1 NTUC Income Day is an occasion for the co-operative to review its performance and to thank its business partners for their contribution.
2 This year's Income Day is special in two in two respects. NTUC Income is celebrating its 35th anniversary. It has also just hosted the conference of the International Cooperative and Mutual Insurance Federation (ICMIF). The 200 international delegates who participated in this conference are here to celebrate this occasion tonight.
3 I spoke at the opening of the conference three days ago. Tonight, I am happy to address the delegates again.
4 When NTUC Income joined the ICMIF in 1976, it was a small co-operative. Its total assets amounted to only $28 million. The senior managers told me that they have benefited from the involvement with ICMIF over the past years. The larger and more established members have been generous in sharing their experience and know-how.
5 This has helped NTUC Income to grow its business over the past three decades, by learning how to manage its insurance business efficiently and how to use the co-operative characteristics as a competitive advantage in the market place.
6 Today, NTUC Income has now grown to be a fairly large co-operative. Its total assets today have reached $15,000 million, or US$9 billion. It has been given a strong financial rating of AA by Standard and Poors. I am told that this is the highest rating for any insurance company in Asia.
7 NTUC Income is a valued partner of the labour union over the past three and a half decades.
8 NTUC Income was set up by the National Trades Union Congress (NTUC) and its affiliates. The initial capital came from the labour movement. At the time the working class, with low incomes, was largely uninsured. NTUC Income made life insurance available at an affordable cost to the workers. At that time, it was usual for life insurance to be paid by annual premium, which was outside the reach of workers. NTUC Income introduced a new system to allow the insurance premiums to be collected in small monthly installments through salary deductions. It allowed life insurance to be purchased for a monthly premium as low as $5.
9 It also used trade union officials to be its sales agents to sell life insurance to their colleagues at the workplace. This helped to reduce the cost of distribution of life insurance. It also provided an additional income to supplement the earnings of the trade unionists.
10 Due to the low size of the premium and the relatively higher administrative cost, this segment was ignored by the private insurers. NTUC Income's entry helped to develop this market.
11 Much has changed over the years. Today, most insurance premiums are paid through direct debit from bank accounts through the automated GIRO system. Most of the insurance sales are now done by full time insurance advisers who have to meet the high competency standards mandated by the regulators.
12 NTUC Income has been able to keep up with the changes, and to upgrade its operations by using modern technology. However, it has maintained its original aim of serving the workers by making insurance affordable to them.
13 In recent years, the Government decided to launch one new insurance scheme and privatised two existing schemes that were previously operated by the Central Provident Fund Board. It invited tenders from the private insurers to operate the three schemes.
14 NTUC Income was successful in all the three tenders. It was able to win 50% of the portfolio for a scheme to provide an income for long-term disability and a compulsory scheme to cover dependents in the event of the death of the breadwinner. It won 100% of the portfolio of a medical insurance scheme.
15 More than 1 million people are insured under the three schemes. Most of them are from the working class. I am glad that NTUC Income has been able to offer attractive terms to these insured policyholders. It was able to achieve this by operating efficiently and at lower cost. More importantly, it operates the scheme on co-operative principles, so that the premium will be kept as low as possible.
16 The NTUC has also covered all union members for life insurance for mishaps outside of work, through the SLF Gift Plus cover. This has been of great help to the families of those who were unfortunate to meet such mishaps.
17 NTUC Income’s success is a source of pride to the labour movement in Singapore. It is an example of the significant contribution that the labour movement can make, outside of traditional collective bargaining, to improve the quality of life for many people in the community.
18 The best way for any business to stay in business is to be among the best in its market. This can be achieved by constantly adapting and innovating its operation, by continuously improving its products and by improving the quality of its service.
19 We are now in the world of the Internet. NTUC Income has kept abreast of technology and has used the Internet effectively to communicate and keep it touch with its 1.8 million policyholders. Its website has been voted to be the best insurance website in Asia. I understand that its website has now achieved 50 million hits a month. This must make it one of the most active website in Singapore.
20 I am delighted to join you on the occasion of the 35th anniversary. Let me wish the co-operative continuing success in the years ahead.
*****
For media queries, please contact:
Sherwin Chua
Executive
Corporate Communications Department
National Trades Union Congress
DID 6213 8189
HP 9338 3190
Email chuakh@ntuc.org.sg
