Insurance
Growth in life insurance sales
By Tan Kin Lian  •  May 9, 2011
The life insurance sales grew by 40% during the first quarter of 2011. However, the total assets grew by only 8% - a large part of it can be attributed to the higher stock market values. What account for the difference?

I suspect that a significant portion of the increase in sales is due to replacement of life insurance policies. Many insurance companies introduce new insurance products every year. Their insurance agents use the new products to get customers to stop an existing policy and "upgrade" to a "better policy". This is called "replacement of policy". When it happens, there is really no increase in sales. However, the insurance company usually count the new policy as a sale and does not deduct the termination of the existing policy.

When a life insurance company reports a spectacular increase in sales, the real increase may be quite small, as a large part ......
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By Tan Kin Lian
Mr Tan Kin Lian (fomer NTUC Income CEO) started his insurance career in 1966 in a local life insurance company. He has also worked in various positions as a computer programmer, organisation and methods officer and consulting actuary. Mr Tan writes daily in his blog. The information in his blog is transparent and has an open approach.
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