One big recent issue was that purchasers of cars cannot choose their insurance company - you have termed that anti-competitive. However, Income has also earlier insisted that repair work be done at its designated workshops. How do you reconcile this "irony"?
Many said Income is trying to salvage its diminishing market share in motor insurance. I am sure there are more reasons to this, perhaps you can enlighten us?
Reply
Under our motor insurance plan, we will arrange the repairs at our designated Quality workshop. This allows us to ensure the quality of repair and bring down the repair cost, by preventing inflated claims. We are able to bring down the cost of insurance by 10% to 15% for our customers.
A consumer who does not like our motor insurance product is free to insure his or her car with any of 30 insurance companies in the market. More than 30% choose NTUC Income to enjoy our service and lower premium rates.
This year, we suffer a temporary decline in market share as the distributors of new cars coerce their customers to take the insurance with their tied insurer. The customer is not given a free choice. As the distributor has a monopoly in the distribution of the car models, they are able to control the market for the purchase of insurance on new cars. As many people changed their cars during the past year, we lost out on this market.
We expect to regain our market share when the owners buy their own insurance for the second year.
Tan Kin Lian
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