Participating Fund Update

Placing people over policies – we provide stable returns for you

At Etiqa, we are committed to managing our policyholders’ investments prudently over the long-term. We strive to maximize returns on the participating fund’s investments to ensure stable benefits for our customers, while maintaining the security of the fund.

 

As a valued policyholder of a participating policy from Etiqa, we are pleased to inform you that we will be maintaining the same bonus rates for the year 2018.

About the Participating Life Insurance Fund (“Par Fund”)

As of 31 December 2018, the total market value of policy assets held by the Par Fund is S$637.1 million, a 65% increase from past year.

Par Fund Performance over the last 3 years

The Par Fund delivered a total investment return of -3.32% for the year ended 31 December 2018. The investment return and total expense ratio for the past three years are as follows.

Year201620172018
Investment Returns13.97%10.99%-3.32%
Total  Expense Ratio2NA 5.32% 8.07%

1This investment return is shown after deducting investment expenses incurred in managing the Par Fund.

2 The total expense ratio is the proportion of total expenses incurred by the Par Fund to the assets of the Par Fund. These expenses include costs such as management expenses. In 2018, additional items such as investment, distribution, taxation and other expenses were added in to be in line with the revised industry guidelines.

Our key attributes:

Financial Strength

We are the insurance arm of Maybank Group, which is among Asia’s leading banking groups and South East Asia’s fourth largest bank by assets. Furthermore, we are rated “A” by Fitch in 2019 for our financial credibility and stable outlook.

Prudent Investment

Your money is invested using a sensible approach and we aim to offer you competitive bonuses for your policy.

Customer-Centricity

We are committed to keeping things as simple as possible as we place people over policies. We believe in explaining what happens to your money in a clear and concise manner.

Stability for Our Policyholders

Etiqa tries to provide stable returns over the life of your participating policy, thus we adopt a concept known as smoothing. Simply put, instead of simply distributing what the Par Fund makes, we try to spread profits and losses over the life of your plan. For example, if the Par Fund performance is particularly good in one year, we may retain some of the investment returns so that your bonus rates can be maintained in years the Par Fund does not perform so well. Overall, the effect of smoothing is intended to be neutral over time.

This graph is not representative of any particular Etiqa fund, product or specific time period.

For more information, please refer to your personal Annual Bonus Statement which was sent to you recently and our Participating Fund Update booklet showcasing the update for the year ended 31 December 2018. If you would like to find out more about the participating fund, please refer to the Frequently Asked Questions (FAQ) below.

Alternatively, you may contact your representative via WhatsApp messaging at +65 8677 8780 or email us at customer.service@etiqa.com.sg.

Your Participating Policy with Etiqa

 

A Guide to How We Manage the Fund

A participating policy is a plan that participates or shares in the profits of the participating fund of the insurer. It provides guaranteed benefits and non-guaranteed bonuses. Your premiums, along with those of other policyholders’, are pooled into a designated participating fund. Etiqa aims to provide stable returns for your participating policy and the fund aims to achieve this by strategically investing in a mix of assets, including bonds, equities and money market instruments to generate an investment return. You are entitled to a share of the Par Fund’s profits, distributed to you by adding bonuses to your insurance policy.

Bonuses are reviewed and declared annually. Based on the Par Fund’s performance, we allocate part of the surplus of the fund to your policy via bonuses to increase its value. Each year, Etiqa informs policyholders with participating policies of the amount of bonus that may be added to their policies.

All bonus allocations are approved by Etiqa’s Board of Directors, based on recommendations made by our Appointed Actuary. When making recommendations, the Appointed Actuary will consider key factors including past investment performance of the Par Fund, economic outlook, claims experience, expenses, surrenders and lapses.

When declaring bonuses, we consider average performance over a period longer than one year to avoid large short-term fluctuations in year to year investment performance.

The bonuses declared on your policy, if any, will be added to your policy either on 1 April 2019 or at your policy anniversary in the year, whichever is later. Please refer to your bonus statement for details on the bonus declared on your policy. As there are no changes to the bonus rates, your original policy illustration remains unchanged. You may contact your representative if you wish to receive a copy of your policy illustration.

Frequently Asked Questions (FAQ)

  • Investment strategy

Investment of the Par Fund follows a strategic asset allocation which was decided when the fund was first set-up. This will be updated if there are significant changes in the profile of the fund. The strategic asset allocation of the Par Fund is 25% equities, 73% bonds and 2% cash.

  • The Par Fund’s investment return

The fund’s investment return is critical to the Par Fund’s performance. We manage the Par Fund with a long-term view of delivering stable and reasonable returns for all customers, while maintaining the financial soundness of the fund.

  • Non-investment factors

Several non-investment factors may impact performance of the Par Fund. These factors include claims and surrender experience, as well as expenses.

The value of the Par Fund is affected by different types of expenses relating to the participating policies. These include claims payment, investment fees relating to the management of assets, marketing, other distribution-related expenses and general management expenses.

Maybank Asset Management Singapore Pte. Ltd. (“MAMS”) manages our participating fund. MAMS is comprised of teams of specialist fund managers and is a fully owned subsidiary of Maybank Asset Management Group Berhad. The group manages assets in excess of US$6.3 billion (as at 31 December 2018).

For more information on MAMS, please visit http://www.maybank-am.com.sg.

The key risk factors that could influence the performance of the Par Fund include investment returns, lapses, surrender experience, claims experience and expenses incurred. The Par Fund’s assets comprise accumulated premiums from different policies within the Par Fund. The accumulated assets will be used to fund policy benefits, expenses and charges incurred in the operation of the Par Fund, with surpluses to be invested accordingly. Therefore, key risks affecting the investment performance of the Par Fund are shared by all policies in the Par Fund.

The future performance of the Par Fund is determined by factors such as investment returns, claims experience and expenses incurred by or allocated to the Fund. This future performance will determine bonuses to be paid in the future. Bonuses not yet distributed/declared are not guaranteed.

When considering suitable bonus rates, we consider average performance over a period longer than one year to minimise any short term fluctuation. We will make changes to bonus rates only after thorough review.

If you have questions, please do not hesitate to contact your representative. Alternatively, you may wish to contact our customer care consultants via WhatsApp messaging at +65 8677 8780 or email us at customer.service@etiqa.com.sg.