This article first appeared in The Edge Financial Daily on January 16, 2018

KUALA LUMPUR: CIMB Group Holdings Bhd is targeting to achieve annual premium of RM30 million this year from Sun Income Secure, its premium investment-linked insurance and savings plan.

“Sun Income Secure is another innovative solution that provides protection, investment and savings in one simple plan to help our customers achieve their dream retirement,” said CIMB consumer banking chief executive officer (CEO) Samir Gupta.

The product, offered in collaboration with CIMB’s bancassurance partner Sun Life Malaysia Assurance Bhd, was launched yesterday as the 13th product the two groups have jointly developed, and the first retirement scheme of its kind under the partnership. Customers will get to enjoy a guaranteed yearly income stream for up to 20 years. They will be able to decide on the yearly income they wish to receive from their predetermined retirement age, ranging from 50 to 65 years old. The minimum entry age is 30 years old.

Additionally, 50% of the guaranteed yearly income amount will be payable on an annual basis for the first three years, immediately following the life assurance’s predetermined retirement age.

Protection coverage is also offered in the form of a lump sum payment that will be made in the event of death or total and permanent disablement. Clients will also benefit from a potential investment return through investment in a series of professionally managed investment-linked funds.

Sun Life Malaysia CEO and president Raymond Lew is confident that the product will meet the needs of the targeted mass affluent market.

“There was a soft launch of the product [in the middle of last] year and during that test period, 700 people already signed up. We expect about 2,000 to 3,000 new clients a year with a minimum contribution of at least RM6,000,” Lew said at the launch event, adding that since the soft launch in July 2017, the product has recorded RM11 million in premium collection.

“As the Malaysian market becomes more affluent, there is a need to secure a good retirement life. As it is, even EPF (Employees’ Provident Fund) savings are not enough to fund retirement for the account holders. Such a solution may complement the objective of the account holders to broaden the reach of different asset classes, and help them achieve their retirement goals,” said Lew. Meanwhile, CIMB expects to launch three more insurance products in 2018, said Gary Yong, CIMB Bank’s head of wealth management.

“One will be related to cancer illness; one will be a takaful product. Another one will be micro-insurance, which involves small amounts, and this is particularly to help those who are not able to afford insurance in general,” Yong said on the sidelines of the launch yesterday, adding that during the five years of CIMB’s partnership with Sun Life Malaysia, the products produced have seen a 20% to 30% compound annual growth rate, which is expected to be maintained.