SanLu Milk – AIA – GEL

Sigh. It seemed there are not much positive news when one open the newspaper nowadays. All the market figures have been a sea of red with an occasional green. It’s really quite depressing. At this period of time where I feel all of us must stand together to survive this crisis, there are more depressing news such as the toxic Sanlu Milk products from China and natural disasters here and there. Is this really a bad year for all of us? I’ve read that 52,857 children has been hospitalised, 4 children have died and 104 are still in serious condition, with symptoms including kidney stones. It suddenly struck me deadly that so many products have milk in it, which might cause the contaminated products to flow into Singapore unknowingly.

The follow items have been recalled due to the possibility of containing the toxic milk.
-M&M’s
-Snickers
-Mento’s yougurt bottle
-Oreo wafer sticks
-Dove chocolate
-Monmilk
-Dutchlady sterilised milk
-Wall’s All Natural Mango
-Mini poppers Ice-cream
-Magnum Icecream
-Moo Sandwich Icecream
-Mini cornetto
-Youcan Icecream

Please avoid consuming them and spread this to everyone you know.

China….What are you doing???? The overpopulated country who always prided themselves on their achievements but hardly sorry for the heinous catastrophes they have caused! Incidents like that are not the first time already! And this time we’re talking about babies. Innocent and fragile lives who step into the mortal world with a fresh start. They cant choose what to drink, only to consume whatever their parents gave them. The parents must be heartbroken, to think they fed poisonous milk which harms or take away their babies’ lives by their own 2 hands! How would you feel?? This is not an issue whereby money can make amends.

Many people especially my clients have been asking me what will happen to AIA and should they surrender their policies with them given the current situation for AIG. Yes, Im from Great Eastern, you forgot again, dont you? =P

This is like the 2nd crisis of AIA after their “Critical Year Option” storm in Jun, 2003.
Im really shocked of AIG’s situation because….they’re the largest insurance company in the whole world! Oh my god, really. Neither happy nor sad. Whether you like it or not, we know that this symptom really hints that whole world might be taken by storm, DESPITE their exposure to the Sub-prime issues or Lehman Brothers and its affiliates. Because if AIA’s insurance claims cant be approved….I dont even dare to imagine what will happen. They are distributed across 130 countries and god knows how many policyholders!

Im really quite surprised that so many Singaporeans are so..prudent. Hmmm…of course first thing first, I will ask what kind of policies are that, the remaining terms of years etc, purely for curiosity. Some agents loitters around outside AIA passing namecards soliciting business. Geez…how low can they get. It’s like 落井下石. There are even some unethical agents persuading AIA’s policyholders to surrender their policies. Please dont heed their advice. As of now, I still dont see the need to go surrender AIA’s policies especially when it results in a loss of coverage or cash value. Not a wise move at all. The situation is not as gloomy as it may looks.

Firstly, the U.S government has given an unprecedented loan of up to 85 billion dollars to AIG to help it tide over it’s cashflow problems. As the term “cashflow” suggests, it means they did not have enough time to liquidate some of their assets to pay the liabilities which they’re guaranteed to pay for sub-prime borrowers as guarantors, and not that they’re teetering on bankruptcy.

Secondly, for a country as Kiasu, Kia-si as Singapore, how can the Singapore Authorities easily allow such risk to easily penetrate Singapore? MAS, the Monetary Authority of Singapore MAS requires all life insurance companies to have a minimum capital adequacy ratio of 120% for their life funds. What it means? It means, it’s like a compulsory pre-deposit which you have to give me, erm no, to PLACE with me AS ASSURANCE if you wanna earn money from my citizens thus reducing the income tax and GST(goods & services tax) that I can earn from them via their income and consumption. *rOllz eyes*

Although, nothing is 100% guaranteed in this world. The Lehman Brothers has been standing there erect and tall for the past 100 years and more, yet it has fallen just like how people thought Titanic will never have sink. AIG and AIA is based in U.S. There’s no doubt they would be most affected. Generally, the closer one links to U.S, the greater will be the impact, just like earthquake. Except that earthquake links by territory, this links by the area of investments and the country of origin.

When one is headquartered in U.S, it makes sense that if it falls into a financial turmoil, the last thing it can do after approaching lenders/government for assistance or selling away liquidable assets, is to close down branches they have in other countries. The smallest country perhaps, or either, the least profitable branch, to get some cash first. So AIG and AIA in Singapore, I wont swear on my life that it’s really going to be all rosy and sunny ALL THE WAY. It’s OK now and what lies in the future…seriously nobody knows….hopefully there’s a silver lining.

I certainly hope AIA is as rich as it portrays and that AIA Singapore’s top man, the executive vice-president and general manager, Mark O’Dell has resigned from the company with immediate effect truly by personal reasons like what AIA claimed and not otherwise. This guy, really shouldnt leave so urgently at this time.

Finally, some asked, “So how is Great Eastern doing? Any danger looming? Why has Mr Tan Beng Lee to retire as Group CEO at this period of time?”

