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Life Insurance - Life insurance bonuses unlikely to fall
Singapore’s Life Insurance Association (LIA) president, Darren Thomson revealed that despite the downturn of the current economy, next year’s reversionary bonuses are unlikely to fall.
After concerns arose that bonuses will fall early next year, Mr Thomson, also president and chief executive of Manulife Singapore, said that the bonuses are “smoothed” over steadily making it a very gradual process in order to make it simpler for insurers to manage during both good and bad times.
He added that “There might be the ability to maintain previous bonuses levels, though it’s still too early to tell, as it has a lot to do with how the markets perform between now and bonus declaration time.”
The bonus acts as a small portion of life insurance premiums. Thomson added that it is not only based on the insurer’s investment performance during the previous year.
He said: “There have been two to three years of reasonable growth so I’m not sure that they’ll necessarily have to be downvalued.”
Yet he explained that bonus levels may remain stable as “most companies will try to maintain bonus levels.”
Meanwhile, insurer Standard Life recently announced cuts in its final bonus payments with its nine to 13 per cent reductions affecting approximately two million customers
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