Published Date: 15 March 2024

“Treating Customers Right” – Speech by Ms Ho Hern Shin, Deputy Managing Director (Financial Supervision), Monetary Authority of Singapore, at the LIA Annual Luncheon, on 15 March 2024

Mr Dennis Tan, President of the LIA Singapore

Distinguished Guests

Ladies and gentlemen

1. Thank you for the opportunity to speak at today’s luncheon.

2. First, my congratulations to the re-appointment of the LIA Management Committee. Your leadership has helped the industry navigate the many challenges it has faced. From sudden shock events like the COVID-19 pandemic, to more sustained issues such as medical cost inflation and an aging society. You have rallied the industry to tackle common problems, and to remain resilient and to grow in challenging times. MAS looks forward to continued close engagement with you.

3. As the industry looks to the year ahead, armed with new initiatives outlined by Dennis, I would like to shine the light on the topic of “treating customers right”. The value of prioritising customer interests and delivering better outcomes for customers cannot be overstated. Happy customers are repeat customers. They do more business with you and bring other customers with them. This makes good business sense, and insurers already pursue this, with varying degrees of success. To do this well, every node of the insurance value chain, needs to be engaged and involved.

4. MAS will be updating our Guidelines on Fair Dealing in the coming weeks. The revised Guidelines will have an expanded scope and will apply to all financial institutions, and cover all financial products and services offered to all their customers. It will apply in a risk proportionate manner and provide guidance on what it means to treat customers fairly at various stages of the customer journey with a financial institution. Today, I would like to flesh out what fair dealing could look like for life insurers if the Guidelines are well applied.


5. First, product design. Good product design incentivises desirable behaviours and improve risk outcomes for policyholders. An example is insurers’ wellness programmes. In AIA's Vitality Active Benefits Program, there was an 18% increase in physical activity among members following the introduction of "Active Benefits", with the most significant increase observed in individuals over the age of 50.

6. Another example is co-payment for medical expense products, such as integrated shield plan, to encourage responsible consumption of healthcare services. This furthers national efforts in managing rising healthcare costs. From April this year, integrated shield plans will also cover expenses related to receiving public hospital-level care in the comfort of our home. This can help improve medical outcomes for some patients, whilst easing the bed crunch in hospitals. It is a win-win situation for policyholders, insurers, and the healthcare system.

7. Bite size insurance products with flexible payment options like SNACK by Income lowers the entry barrier for those who otherwise may not buy any insurance.

8. Treating customers right must include continuous product innovation that delivers features that meet customer needs and drives superior risk outcomes for customers in a cost-effective manner.


9. Second, underwriting. Insurers must practice fair and responsible underwriting towards all customers - this is the baseline. MOS Alvin Tan spoke at length in his address to Parliament last month on how this should be applied to persons with disabilities and those with mental health conditions.

10. All applications must be objectively assessed, using reliable data relevant to the risks being underwritten. No application should be rejected solely based on the applicant’s declared personal information, such as the existence of a disability or medical condition. Where an application must be rejected or accepted with conditions given the higher risk it poses, the insurer should help their customers understand the basis for the decision.

11. I urge insurers to live out these expectations well. I further encourage insurers to continue their work with the medical and research communities to gather relevant data, so that more customers over time can enjoy good coverage at reasonable cost.

12. Treating customers right must involve robust and data driven assessments of their risk during underwriting.


13Third, on sales and advisory. Insurers can do more to offer holistic financial advice and solutions, rather than merely selling products. In Singapore, we have tools to help insurers and their representatives do this well.

14. For example, SGFinDex allows customers to quickly pull together a holistic picture of their finances, including insurance coverage. This speeds up the fact-find process. For one insurer, this has shortened from two days to a few minutes.

15Last year, MAS, MoneySense and the CPF Board, together with LIA and other industry associations, launched the Basic Financial Planning Guide. The Guide simplifies the financial planning journey for consumers. It provides easy to understand and easy to implement rules of thumb for individuals at different life stages. For instance, setting aside 3 to 6 months’ worth of expenses in cash or near cash products as emergency funds. Or spending no more than 15% of their take home salary on insurance protection.

16. The Guide also includes information on relevant government schemes. For example, how baseline schemes like MediShield Life should be taken into account when considering the purchase of additional medical insurance coverage.

17. Put together, SGFinDex and the Guide allow a customer and his trusted financial advisor to quickly align on gaps in the customer’s financial plans, as well as appropriate actions to close the gaps. This could mean paying off a loan, or setting aside emergency funds, instead of purchasing an insurance product. Granted, not all conversations translate into immediate sales. However, we believe sound advice provided by insurers and their representatives will translate into greater customer loyalty, and future sales when new needs arise.

18. MAS is also proposing to reduce the information that financial advisers are required to collect for the fact find process, if they recommend term life and standard critical illness policies based on the rules of thumb in the Guide. We hope that this will encourage the sale and purchase of such simple and cost-effective products to help Singaporeans obtain sufficient insurance.

19. We would like to see all insurers come alongside this effort by incorporating the rules of thumb in your sales platforms and processes; and by training your representatives to use them intentionally and effectively, including training them on relevant government schemes. MAS will continue to progressively widen the data coverage of SGFinDex, and improve the user experience, to make it as useful as can be. Any feedback on how it can be improved is most welcomed.

20. Treating customers right must involve nurturing representatives and building processes that consistently prioritise sound advice to customers over clinching an immediate sale.


21. Fourth, post-sales, customers should continue to receive fair treatment and a seamless user experience.

22. Life insurers have been empowering customers through digital tools. Today, customers can conveniently pay premiums, submit claims, or view policy documents through some insurers’ web portals.

23. To complement this, MAS has amended our regulations to allow online nomination of beneficiaries by policyholders. Some insurers have embraced this, with web portals enhanced to allow secure online attestation and online witnessing to be conducted at the policyholders' convenience. I encourage those who have not done so, not to fall behind.

24. Separately, should customers raise a complaint or face any difficulty that requires assistance by the insurer, insurers should have effective channels to address customers concerns promptly and effectively.

25. Treating customers right must involve continued investments in efficient, effective, and empathetic after sales service and engagement channels.


26. Finally, the tone from the top is critical to drive the right culture, where treating customers fairly and well are at the heart of all that you do. Board and senior management must send a clear signal that profits do not come before values and ethics. Compensation structures must motivate not just high performance but also right conduct. Treating customers right must include an engaged board and senior management who will model what it means to treat customers right in every area of business, and who will hold staff accountable on the same.

27. Building trust goes beyond doing what is legally and contractually required, and it is accomplished through the accumulation of small actions over time. Some of these actions will not be seen by your customers, like how you design products and reward representatives. But they nonetheless contribute to a culture within the firm and your agency force, that if you get right, will fuel a virtuous cycle. Representatives will advise their customers responsibly, complaints will be handled empathetically, and customers will have greater confidence in being assisted with their protection needs.

28. As MAS’ Guidelines on Fair Dealing is finalised, I hope that life insurers will respond with commitment, resolve, and investments, to deliver superior customer outcomes using levers in every part of your business, and to keep the Singapore life insurance industry resilient, vibrant, and a trusted partner, for life.

29. Thank you for your kind attention. Please enjoy the rest of the luncheon.