Singapore, 28 October 2013 – Total number of new customers who bought mortgage insurance plans from OCBC Bank increased by more than 60% in the first nine months of 2013. The healthy growth was a result of more consumers wanting to hedge the risk of leaving behind unpaid mortgages without losing all the premiums when the policy expires. OCBC Bank’s new mortgage plans – Mortgage Protector Plus and Mortgage Protector Advantage – refund the premiums paid in full if no claim is made.

The Mortgage Protector Plus is a single premium mortgage insurance plan that was launched in February 2010. The Mortgage Protector Advantage, on the other hand, allows the customer to pay regular premiums either on a monthly or annual basis. This plan was launched in November 2012. Both plans remain the only mortgage insurance plans in Singapore which refund customers the total premiums they have paid at the end of the policy term if no claim is made. Both plans are underwritten by The Overseas Assurance Corporation Limited (OAC), a wholly-owned subsidiary of Great Eastern Holdings Limited and a member of the OCBC Group.

According to a survey conducted with 300 private property owners by OCBC Bank in 2011, 59% of them do not have protection plans. Many felt that the premiums paid for such plans are in most circumstances "wasted". This refund-of-premiums feature, addresses this concern. Many customers see the benefits of the Mortgage Protector Plus and Mortgage Protector Advantage – as a way to protect their families, and as a form of "forced" savings should there be no mishap.

As of September 2013, OCBC Bank has seen significant growth in the mortgage insurance business with Mortgage Protector Plus and Mortgage Protector Advantage driving it.

Key highlights:

• Increased by more than 60% - In the first 9 months of 2013, the mortgage insurance business saw an increase of more than 60% in new policies.
• More than 75% - New sign-ups for Mortgage Protector Plus and Mortgage Protector Advantage account for more than 75% of the growth in the mortgage insurance business.

Table A gives an illustration of the difference between a regular premium mortgage insurance plan that offers no refund and the Mortgage Protector Advantage plan.

Table A: Comparing Plans²

Mr Lim Wyson, Head of Global Wealth Management, OCBC Bank, said: "The response for these two plans, especially for the Mortgage Protector Advantage plan, has been great so far. Many of our customers told us that they would not have even considered buying mortgage insurance plans in the first place if there wasn’t the refund-of-premiums feature of the Mortgage Protector Plus and Mortgage Protector Advantage plans.

"I believe we’ve hit the nail on the head with this feature in getting more home owners to get insurance on their mortgage. It is important to protect our family from the burden of servicing big mortgage loans when the untoward happens.

Yet, we will not feel that our premiums paid are "wasted" if nothing happens – a pet peeve of many Singaporeans who do not buy protection plans. We are confident that overall demand for mortgage insurance will grow significantly with plans offering the refund-of-premiums feature driving it in future."

On his reasons behind buying a Mortgage Advantage Protector plan in October 2013, Mr Justine Tan, a 38-year old trader, said: "I initially questioned the purpose of a mortgage insurance plan as I did not think that anything bad could happen to my health. I thought it would be a waste of money should nothing happen."

"But I was quickly convinced that this was a good plan to buy especially after understanding how my family could be burdened with the loan should something unfortunate happen. While the annual premium may cost more than a regular plan’s, it’s still attractive to me since I will be able to get back the full amount that I’ve paid. I see it as a protection for my mortgage, with an eye on a form of forced savings for the future."

¹ This plan refers to Mortgage Protector, which is also underwritten by OAC.

² Assumptions: 40 years old, male, non-smoker, sum assured $1 million, 20-year policy term, 5% interest rate. Figures are rounded off to the nearest dollar.