OCBC's mortgage insurance arm sees surge in business

OCBC's mortgage insurance business has recorded a more than 60 per cent increase in the number of new policies issued in the first nine months of the year.

The bank's newer plans - Mortgage Protector Plus plan launched in 2010 and the Mortgage Protector Advantage plan introduced last year - are driving the surge in business.

Those policies refund customers all the premiums they have paid at the end of the policy term if no claim is made by the end of the policy term.

OCBC said in a statement that both products are the only mortgage insurance plans here to do so.

New sign-ups for the two products accounted for more than 75 per cent of the growth in the mortgage insurance business.

OCBC said increasing numbers of customers want to hedge the risk of leaving behind unpaid mortgages without losing all the premiums they would have paid by the time the policy expires.

Typically, buyers of mortgage insurance plans do not get to take back any of the premiums paid.

A survey of 300 private property owners conducted in 2011 by OCBC found that 59 per cent do not have protection plans.

Many respondents felt that the premiums are more often "wasted".

Mr Lim Wyson, head of global wealth management at OCBC, said the refund-of-premiums feature addresses such concerns.

"We are confident that overall demand for mortgage insurance will grow significantly with plans offering the refund-of-premiums feature driving it in future," he added.

Get a copy of The Straits Times or go to straitstimes.com for more stories.