Ladies and Gentlemen

1   Fifty years is a long time in the history of independent Singapore.  So let me extend my warmest congratulations to the Singapore Insurance Employees Union (SIEU) on its 50th anniversary.  I am happy to join you this evening to celebrate this milestone event and recognise your contributions to Singapore and the insurance industry.

2   The SIEU has contributed to the development and growth of our insurance industry.  It was formed in 1955, during a turbulent period in the history of Singapore.  Back then, labour-management relations were confrontational.  Strikes were common.  Both workers and companies suffered.  So did the economy.  However, the SIEU took a different path.  It opted for a consultative approach and sought win-win outcomes for both employers and workers.  Over the past few decades, the SIEU has been an outstanding example of a responsible and progressive union that works closely with management.  This has benefited the industry and improved the well-being of workers.

3   This collaborative partnership between labour and management has helped the industry grow strongly over the years.  In 2004, total premiums topped S$17billion, while total assets managed were worth S$87billion.

Some Future Trends

4   The insurance industry has changed and become more vibrant over the past few decades.  To encourage diversity and competition, we started liberalising the industry in the year 2000.  The industry now has more breadth and depth.  New players have entered the market, while some existing players have consolidated.  Consumers enjoy a greater variety of products.

5   Looking ahead, what are some of the key trends which bear watching?

6   First, consumers are becoming more sophisticated.  They are better able to understand the importance of insurance cover.  They are also developing a clearer understanding of complex insurance products and a better appreciation of their rights.

7   A second trend is our ageing population.  As people live longer, they need better medical cover and a steady stream of income in their post-retirement years.  This is one reason why the Government recently revamped MediShield.  Annuities will be in greater demand in retirement planning.

8   Third, the sales and distribution network for insurance products has widened.  This network is no longer the sole domain of insurance intermediaries and agents.  Insurance is becoming a key feature in long-term financial planning.  These days, banks are including insurance in their suite of financial products that are being sold to their customers.  I am told that many people go to a bank to deposit cash and end up being persuaded to buy an insurance product as an alternative investment.

9   What do all these mean for the industry?  How should it respond?

Preparing for the Future

10   To maintain the dynamism and healthy growth of the industry, the critical success factor is enhancing market conduct standards.  This is particularly important given the complexity of products and the risk of mis-selling.  Consumer trust in the industry is important, and this requires constant cultivation.

11   As regulators, the Monetary Authority of Singapore (MAS) pays a great deal of attention to improving the standards of market conduct.  MAS devotes much time and effort to the supervision of insurers and insurance intermediaries.  However, MAS alone cannot raise market standards.

12   Much depends on the industry itself.  Enhancing market conduct standards is best achieved through a three-way partnership between employers, employees, and unions and associations.

13   Although the operating environment is tough and competition keen, insurers need to fulfil their responsibilities to the end-consumers.  There should be no compromise on standards.  Employers need to take the lead in raising professional and ethical standards of the industry by setting the right tone, encouraging a culture of openness and having zero tolerance for unethical behaviour.  Investment in employees to enhance their skill sets helps ensure service and delivery quality.

14   As the industry matures, employees have a host of opportunities and challenges.  With new products, employees benefit from a wider scope for personal development and specialisation.  At the same time, employees have to constantly improve themselves to uphold standards and keep pace with consumer expectations and needs.  They should not simply rely on employers for their own training.  Instead, they should proactively upgrade themselves.

15   The final link in the partnership is the industry unions and associations such as the SIEU, Life Insurance Association of Singapore (LIA) and General Insurance Association of Singapore (GIA).  The SIEU, for instance, could use its wealth of experience in labour-management relations to assist employers and employees in enhancing competencies and skill sets.  To raise standards, they could work with institutions like the Singapore College of Insurance, the Singapore Insurance Institute and the Institute of Banking and Finance.

Conclusion

16   The SIEU has made important contributions to the insurance industry and Singapore.  I applaud your efforts and hard work to help make the industry what it is today.

17   However, as with many other unions in Singapore, one of the key challenges facing the SIEU is preparing for leadership renewal.  I am not suggesting that the present leaders are old and should retire.  I am making the point that all good leaders prepare strong successors to keep their organisations going.  A rapidly-changing business environment requires a constant infusion of new blood and fresh perspectives in leadership positions.  For effective leadership renewal, younger members must step forward and be prepared to shoulder heavier responsibility.  When I was in Neptune Orient Lines (NOL), I ensured there was proper succession.  When I was invited to join politics, I could leave at short notice because there was a ready successor to helm the company.  In politics, I too planned for orderly succession.  At the right time, I stepped aside, fully confident that a younger team would take Singapore to the next mountain peak.  That is how we keep Singapore going.  That is how SIEU and other unions keep themselves abreast of changes and in tune with the aspirations of a younger generation of workers.

18   Once again, I wish all your members a happy 50thanniversary.  Have a pleasant evening.