What 2015 taught us about investing

Keep insurance needs updated, relevant

Dr Khoo expects the market to continue to be volatile next year and advises investors to review their financial portfolios to make sure they still meet their long-term financial objectives.
Dr Khoo expects the market to continue to be volatile next year and advises investors to review their financial portfolios to make sure they still meet their long-term financial objectives.PHOTO: GREAT EASTERN LIFE


President of the Life Insurance Association Singapore (LIA)

Q What were the best and worst things that happened to you (financially) this year?

A I started to invest in H-shares since the end of last year. Fortunately, the market rallied up till May.

My portfolio was giving me annualised returns of close to 100 per cent (in absolute terms, around 30 per cent).

However, the market took a large turn in June. Thankfully, I managed to pare down around 20 per cent of my portfolio before the downturn as part of rebalancing my portfolio. Now the market has dropped substantially to pretty much where I started a year back.

These are the ups and downs of the financial market that one has to live with in the short term. Having said this, the investment opportunities are there for the long term and I am looking to continue to increase the equity asset in my portfolio.

Q How has 2015 been for your industry?

A It has been a busy but fruitful year for the industry. In 2015, we rolled out various initiatives as part of our ongoing efforts to bridge the protection gap and secure the quality of life of the community in Singapore.

With the introduction of compareFIRST and Direct Purchase Insurance (DPI) products, consumers now have access to more information and choice, giving them greater flexibility to manage their own portfolios to meet their individual needs.

Following the implementation of MediShield Life, the insurers committed to not increase the premiums for the "top up" portion of all Integrated Shield Plans (IPs) - which offer more choices to increase medical insurance coverage beyond MediShield - over the next 12 months to ensure a smooth transition for IP policyholders.

The LIA and its members will continue to work with the Monetary Authority of Singapore on industry guidelines for the benefit of consumers and for the healthy growth and development of the industry.

Q How do you see 2016 panning out?

A LIA will continue to work closely with the Government and relevant bodies to manage the rising healthcare costs in Singapore. This includes a bigger focus on seeking effective and innovative ways to improve price transparency and comparison of professional fees within the healthcare industry, and better manage claims costs to keep premiums affordable for all.

The industry will also continue to proactively work to further improve internal and external communication on how MediShield Life and IPs work and complement each other, as well as benefit policyholders. We believe that increasing awareness and improving public education on health insurance will help ensure that the community remains well served.

The industry will also look at leveraging technology, big data and analytics to drive further innovation in the products and services we provide so as to better meet the varied needs of customers.

There will also be greater collaboration among key players in the industry to share best practices and achieve higher standards in our services as Singapore moves towards becoming the insurance hub in the region.

Q What is one piece of financial advice you would give to retail investors, looking ahead in 2016?

A I expect the market to continue to be volatile, with uncertain economic growth and the continued low-interest-rate environment in many major markets. All the more, it is important for individuals to plan for their long-term financial needs while at the same time ensuring that their immediate needs for insurance are addressed and planned for.

It is timely to review and re-balance your financial portfolio to ensure that your portfolio continues to deliver the returns you expect to meet your long-term financial needs and objectives. You will be in a better position to take advantage of potential opportunities which could arise from market corrections, such as improved attractiveness in the valuation of the equity markets.

You should also always be mindful that your basic insurance needs are updated and relevant, given rising healthcare costs and the general cost of living.

In this regard, it is important to review your insurance coverage, such as hospital and surgical insurance, critical illness insurance, disability income insurance as well as personal accident plan, to ensure that it is adequate and, at the same time, affordable.

A version of this article appeared in the print edition of The Sunday Times on December 27, 2015, with the headline 'Keep insurance needs updated, relevant'. Print Edition | Subscribe