Is NTUC INCOME insurance safe?
October 12th, 2008 by ALVIN SOONG
NTUC Income’s Financial Position
NTUC Income would like to assure our policyholders and partners that the recent financial turmoil in the US and our exposure to Lehman Brothers, Merrill Lynch and AIG have not impacted our financial strength. NTUC Income’s continued AA credit rating by Standard & Poor’s makes us one of the strongest insurance companies in the region.
Our exposure to the three affected companies in our Insurance Funds (excluding investment-linked policies) amounts to less than 0.3%. For our investment-linked funds, our exposure to these companies is limited to 3 funds out of 15, and ranges from 0.1% to 0.6% of the funds. Our exposure to the whole financial sector in the US is a modest 3.6% of our Insurance Funds. This exposure is insignificant and has little impact on our financial standing and our ability to meet all our financial obligations.
NTUC Income takes a long term view with respect to our investment strategy as we believe that this will provide the best returns to our policyholders. Our investment strategy has and will continue to be anchored on prudence, and our portfolio is well diversified. We are pleased that our investment strategy has thus far delivered attractive yields to our policyholders.
Also from MAS the following statement was addressed on all insurance matters. Pls download pdf:
mas-to-protect-policyholders.pdf
NTUC Income Maintains S & P’s AA Rating Despite Financial Turmoil
Rating the highest among all financial institutions in Singapore and reflects its financial strength
SINGAPORE, 9 October 2008 – NTUC Income had its AA rating re-affirmed today in the latest Standard and Poor’s ratings, making it one of the highest rated financial institutions in Singapore for its financial strength.
Under the ratings system used by S & P, a company rated ‘AA’ has a very strong capacity to meet its financial commitments.
NTUC Income’s Chief Executive Tan Suee Chieh said: “Despite the current financial upheavals, Standard and Poor’s AA rating re-affirms our strong financial position and puts NTUC Income second to none among financial institutions in Singapore. Our policyholders can be assured that their money is safe with us. We are prudent and well diversified in our investments, and will continue to be so.”
The S&P report highlighted that NTUC Income has prudent reserving standards, that its investment strategy is generally conservative, and that it is likely to receive extraordinary support from the government if needed.
“Local financial institutions such as NTUC Income have weathered the financial turmoil only because of our sound fundamentals, diversification strategy and strong corporate governance. We have a strong government, a strong MAS, and a strong parent in NTUC. So, when times are tough, it is safest for customers to stay at home,” he added.
Comparitively, insurance is regulated by MAS and has tighter regulations compared to banks now.
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An interesting news to note also yesterday, the ex ceo Mr Tan Kin Lian of NTUC INCOME also lead a protest rally for 500 investors to protest against DBS relationship managers who sell the products linked to now bankrupt investment bank Lehman Brothers.
We would follow up to see how the news followup from here.
