIA Singapore, said business has not been affected by the economic slowdown.

Source: http://www.businesstimes.com.sg/premium/top-stories/new-business-growth-gives-aias-boost

As people live longer, children have a bigger duty to plan for loved ones

As life expectancy increases in most places around the globe, there are significant implications for those planning nest eggs.

Children are the main source of income for most retired parents in Singapore, accounting for 63%, participants heard at a recent conference organised by the Insurance Risk and Finance Research Centre of the Nanyang Business School.

The next largest sources are: employment, 12%, and savings, at 11%. Other income sources for the elderly include rent, as well as income from spouses.

Last year, the average lifespan of a Singaporean was estimated at 85 years, according to figures from the Department of Statistics.

Experts are divided on whether life expectancy will continue to increase or plateau.That aside, there are two important questions that everyone should be asking:

• How long will we live? 
• Can we afford to live a long life? 

Those intending to - or expected to - support their parents financially in their old age should also give some thought to how to include their parents' retirement needs in their financial plans too.

Mr Daniel Lum, Aviva Singapore's director of product and marketing, noted that talking about finances and retirement may be a difficult topic for children to broach with their parents.

But he added that children need to be aware of certain details before they can embark on a realistic retirement plan for their parents.

Mr Gregory Fok, director of sales and financial services at Manulife Singapore, said that often when there are many children in a family, each one wrongly assumes that another sibling has done the financial planning.

Understanding your parents' retirement needs

Knowing what kind of lifestyle your parents would like to have after retirement is the first step in helping them plan for their finances. If they are planning to travel often, or to embark on new hobbies and activities, then extra monthly cashflow may be necessary to support them.

More importantly, it is necessary to know how much your parents have already set aside for themselves, to avoid duplication.

Mr Fok said that for some, there might be a tendency to splurge after receiving a lump sum of money for retirement.

Helping parents manage their money may be equally important.

He said: 'I met a couple where, the moment the husband retired and got a significant sum of about $500,000, he spent it on house renovations, bought a new car, financed his children's overseas education and went on holidays.

'After three years, the amount dropped to less than $100,000.'

Many insurers these days have rolled out annuity plans to ensure a steady stream of income after retirement.
For example, the Great Eastern Long Term GoldenCare Annuity provides a lifelong monthly annuity benefit for an initial lump-sum investment. It also provides additional benefits in the event of disability.
The Manulife 3G plan pays out lifelong yearly income to the insured, and premiums are paid over 10 years.

Protection needs of your parents

Having comprehensive medical, hospitalisation and surgical coverage will prevent a depletion of savings or retirement funds in the event of critical illness or surgery. Mr Lum said: 'Medical expenses are often unexpected and costly, so it makes sense to reduce the risk of high bills with insurance.'

If your parents do not already have medical insurance, it is recommended that they get it as soon as possible, so they will have less risk of having 'pre-existing conditions' that may be excluded by the insurer.
According to the Aviva Long Term Care Study 2011, the typical cost incurred by claimants averages out to be $2,000 a month.

The basic ElderShield plan introduced by the Government to provide basic financial protection to those who need long-term care, especially during old age, provides a monthly payout of only $400 for a period of up to six years when a person becomes unable to perform at least three activities of daily living, such as washing, dressing, and feeding.

It is possible to provide additional cover for one's parents by enhancing the plan with supplements.

What is my time horizon if I want to provide for my parents?

As a general rule of thumb, it pays to start financial planning as early as possible. A Great Eastern spokesman said the advantages of starting early include a higher chance of insurability and a longer time horizon for accumulation in terms of endowment and investment plans.

He said: 'The cruel fact of life is that, being older, the time horizon for savings may be shorter and premium rate for protection insurance would likely be higher as it usually increases with age. Therefore, it is always advisable and advantageous to start financial planning early.'

Mr Fok also said that ideally, children should start planning for their parents' retirement needs as soon as they enter the workforce, but it is never too late to start.

Should I cover myself?

An American International Assurance spokesman also urged children who are trying to plan for their parents to ensure coverage for themselves first.

He said: 'Always ensure that you are covered before your dependants, so that if unfortunate events such as accident or illness occur and you lose the ability to provide income for your family, your insurance policies' payout can be used to finance your medical bills and monthly expenses, which may include contributions to support your parents. This is especially important if you are the sole breadwinner.

