BONUS DECLARATION FY2020

Bonus Announcement for Participating Funds

 NOTE • During the presentation, please feel
free to send in your questions to the
panel with the Q&A function

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 • This presentation is prepared by Prudential
Assurance Company Singapore (Pte) Limited.

DISCLAIMER • The information presented is strictly

confidential and for internal use only and
This is not a sales cannot be reproduced, amended or
presentation and it should circulated in whole or in part to any other
not be used in one person without our prior written consent.
• The information is correct as at 1 April 2021
unless otherwise stated.

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or circulated in whole or in part to any other person without our prior written consent.
 Par Fund 101

Report Card FY2020

AGENDA Market Outlook

Bonus Declaration FY2020

Communication Plan

Summary

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or circulated in whole or in part to any other person without our prior written consent.
 PAR FUND 101
Basic Concepts about Participating Fund

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or circulated in whole or in part to any other person without our prior written consent.
 Insurance Funds in PACS

Non-Participating Investment-Linked
Participating Fund
Fund Fund
PruActive Term PruActive Saver
PruActive LinkGuard

PruShield PruActive Life

PruSelect Vantage
PruUniversal Vantage PruActive Retirement …
… …

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or circulated in whole or in part to any other person without our prior written consent.
 PACS Regular Premium
Life Fund
Participating
Sub-Funds PACS PruInvestor PACS Short Term
PACS PruAsset
Fund Single Premium
Builder Fund
Endowment Fund

There are 9 sub-funds in

Prudential Singapore PACS SP Long PACS SP Long
PACS Par
Retirement SGD
Term SGD Fund Term USD Fund
Fund

7 sub-funds for PACS products

2 sub-funds for PLA* products
PLA Regular Premium Fund
PLA refers to ex-UOB Life, otherwise known as
PruLife PLA Maxi Annuity Fund
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or circulated in whole or in part to any other person without our prior written consent.
 Simplifying Par Fund Bonuses

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or circulated in whole or in part to any other person without our prior written consent.
 Effective Date
for Bonus Declaration FY2020
Revised bonus rates will be effective from 1st April 2021

Reversionary Bonus is added as Interim Bonus:

• On 31st December for PACS products
• On policy anniversaries for PLA products
and subsequently becomes guaranteed on 1st April in the following year
Terminal Bonus becomes guaranteed when they are paid upon exit

All bonuses are non-guaranteed until declared

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or circulated in whole or in part to any other person without our prior written consent.
 Assuming all bonus rates are maintained for FY2020

Declaration of

Total Projected Policy Value*

Reversionary Projected Projected
Projected
Bonuses Non-
Non-
Guaranteed
Non-
Guaranteed
Guaranteed Benefits Benefits
When RB is declared Benefits
annually, part of the
previously projected non-
RB Added
guaranteed benefits Guaranteed
becomes guaranteed. Guaranteed Guaranteed Amount
Amount Amount

1st April 2020 FY2020 Bonus 1st April 2021

Declaration
* Total Projected Policy Value can come in the form of Projected Maturity Value, Projected Surrender Value, etc.
Diagrams are not drawn to scale, for illustration purpose only.
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or circulated in whole or in part to any other person without our prior written consent.
 Declaration of Terminal Bonuses
Terminal bonuses turn guaranteed only when it is paid upon exit of the policy
An exit could be Surrender, Maturity or Claims (Scenario examples below).
They are subject to change up until then. Applicable TB rates depends on the date of exit

Assuming Policy A Assuming Policy B Assuming Policy C

Surrenders on Matures on Makes a Claim on
1st March 2021 9th August 2021 14th February 2022
Applicable TB becomes Applicable TB becomes Applicable TB becomes
gtd when it’s paid on gtd when it’s paid on gtd when it’s paid on
1st March 2021 9th August 2021 14th February 2022

Applicable TB Rate from Applicable TB Rate from Applicable TB Rate from

1st April 2020 1st April 2021 1st April 2021

1st April 2021 31st December 2021

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or circulated in whole or in part to any other person without our prior written consent.
 REPORT CARD FY2020
Market Performance over FY2020

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or circulated in whole or in part to any other person without our prior written consent.
 Report Card FY2020
Despite poor initial market performance due to COVID19 outbreak, we maintained our disciplined
investment approach and recovered in 2H to post positive returns for FY2020.
20.0% Note that past performance is not necessarily indicative of future performance
2018 2019 2020

15.0%

9.36%
10.0% 7.91%
6.42% 5.78%
5.65% 5.22%
4.84% 4.24%
5.0% 3.89%

0.0%

-5.0% PACS Regular PACS PruAsset PACS PACS Par Short PACS Par Long PACS Par Long PACS Par PLA Maxi PLA Regular
Premium Life Builder Fund PruInvestor Fund Term SP Term SP (SGD) Term SP (USD) Retirement SGD Annuity Fund Premium Fund
Fund # Endowment Fund # Fund # Fund #
#Open to NB Fund #

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or circulated in whole or in part to any other person without our prior written consent.
 Stable Mid to Long-Term Performance
Historical Investment Return for PACS Regular Premium Life Fund
Note that past performance is not necessarily indicative of future performance
15.0%
Interest Rate (%)

Annual Returns Moving 10-Y Average Returns (p.a.)

