Surviving in a Globalised and

Competitive World: Co-operative

Experience

Tan Kin LianCEO, NTUC Income

ENVIRONMENT TODAY

• Globalised economy

• Competition has intensified

• Private sector can reach out to our traditional markets.

DRIVE FOR PROFITS

• Private sector aims to maximise profits

• Accept low margin to drive cooperatives out of business

• Increase profit margin later

MULTI-NATIONAL COMPANIES

• Start business to take advantage of the low labour cost

• Re-locate their operation to search for bigger profit.

• Create unemployment and disruption

ROLE OF COOPERATIVES

• Create employment in the local economy

• Enhance the welfare of their members

• Reduce the dependence on multi-national companies

ROOTED IN THE LOCAL COMMUNITY

• Deeper knowledge of its needs

• Better management their risk.

• Build social cohesion through democratic structure

• Excellent distribution channel

COOPERATIVE LINKAGE

• Networked through secondary and national organizations

• Relationships with other co-operatives across the country and abroad

CREATE LOCAL EMPLOYMENT

• Co-operatives invest in local communities.

• Create local employment

• Serve the needs of their members in the community

CHALLENGES OF SURVIVAL

• business efficiency

• customer service

• use of technology

• earn the loyalty of customers

CASE STUDY - NTUC Income

• Provide insurance to its members in Singapore

• Started in 1970 with a share capital of only S$1 million.

• Grown rapidly over 33 years

STANDING AT END 2002

• 15% share of the Singapore market

• Top ranking in general and health insurance

• Over 1 million customers

• Annual premium income of S$1,500 million

• Total assets of S$11,000 million.

BUSINESS PRINCIPLES

• improve business efficiency• reduce our operating costs• offer lower premiums• provide quality service• make efficient use of technology• distribute most of our profits to our

customers• communicate actively on cooperative

principles

IMPACT ON THE ECONOMY

• force the other insurance companies to provide better terms to their customers, to remain competitive

• contribute 1% of our annual surplus to the community

• set a high standard of customer service

IMPACT ON THE ECONOMY

• active in providing "more than insurance" services to improve the welfare of our customers

• offer loans at lower interest rates to help our customers to tide over a difficult period

• help to create employment

SHARE OUR EXPERIENCE IN SINGAPORE

• use of technology and the internet

• customer service and relationship management

• human resource development

• educating members on cooperative principles.

SHARE OUR EXPERIENCE OVERSEAS

• Know-how and experiences

• To cooperatives in other countries in the Asia Pacific region.

A FAVOURABLE ENVIRONMENT

• recognition of the useful role of cooperatives

• tax exemption given to all cooperatives

• use of the salary deduction system

• access to the armed forces market

STRONG COOPERATIVE MOVEMENT IN ASIA

PACIFIC • recognise the important role of cooperatives

• create a favorable environment for development of cooperatives

• offer tax preferences to cooperatives which work for the betterment of the community

• develop an information technology infrastructure to support cooperatives

STRONG COOPERATIVE MOVEMENT IN ASIA

PACIFIC

• allow the cooperatives to be managed independently, in the interest of their members

• allow some government services to be provided by the cooperatives

CONCLUSION

• A strong cooperative will benefit the people in the country and give them a better life.