'Being inadequately insured may also result in the reverse happening, such that you become a financial burden to your family and parents who are looking to retire.'

Source: The Straits Times

Aviva shortlists Prudential, Manulife for Malaysia sale-sources

(Reuters) - Prudential Plc (PRU.L) and Manulife MFT.TO are among four potential buyers that have made it through to a second stage of bidding for Aviva's (AV.L) insurance business in Malaysia in a deal worth about $500 million, sources said.

The hunt for the Aviva stake underscores the industry's focus on growth opportunities in emerging Asian markets, where life insurance premiums are forecast to double the world average next year, according to a Swiss Re forecast.

AIA Group Ltd (1299.HK) and Sun Life Financial Inc (SLF.TO) have also been short-listed in an auction process that attracted about 10 suitors in the first round, the sources added, who declined to be identified as the discussions were private.

Britain's second-ranked insurer is selling its 49 percent stake in an insurance joint venture with Malaysia's second-biggest lender CIMB Group Holdings Ltd (CIMB.KL) as part of a global retreat.

The joint venture has struggled against rivals such as Great Eastern (GELA.SI) and Prudential, and a new partnership could re-shape the competitive landscape in Malaysia.

AIA launches Premier Disability Cover - their first disability income protection plan

AIA launches Premier Disability Cover, their first disability income protection plan. 

First-to-market features:  

• Guarantees benefit payout regardless of any future changes to your income or payouts  received  from other disability income policies, in the event of disability and unable to work due either to an injury or illness
• Payout in the event of disability regardless of employment status at the point of claim
• Payback benefit of up to two times the monthly benefit to replace lost income during the deferment period
• Additional lump sum payout of 24 times the insured amount should you suffer from Catastrophic disability
• Rehabilitation Benefit which assures up to six times the insured amount per disability for recovery treatments such as occupational therapy

Product brochure

According to the 2011 AIA Nationwide Protection Survey, while approximately six in ten Singaporeans polled claimed that 

they have a clear idea of how much they will need to set aside for their dependents in the event of their death or p

ermanent disability, the survey revealed that  only 14 per cent are adequately insured, as calculated based on the 

industry‟s recommendation of total coverage of approximately 10 times one‟s annual salary to protect the loss of income.

Source: Press Release

AIA's the new campaign to drive customers to sign-up for their online portal

A chance to win a New iPad with Wi-fi + Cellular 64GB (“Prize”) will be allocated to each Eligible Person for registering for AIA eCare. This chance shall apply to all the 5 monthly lucky draws within the Promotion Period, unless the Eligible Person has already won a Prize. 5 New iPads with Wi-fi + Cellular 64GB each worth S$1,088 will be given away in total.

Promotion period for the Draw is from 1 July to 30 November 2012

AIA eCare: online access to the customer's AIA policies anytime, anywhere.

http://www.aia.com.sg/eCareSignUp/Terms-and-Conditions

Woman sues AIA Singapore over life policy.

Policy suspended; client insists benefit illustration has contractual effect.

A WOMAN who bought a life policy with an assured sum of $200,000 from AIA Singapore in 1993 is now battling the insurance giant in court. Madam Zhu Yong Zhen, 49, is suing for damages, alleging breach of contract, after AIA suspended her policy in 2009.

A five-day hearing into the lawsuit opened in the High Court yesterday. 

Representing herself in court, she alleged that according to the 'original policy quotation', she needed to pay premiums for only 16 years.

But AIA said the quotation document - known as a policy benefit illustration - was only for illustrative purposes.

It added that the benefit illustration does not have any contractual effect and did not form part of the terms of the policy.

AIA has counter-sued Madam Zhu for defamation over a blog she published on the dispute.


Full text: Straits Times: 26 June 2012 

AXA and AIA sponsor Motherhood exhibition 2012 at Expo

The biggest parenting extravaganza at Expo this past weekend was also an insurance extravaganza with a heavy presence from insurers AIA and Prudential. Although AXA was one of the key sponsors we didn't see much AXA presence. Both insurers present had big booths with at least 20-30 agents in each. The agents were approaching the unsuspecting passers by who were shopping for the baby and maternity goodies and actively promoting the financial planning and insurance for kids: 

AIA offered general plans: AIA plans
AXA pregnancy insurance: Mums Advantage
Pru pregnancy insurance: Pru Smart Lady

AIA against fee-based model for insurance agents

Source: Asia One

The raging debate surrounding the potential replacement of the traditional commission-based model in insurance with a fee-only model remains a key concern for AIA Group, which believes this overhaul is unwarranted.

