We issue participating insurance plans, which offer the Policyowners with non-guaranteed dividends/bonus. These insurance plans are designed to be held long term. Your premiums will be invested in an investment portfolio to support those policies according to our investment strategy, with the cost of policy benefits and expenses deducted as appropriate from premiums or assets. Your policy can share the divisible surplus (if any) from related products determined by us. We aim to ensure a fair way of sharing profits between Policyowners and Shareholders, and among different groups of Policyowners.
The Company will review and determine the dividend / bonus at least once a year, taking into consideration both past experience and future outlooks for all the factors including, but not limited to, the following:
Investment returns:
include both interest earnings and any changes in the market value of the products' backing asset. Depending on the asset allocation of the products, investment returns could be affected by fluctuations in interest income (both interest earnings and outlook of interest rate) and various market risks, including credit spread and default risk, fluctuations in equity-like asset prices and currency fluctuation of the backing asset against the policy currency.
Surrenders:
include policy surrender and lapse; and the corresponding impact on investment backing the products.
Claims:
include the cost of providing the death benefit and other insured benefits under the product.
Expense:
include both expenses directly related to the policy (e.g. commission, underwriting, issue and premium collection expense) and indirect expenses allocated to the product group (e.g. general administrative costs).
Future investment performance is unpredictable. Through our smoothing process, we aim to deliver more stable dividend / bonus payments. To stabilize the dividend / bonus, we may distribute a proportion of the financial performance in a particular year attributable to the Policyowners, with an aim to smooth out the short-term volatility of dividend / bonus rate over the course of the policy term. The actual dividends and bonuses declared may be different from those illustrated in any product information provided (e.g. benefit illustrations). If there are any changes in the actual dividends/bonuses against the illustration or in the projected future dividends/bonuses, such changes will be reflected in the policy anniversary statement.
The dividend / bonus recommendation, which is reviewed and endorsed by the Appointed Actuary, will be approved by the Board of Directors of the Company, including one or more Independent Non-Executive Directors.