Saturday, April 05, 2014

A dysfunctional society

Read this article:

There are insufficient policemen in Singapore, relative to the expanded population. The police are not even acting against physical assault. What is happening in Singapore?

Let me give you the answer. We have too many people working as property agents, insurance agents and remisiers, not adding much value to the economy but to sell questionable financial products and overpriced properties.

If people can earn more in these occupations, few will want to be policemen. Our education system and salary structure encourage this trend.

Singapore has become dysfunctional. This is caused by the poor leadership of the Government over the past two decades.

Friday, April 04, 2014

Business simulation game

Try the business simulation game

Tip on how to submit your plan. Look at the Products tab and see the premium and commission charged by the top player. Look at the forecast for next year and adjust your premium and commission based on it. Do this for four products. Wait for the year to close. You will find that you are near the top for the players. 

Practice a few times, and you will get the right pricing strategy.

Maintaining our defensive capability with less burden on male citizens

Here is a new approach towards maintaining the defense capability of Singapore by requiring male citizens to serve full time national service for 12 months and to be in active reserves for 5 years only. 

The capability can be maintained by using the savings in the training cost to recruit an additional 20,000 professional soldiers and still have sufficient reservists to be operationally ready and to be called up in times of need.

Managing the risk of internet banking transfers

Many people do not know the difference between what is big and what is small, what is important and what is not important.

They apply the same approach to all these issues. Someone said that the approach should not be "one size fit all". 

Many people do not know the difference between what is big and what is small, what is important and what is not important.

They apply the same approach to all these issues. Someone said that the approach should not be "one size fit all". 

When it comes to internet banking transfers, there is an excessive fear of hackers coming into our bank account. Banks introduced excessive layers of security to counter the risk of hacking.

It is serious, but not so serious, if a hacker is able to access my account and see the balance. Many employees of the bank have access to my balance anyway, as they need this access to provide customer service.

When the bank sends the monthly bank statement to me, the post man can also take away my statement and view it. We face this risk all the time, but accept it as it cannot be eradicated.

The real risk is when the hacker makes a fraudulent transfer from my account. This is where a higher layer of verification is required.

This is not the only risk faced by the customer. A bigger risk is in making a mistake by entering the wrong account code or amount, which s much higher than a hacker making a fraudulent transfer.

If a mistake or fraudulent transfer is made for a small amount, it is not that serious. We stand the risk of cash being taken from our wallet by a thief or pickpocket or losing the notes carelessly anyway. 
There is no need for a bank to make internet banking transfer so cumbersome, especially for small amounts. The practical approach is to allow the customer to set a tolerance limit and requires a higher level of security for transfers beyond that limit.
There is the risk that the data could be changed by the hacker who taps into the connection between the customer and the bank. Who would want to spend so much time and transfer to commit a crime for a small amount? The risk of being caught is higher for a cyber thief than for a real thief anyway.

If the amount is large, the bank can send the transfer for re-confirmation by the payer who can do it with a 2FA token. This should be more than adequate. It is possible to imagine how a hacker or criminal would circumvent it, but who would want to spend so much time to spend so much time to hack into one account for a small amount of transfer?

Tan Kin Lian

Tuesday, April 01, 2014

Leadership change

Fitz Gerald asked.
Who in the opposition party is capable of leading Singapore if oppositions were to win in ge 2016? There are some people who aren't confident in the oppositions because they have never experienced being in power and governing this country.

We have seen several countries and state changed their governments and they seem to handle the problems well. Examples are Lim Guan Siong of Penang and Joko Widodo of Jakarta. 

We need people who have leadership skills and are still humble. They know how to approach the real experts who can give the right answers.

Sunday, March 30, 2014

Develop a competitive edge in underwriting

The success of an insurance company in a competitive market depends, to a large extent, on its underwriting expertise. It needs capable underwriters who are able to assess the risk and to charge a premium rate that is competitive and sufficient to cover its claims, expenses and make a profit.

Most insurance companies depend on underwriters who build up their knowledge and expertise over many years. Unfortunately, there is no guarantee that the good underwriters will stay with the insurance company. they are likely to be attracted to work for a competitor who offers a higher salary or better prospects.

An insurance company can build a sustainable competitive edge by supplementing the personal knowledge of its underwriters by a detailed insight of its actual claim experience in the market that it operates.  

