Response to "Time to look at competition in the insurance industry" (BT-16 June 2010)
'Time to look at competition in the insurance industry' (Business Times, 16 June 2010) contained a number of inaccuracies.
Much of the information that Mr Haverkamp believes should be disclosed is already publicly available. For example, information on the investment performance and management expenses of the participating fund of individual life insurers is published on MAS’ website. Individual insurer’s claims, premium and expenses by the different classes of accidental and health business, are also available on our website, allowing loss ratios to be computed. In addition, the investment mix and performance of the participating fund and other pertinent information is provided by life insurers at the point of sale and regularly thereafter.
When purchasing insurance products, consumers should first consider their needs and the balance between insurance protection and investment before deciding on which product to purchase. Where necessary, consumers should seek professional advice to understand the products and choose a plan that best meet their needs. Comparison of insurance products should not be done on the basis of price alone as insurance products are not standardised commodities. Other factors to consider include the insurers’ financial strength and service standards. To help consumers make meaningful choices, MAS has requirements on product disclosure and standards on the advisory process in place. These are complemented by industry-developed guidelines. There are also ongoing efforts to enhance consumer awareness and understanding of insurance products by MoneySENSE.
However, more can always be done. MAS will continue to work with the industry to enhance the transparency of insurance products. One initiative that is already underway aims to improve disclosure of the protection versus savings components in insurance products.
Angelina Fernandez (Ms) Director (Communications) Monetary Authority of Singapore