To quote our M.D

Dear all Agency Leaders
Financial markets have been affected by the financial turmoil in the USA.
Great Eastern is pleased to inform all our policyholders that we have more than enough
capital and financial resources to honour all our obligations (ie claims, maturity
proceeds, surrenders, and other liabilities) to policyholders at all times.
MAS requires all life insurance companies to have a minimum capital adequacy ratio of
120% for their life funds. Both Great Eastern Life and OAC have a capital adequacy ratio
of over 250%.

Our life funds have insignificant exposure to sub-prime and Lehman securities. The
majority of our life funds is invested in fixed income securities, including corporate and
government bonds.

Regards,
Tan Hak Leh
MD, Singapore
Great Eastern Life Assurance Co Ltd
Reg. No. 1908 00011G

Time to 老黄卖瓜,自卖自夸? HAHAHA.

Okie

Great Eastern Life(GEL) is very solvent.
Like what our M.D said, GEL has more than 250% capital adequacy ratio, more than enough to cover all claims or maturities. Strong market share of 28.7% in terms of weighted premiums of new business. Earlier this year, GEL Declares Special Bonus of $287 Million for 2007. For your info, this Special bonus are not those in the policies. These are extra bonus which GEL declared to their policyholders on their own freewill. Also, few months back GEL gives $500,000 to NUS to establish bursary in memory of the late Howe Yoon Chong. This year May, GEL has pledged 2 million RMB to ChongQing Government for the earthquake. Just 1 week ago on 15th Sep, GEL still continue to distribute its high annual dividend payout of 4% GreatLink Global Real Estate Securities Fund even though subjected to the harsh market economy. This year JUNE, GEL’s limited period product SupremeSaver, a fixed deposit product offering high annual projected interest of 3.18%, 3.28% and 3.38% consecutively(depends on capital amount tier) has also fetched more than 600million in just that 1 month. Besides that, as this year is GEL’s 100th birthday, GEL is celebrating their birthday with a Centennial Wish Lucky Draw by giving out $10,000 every month for this whole year for lucky policyholders and also another $10,000 every month for lucky GEL life planners.

Not trying to praise my own company for it’s achievements but these are plain facts and not of biased opinions. Moreover, does it seem to you a company which is tight on it’s finances will be so generous in so many aspects just for appearance sake? Probably not.

CEO Mr Tan Beng Lee’s leaving
Ahem. A better word to replace “leaving” would be “retired”! He’s already 65 and has worked in GEL for 8 long years. Give him a break ya? Lol. Mr Ng Keng Hooi, 53, will succeed Mr Tan Beng Lee. He will join Great Eastern Holdings with effect from 1 December 2008. Mr Tan will help ensure a smooth transition in leadership. Therefore you can well deduce such a decision cant be made in like few weeks or months? GEL cant possibly anyhow find a Ah Mao Ah Gao to replace the CEO immediately right? We, the planners have know the news around 6months back. Which means the decision might have been planned around 1 year ago.

GEL is stable and has strong financial backing.
GEL is based in Singapore, a company with strong market share and a subsidiary of OCBC bank. GEL also have other branches in other countries like Malaysia, Vietnam etc. So to speak, to assume the worse, GEL will close down other branches in other countries first instead of closing it’s headquarters in Singapore, by which OCBC will strongly discourage. GEL is an old and established company, turning 100 years old in 2008, with prudent and conservative approaches in all their management of assets and life funds. Only an insignificant 0.47% of GEL’s investments are with Lehman Brothers so we’re not really affected. Like what our M.D said, majority of GEL’s own life funds is invested in fixed income securities, including corporate and government bonds. You will really learn to appreciate the beauty of diversification and investing in bonds when economy hits low.

I would say GEL is a very very very prudent company, to follow after the style of OCBC bank. Like you can see when almost every bank and insurance company in the country has launched their China, Korea or Vietnam funds, OCBC and GEL is always the last to launch. Lol. But they’re prudent! Most of the times, GEL’s project returns on illustrations are very conservative but they often under-promise and over-deliver. All the past records can show and I’ve seen them before.

I meant to write this entry few days back but simply cant find the time. And this entry took longer than I’ve expected. Hopefully it serves some assurance to all of you out there, no matter you’re AIA, Prudential, NTUC or Great Eastern policyholders. We’re all 1 big family. 唇亡齿寒。

Ah seriously I have no time to lament more already. If you have read this entry up till here, I appreciate your patience and attention. Thank you! Hope I haven bore you. Lol. Though most of my friends wouldnt be that interested in finance news and stuff I guess. Haha. Ah yaya I gotta rush for my appointment already. A referral by my brother. Hmm.. By the way, some of my friends received my sms about a car showcase recently and outright assumed Im moonlighting or changed job when they didnt even have the patience to read till the end of the message. Lol. Im simply forwarding the message for my brother who is a car agent now. He’s doing really great now, Im happy for him. Therefore anyone wanna buy cars, I can introduce him. He might be able to give a better deal with more freebies etc. As for me, Im still with GEL. Time flies, coming 4 years+ already with GEL. Therefore any queries can always ask me, I’ll be happy to answer. Of course even more happy if you have business for me ya!

Haha Okie Cya. =)

(P/S No time to check the entry! Shall check tonight!. Meanwhile, pardon any typo~)

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