"I'm sorry to say that no one has done salary agents and proved that it is any cheaper than commission agents. If it is that easy and you can do salary agents cheaper, why aren't all companies doing it?" said AIA Group regional chief executive Ng Keng Hooi in an exclusive interview with BT.

This comes a week after Monetary Authority of Singapore (MAS) managing director Ravi Menon revealed plans to shake up the advisory landscape by reviewing the existing commission-based structure through the Financial Advisory Industry Review (Fair).

Under a fee-only model where agents and advisers are paid a salary, it has been suggested that agents may merely fulfil the bare minimum.

Conversely, Mr Ng added that commission-based remuneration promotes meritocracy, which acts as an incentive for agents who are paid only after they successfully complete a sale.

While the UK and Australia have already taken measures to ban commissions for financial advisers in a bid to ensure greater professionalism and transparency, it does not mean Singapore has to follow suit, said Mr Ng.

"We have to be careful not to look at the UK and Australia and say that is the best model and it is better than Singapore's. If you use salary agents, they can do very well or very poorly, and are still paid a fixed pay. I am not sure that it is much cheaper than on a commission basis."

Part of Mr Menon's proposed review also centred on relooking the multi-tier distribution structure, where supervisors stand to earn commissions on top of what agents earn. These commissions, embedded in insurance products, have been criticised for unnecessarily increasing the costs borne by customers.

Local cooperative insurer NTUC Income has already discarded the multi-tier system in an attempt to lower distribution costs and deliver greater value to customers, distinguishing itself from other insurers in the process.

But AIA Group is unlikely to follow in NTUC Income's footsteps, with Mr Ng commenting that this may not be a cheaper alternative and could inadvertently lead to reduced productivity.

"If paying managers on a salary basis is cheaper, most of the insurers would have gone there already. But you see - all over the world, and not just Singapore - no one has done it well," he said.

"Salary is a lot more complicated. Especially when the manager is older, productivity may go down. Ours is based on you delivering the sales and then you are rewarded accordingly."

Additionally, much has been made about insurance agents profiting more in commissions by hard-selling whole life insurance plans as premiums for those plans are higher than pure protection plans (or term insurance), which may not be in their customers' best interest.

"Simple term life insurance is sometimes all a person needs to protect against risk," said Mr Menon in his speech last week.

This issue has been oversimplified, said Mr Ng.

He said that customers have different preferences, with some opting for whole life insurance as they prefer a product with a savings element that offers a cash value, unlike term insurance that does not.

"You cannot tell them 'no, you should not have it'. The important thing is to make them see that there is (a term insurance product and a whole life insurance product) . . . and give them this option - which is what we have trained our agents to do."

Despite AIA's in-house estimations placing protection gap figures in Asia at US$20 trillion, there is still an underlying underinsurance problem plaguing the average Singaporean as the general sentiment has leaned towards investment products, said Mr Ng.

"Our belief is that it should be at least 5-10 times annual income," he added. "We did some studies and we found that only two out of 10 Singaporeans are adequately protected. Our challenge is that, sometimes, customers want returns and are not placing enough emphasis on the protection bit."

Consequently, AIA has embarked on its Premier Agency strategy to develop and train more agents to bridge this gap by encouraging clients to first address their protection needs wholly before selecting investment-type products.

On the topic of expansion, while Mr Ng reiterated AIA Group CEO Mark Tucker's intention to focus on organic growth, he declined to comment on reports surrounding AIA's rumoured interest to acquire ING Groep NV's Asian insurance unit in a deal valued at over US$6 billion.

However, he did not rule out the opportunity for potential M&A transactions if the right deal comes along. Said Mr Ng: "All I can say is if there is something that is financially sensible which gives returns to our shareholders . . . we would look at it."

Meanwhile, AIA Group's spate of hiring former Prudential staff for its management ranks has incited speculation that it is part of a deliberate strategy to poach its rival's top talents. Mr Ng, a former Prudential employee himself, was quick to dispel this allegation.

"In some places, it happens to be true because it so happens that Mark and I came from there and we do know some of these people," he said. "I can tell you a lot of people want to join us but they do not meet the standard, and they could be from Prudential. The main thing is that we are in a good position where we are able to attract people."