The detailed insight can be developed through these three steps:

1) Use of the actuarial software to analyze the claim experience, with special algorithm to allocate the actual results to the various variables used for rating

2) Consultancy on preparing the data on exposures and claims, analyzing the data using the actuarial technique, interpreting and explaining the results, and helping management to decide on the use of the results in the underwriting and pricing process.

3) Training its internal staff to carry out the above processes on their own as a regular exercise.
The underwriting expertise, which combines the years of experience of the underwriting staff and backed by the use of your properly analyzed claim statistics, can contribute to a profitable outcome in a challenging and competitive market. 

More details can be obtained from

Build a long lasting career

I want to share some tips on how to build a long lasting career. This is for young people who are graduating and starting on their first job. 

1. Choose a job that fits your skill set. You are embarking on a career for the long run. By using your skills, you will be able to perform the job better than other people. Your chance of succeeding is better. 

2. Choose a job that few people wants. It could be a small company or one that has more challenging working conditions. Your employer will need you more than you need the job. You have fewer competitors.

3. Don't worry about the things that you do not know, or that are "messy". It takes time to learn, and the skills will last you for a long term. Most skill sets require a long time to learn anyway.

4. Stick to the same line. Do not jump from one job to another. By staying in the same line, you will be a "master of the trade".

5. Your reward will come, but it takes time. Be patient. If you are really good, the opportunity will come to you soon. But, if you are "rubbish", this will tell quite soon. Many people do not learn the real skills, and they do not succeed because they are "rubbish".

I hope that these tips are useful to you. Most people are impatient and want to earn good income early. They do not build the skills sets that will last them a long time.

Practice the skill of running a business

Do you know how to fix the right price and marketing for your product, in a competitive market, to earn a good profit? This game teaches you the technique. You can practice and develop the skill. 
You can try the game free at
Read the user guide for some tips.
Or, register to attend this workshop:

A sales job can be high value

We need sales people who can advise customers on the right products to suit their requirements. It can be on clothes, food, counter drugs, books, whatever. 

This knowledge comes from the job and is acquired when one works in the same line over the years. They do not ćome from a university degree. 

Most people do not think long of working in the same line. They only take a sales job as a temporary measure, waiting for the next short term opportunity. They don't pay interest to learn the skills and knowledgrpe needed for their jobs. 

This leads to lower standards, inefficiency and high cost. It is wasteful. The blind pursuit of a university degree, that cannot be put to good use, is really wasteful, as it took away the opportunity for many people to develop the skills that are more appropriate for their future.

Challenge of reducing rentals

A key strategy to reduce the cost of living and cost of doing business is to reduce rental. 

The government is the largest owner of land in Singapore. They face a dilemma in reducing rental as it reduces their revenue from rentals that they collect and also from the sale of land. If they reduce the price of land, they will suffer a drop of revenue. If they continue the current high property prices, it will bring a heavy burden to the economy and to the strain on the people.

Even if the government decides to reduce property prices, they can only control the prices of property that they own. They cannot control the prices of private properties and the rentals. The private owners will have to decide on their own.

If property prices fall due to government action, it will eventually bring down the prices in the private sector and will give financial stress to the banking system that provided the loan to the private developers. It will also harm the economy.

There is no clear solution to this conundrum. Japan suffered for two decades. America is also suffering the effect of the bursting of the bubble. China and Singapore will have to follow.

The solution to this challenge will need people with courage and vision. I don't think we have these people in Singapore. So, we will have to follow the fate of Japan.

Abolish GST to reduce the cost of living

The government collects $10 billion in GST each year and has a surplus of $30 billion in the budget, according to IMF accounting conventions.

They can remove the GST totally and still have a fairly healthy budget surplus of $20 billion.

Removal of GST totally will reduce the cost of living by at least 7% and could be more, if the saving in accounting and administration for GST and GST vouchers is considered. This will bring immediate relief to an economy that is heavily strained with high business cost, and a people that is suffering from high cost of living.

If public expenditure increases in the future, income tax can be increased. The current collection from income tax is $20 billion. If the full $10 billion has to be increased, the income tax will increased from the current level by 50%.

Most working people pays an income tax of less than 10% on their marginal income, so the increase could be 5% (on the marginal income) and it is still lower than the saving of 7% on GST (on the total income).

The high income earners, and the million dollar ministers may suffer a hit, but their top rate of tax is 20%, so their max increase is only 10%. What is wrong with paying 30% tax when they earn $1 million or more?

Let me give this call to the hard working and hard pressed citizens of Singapore. Do not believe the rubbish that GST is good for the people. It is only good for the million dollar earners.

Tan Kin Lian

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