Though group term insurance does not offer guaranteed renewability like individual Term Assurance policies, it nonetheless helps to supplement the shortfall in insurance coverage at an affordable rate. 16. Given its social mandate and objectives, INCOME should take the lead to address the shortfall in insurance protection. Here, I must add that when my insurer notified me, upon my reaching 65, that my Term Assurance has lapsed, I heaved a sigh of relief that it expired before me! I treated the premium paid as an expense. 17. MAS will also play its part in helping consumers make informed decisions when purchasing insurance. It will be working with the industry to enhance transparency in the disclosure of bundled insurance products such as the Whole Life plan. Currently it is unclear how much of the premium paid for a bundled insurance product goes towards providing protection, how much to savings and what the return on the investment is. This will help consumers make a better decision in planning his protection and financial needs. Conclusion 18. As you have declared publicly in your rebranding exercise, INCOME was born with a difference. Indeed, INCOME’s mission is to serve the interests of the policyholders first and foremost, before that of the shareholders. Its social role is to provide essential insurance cover which is accessible and affordable to the population. As you venture into wider segments of the market in line with the rising affluence of Singaporeans, you should not forget the basis of INCOME’s formation. 19.

For example, we see increased capacity in writing specialised risks like aviation, energy, marine and political risks. For the life insurance industry, we have also seen greater product innovation as well as increased interest from insurers offering more sophisticated products catering to the needs of the high net-worth and mass affluent segments. BIS Review 163/2010  1  Future challenges and opportunities 7. But greater challenges and opportunities lie ahead. Enhancing risk management capabilities 8. The recent global financial crisis has underscored the importance for financial institutions to have strong risk management capabilities. The use of risk management tools such as stress testing, for example, helps identify potential risks, and allows countermeasures to be instituted early. Insurers in Singapore would have to keep abreast of developments internationally, and should continually look for ways to deepen their risk management tools and capabilities. INCOME is no exception. But unlike some of the other insurers that are part of larger global financial institutions and can therefore leverage on their parents’ risk management expertise, INCOME does not have such an advantage. These global financial institutions have widely-tested risk management practices and more established risk management cultures, given their richer experience. INCOME would have to grow its risk management expertise internally, but it would do well to learn from these global players’ recent experiences. Strengthening governance 9. However, having risk management tools and capabilities alone will not be enough. The challenge is often in successfully integrating enterprise risk management into the insurer’s business, and this would require effective governance.