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, Mr Thomson told The Straits Times on Tuesday.

They are 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.

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 financial carnage.

'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,' said Mr Thomson.

'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 insights of his strategy for the association going into the new year.

Read the full story in Wednesday's edition of The Straits Times.