If interest rates continue to go up by another 2% within a year, I fear that Life Insurers will collapse

[Chase]

In recent years, some clients who bought life policies from their insurers enjoyed <3%pa returns (<2.3%pa in Singapore context). There are also some folks with matured policies parked with the same insurer and they are eligible to collect their accumulated bonus when they surrender their policies. In difficult times like this, some other individuals may also be forced to surrender their policies to pay for their housing loans or debts.

The recent sharp spike in interest rates will hurt insurers if they see a larger wave of redemption.

Illustration: You bought a $100K single-premium policy a few years ago, and you want to withdraw now. You may get your principle back + a little returns, but the insurer keeps your bonus (due to the early withdrawal). In the past, when interest rates are stable, the insurer will make extra money if you surrender early.

However, the insurer has parked your $100K in an ultra-safe PUB 2.9%pa ten-years bond which has not matured. Being ultra-safe, the yield is lower and a sharp spike in interest rate, makes the bond worth less in the resale market. Now, the insurer can only get $93K back (to cash out the PUB bond and repay the policyholder) and the insurer makes a lot less money or a loss.

If interest rates continues to go up by another 2% within a year, I fear that some life insurers will collapse

 

[sweetiepie]

If life insurers collapse means more whore

 

[Chase]

If life insurers collapse means more whore

First one in Asia affected
https://finance.yahoo.com/news/korean-insurer-heungkuk-delays-redemption-055905921.html

 

[blackmondy]

Insurance by its own definition is a ponzi scam.

 

[hbk75]

In recent years, some clients who bought life policies from their insurers enjoyed <3%pa returns (<2.3%pa in Singapore context). There are also some folks with matured policies parked with the same insurer and they are eligible to collect their accumulated bonus when they surrender their policies. In difficult times like this, some other individuals may also be forced to surrender their policies to pay for their housing loans or debts.

The recent sharp spike in interest rates will hurt insurers if they see a larger wave of redemption.

Illustration: You bought a $100K single-premium policy a few years ago, and you want to withdraw now. You may get your principle back + a little returns, but the insurer keeps your bonus (due to the early withdrawal). In the past, when interest rates are stable, the insurer will make extra money if you surrender early.

However, the insurer has parked your $100K in an ultra-safe PUB 2.9%pa ten-years bond which has not matured. Being ultra-safe, the yield is lower and a sharp spike in interest rate, makes the bond worth less in the resale market. Now, the insurer can only get $93K back (to cash out the PUB bond and repay the policyholder) and the insurer makes a lot less money or a loss.

If interest rates continues to go up by another 2% within a year, I fear that some life insurers will collapse

Where got difficult times. All condos and hdb snatched like free one.

 

[laksaboy]

So those insurance agents will have to cut back on their lavish gala dinners where they give out awards (e.g. 'million dollar round table') and fellate one another's egos.

 

[Bad New Brown]

My endowment policy matured in 2011 and I did not earn a cent after faithfully paying 10 years monthly regular premiums since then I never buy any insurance policy

 

[blackmondy]

Insurance biz turned for the worst once they started playing financial advisory roles.

 

[syed putra]

So those insurance agents will have to cut back on their lavish gala dinners where they give out awards (e.g. 'million dollar round table') and fellate one another's egos.

You should see the ones who failed to perform. Their commission seized by main agent and forced to resign by humiliating them.
This kind of sales strategy should be abolished.

 

[Chase]

So those insurance agents will have to cut back on their lavish gala dinners where they give out awards (e.g. 'million dollar round table') and fellate one another's egos.

The big boys collude with DBS to aid money laundering, including transactions for people from several sanctioned states because some policies can stay hidden from from CRS. I will expose the bank's wrongdoings because they don't return my Hyflux money by end of this year. Let US government deal with them. They also use Frankfurt and China branches to aid Russian transactions with Singapore. To patch their own holes, their internal audit also allows their MDs to lend money to Singaporeans who will in turn lend to their china/indian branch to shore up their balance sheet. So fun

 

[Chase]

My endowment policy matured in 2011 and I did not earn a cent after faithfully paying 10 years monthly regular premiums since then I never buy any insurance policy

LOL must be ntuc

 

[laksaboy]

Insurance biz turned for the worst once they started playing financial advisory roles.

I heard they call one another 'FC' now, abbreviation for financial consultant.

For example, rookie FC of the year, top performing FC of the year etc.

FC no longer means football club or fried chicken.

 

[jw5]

In recent years, some clients who bought life policies from their insurers enjoyed <3%pa returns (<2.3%pa in Singapore context). There are also some folks with matured policies parked with the same insurer and they are eligible to collect their accumulated bonus when they surrender their policies. In difficult times like this, some other individuals may also be forced to surrender their policies to pay for their housing loans or debts.

The recent sharp spike in interest rates will hurt insurers if they see a larger wave of redemption.

Illustration: You bought a $100K single-premium policy a few years ago, and you want to withdraw now. You may get your principle back + a little returns, but the insurer keeps your bonus (due to the early withdrawal). In the past, when interest rates are stable, the insurer will make extra money if you surrender early.

However, the insurer has parked your $100K in an ultra-safe PUB 2.9%pa ten-years bond which has not matured. Being ultra-safe, the yield is lower and a sharp spike in interest rate, makes the bond worth less in the resale market. Now, the insurer can only get $93K back (to cash out the PUB bond and repay the policyholder) and the insurer makes a lot less money or a loss.

If interest rates continues to go up by another 2% within a year, I fear that some life insurers will collapse

There is nothing to fear.

 

[Chase]

There is nothing to fear.

Large Canadian insurers are the most at risk as credit strains.
Others with slightly higher risks include HK, China, Korea and Euro boys.

 

[rushifa666]

Why are the vaxxed so concerned? Their imminent deaths will solve many problems, including this

 

[Chase]

Singapore’s central bank warned of “potential dysfunction” in global funding markets and liquidity strains on financial firms that could spill over to banks and companies, amid intensifying risks to international financial stability.

www.bloomberg.com/news/articles/2022-11-25/singapore-warns-of-potential-global-funding-markets-dysfunction

 

[gingerlyn]

I am eager to see condo owners to commit suicide especially those chow keng owners who are not rich and yet owning condo in the heartland areas of Jurong West and Yishun

 

[YamSeng]

Wonder what SSB is going to offer in the next few months.

 

[Loofydralb]

Why the need for insurance when the recession will have them jumping out the window in droves.

 

[rodent2005]

If interest goes up by another 2% point, I can take a few years off.