the board of directors ’ independence and oversight on risk management ; ensuring that the board has the appropriate skills and time to perform its role effectively ; and requiring the board to set appropriate remuneration policies to prevent excessive risk - taking. income should benchmark itself against the best governance practices even though it is set up as a co - operative. addressing the gaps in insurance needs 11. as for opportunities, there remain gaps in singaporeans ’ insurance protection needs. studies commissioned by the insurance industry have suggested that singaporeans are under - insured. many are not insured at all while of those who are, many are underinsured. the under - insurance is greatest in the 30 – 49 age group. this is not surprising. singaporeans in that age group tend to have heavier financial commitments and a greater number of dependants. so they find the cost of having to pay insurance premium a stretch. unfortunately, if they were to meet an untimely death, critical illness or physical disability, their dependants would be caught without a breadwinner and saddled with financial commitments like mortgages and so on. 12. there are many reasons for the under - insurance. it could be due to complacency and a false sense of security that misfortune would not befall the individual. or it could also be a general lack of awareness of how much coverage would be considered adequate. but the more likely reason is the perception that getting the recommended amount of insurance protection is costly and beyond their means. hence, it is given lower priority amidst other more pressing financial commitments like housing, children ’ s education and other day - to - day needs. 13. what can we do to keep insurance protection affordable? i urge the insurance industry to make a more concerted effort to address this. part of the problem lies in the conventional practice of insurers in bundling the savings and protection elements into what is known as whole life plans. since the savings element in such whole life plans can be very significant, the insurance premiums could be 3 – 5 times that of pure protection term assurance plans, for the same level of protection. i faced the same problem when i first started work. i could not afford a whole life plan but had the good sense to choose a term assurance policy. protecting my young family then was more important than leaving them my whole life insurance payout after they are all grown up when they need the sum of money the least. 14. the insurance industry should not

always push for a whole life plan as it may result in under insurance. it needs to place more emphasis on a pure protection plan like a simple term assurance which is a more cost - effective way of addressing the protection needs of singaporeans. the insurance adviser plays a critical role here. he or she is the first line of contact with the consumers and wields the greatest influence over what they purchase. he should sell what is appropriate to the protection needs of the customer and not maximise his or his company ’ s returns. he should always place the interests of his clients above his own. and it is the responsibility of every insurer to ensure that its advisers are properly trained and incentivised. this is especially important for customers from lower - income households where there are competing demands for limited income. otherwise, getting adequate insurance protection will be relegated to a lower priority in a working adult ’ s life, hence exposing his dependants to risks of the breadwinner ’ s premature death. 15. the insurance industry should also find ways to reach out to more singaporeans who are either uninsured or underinsured, and be prepared to go beyond the tied agency distribution model. i am pleased to note that over the years, the insurance industry has diversified its distribution channels to include banc assurance and direct sales. i urge the industry to do more, such as working with more employers and associations to offer group term insurance to cover the lives of their employees or their members. 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