The bonus, which stems from a portion of life insurance premiums that have been invested, is not just based on an insurer's investment performance in a single year.

It is instead 'smoothed' over the duration of the plan so that insurers can manage well in good and bad times, said Mr Thomson, who was speaking after the LIA's results briefing yesterday.

This also means any bonus changes will be gradual.

Only traditional whole life and endowment policies have reversionary bonuses.

'(There have been) two to three years of reasonable growth so I'm not sure that they'll necessarily have to be downvalued,' added Mr Thomson, who is also president and chief executive of Manulife Singapore.

There have been concerns that bonuses will fall next year as even relatively safe assets have not been spared the carnage from the financial crisis.

'There might be the ability to maintain previous bonuses' levels, though it's still too early to tell, as it has a lot to do with how the markets perform between now and bonus declaration time,' Mr Thomson said.

'Most companies will try to maintain bonus levels if they can.'

Mr Thomson, who took over the LIA post from Mr Mark O'Dell last month, shared some thoughts on his strategy for the association going into the new year.

He is keen to increase 'professionalism' among members and for them to be in a career they can be proud of.

'We want to take this industry to another level,' he said, adding that he is keen to bring 'fair dealing' into the broader aspects of financial planning.

The focus, he said, should be shifted towards needs-based selling rather than product pushing.

Mr Thomson said the fundamentals of life insurance remain strong despite the global financial crisis.

'The purpose of insurance is to make sure that you and your family are taken care of in adverse situations where protection is of the utmost importance.

'The current economic climate should not be reason for deferring one's protection needs. Of course it is prudent that people should stay within their means and invest in what they can afford.'

The life insurance industry recorded $1.42 billion of new premiums in the first nine months of this year, a 21 per cent increase over the same period a year ago.

Mr Thomson said the good showing was due to robust annual premium sales during the same period.

gabrielc@sph.com.sg