12.26%
11.00% 10.63%
10.0%
8.30%
Latest
5.90% 10-year
5.20% 5.65% average
5.0% 5.61%
p.a.

0.20% 0.20%
0.0%

-2.12%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
-5.0%
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or circulated in whole or in part to any other person without our prior written consent.
 Era of Low Interest Rates
Both SGD and USD interest rates fell to historically low levels - below 1% p.a. for most of
2020. Long term yields have since risen but remain low.
8.0%
Risk-free Rates %

SGD 10-Yr
7.0%
USD 10-Yr
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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or circulated in whole or in part to any other person without our prior written consent.
 Financial Markets Returns (2017 – 2020)
2020 saw performance divergence across asset classes, region/countries and sectors

Data as at 10 Mar 2021.

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or circulated in whole or in part to any other person without our prior written consent.
 2020 Performance Attribution
Manager selection was negative as Value and Low Volatility strategies
underperformed
• A bounce in value performance towards the end of 2020 helped but was insufficient
to claw back underperformance

Tactical asset allocation was negative as portfolio was overweight equities

going into 2020
• 2020 portfolio positioning started with equity overweight
• Equity overweight was greatly reduced until portfolio manager added on more risk in
2H

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circulated in whole or in part to any other person without our prior written consent. 17
 Portfolio Actions Taken Since

Reduction in allocation to underperforming active equity strategies

Further transition into passive and new active strategies for better risk
management and portfolio resilience

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circulated in whole or in part to any other person without our prior written consent. 18
 MARKET OUTLOOK
Looking Ahead into 2021

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or circulated in whole or in part to any other person without our prior written consent.
 Market Outlook 2021
Asset Performance FY 2020 YTD Feb 21
Equities (in Local Currency)
1. Recovery and reflation remain as central MSCI World 14.1% 1.4%
(consensus) outlook S&P 500 Index
MSCI Europe
16.3%
5.4%
1.5%
1.0%

2. Lots of optimism rests on supportive policies. As

MSCI AC Asia Pac ex Japan 19.8% 4.7%
MSCI Emerging Market 15.8% 3.7%
economies reopen, long-dated rates should drift TOPIX
Hang Seng Index
4.8%
-3.4%
3.3%
6.4%
higher and fuel risk-on momentum Straits Times Index -11.8% 3.7%

3. How much of fundamental improvement has Bonds (in Local Currency)

been baked into market prices? UST 10 YR (Yield) 0.9% 1.4%

SGS 10 YR (Yield) 0.8% 1.3%
US Agg 7.5% -2.2%
EM Agg 5.9% -3.7%
Asia Agg 6.3% -0.8%

Source: Thomson Reuters Datastream, Bloomberg Finance L.P., Prudential Investment Strategy.
Updated as of 28 February 2021- Past performance is not indicative of future performance.
The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 BONUS DECLARATION FY2020
Effective from 1st April 2021

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or circulated in whole or in part to any other person without our prior written consent.
 Bonus Declaration FY2020

Maintain
Reversionary
Bonus for all
Maintain
eligible
Interest
Expectation
Lower Future Terminal
of Rates to policies
Rates at Expected Bonus for
Stay Low for
Historical
Longer
Investment most eligible
Low Returns policies
Periods Reduce
TB for
selected
Whole
Life plans

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or circulated in whole or in part to any other person without our prior written consent.
 Bonus Declaration for PACS Products
• MAINTAIN RB for all eligible PACS policies
• MAINTAIN TB for all PACS policies, except
• REDUCE TB for
• 2nd Series Whole Life
• 3rd Series PruLife
• 4th Series PruLife
• 5th Series PruLife Limited
Details can be found in the appendix

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or circulated in whole or in part to any other person without our prior written consent.
 Bonus Declaration for PLA Products

• MAINTAIN all bonus rates for all eligible PLA policies

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 I Have a Question…
What does the reduction mean to the customers
in terms of their yield from their Whole Life plans?

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or circulated in whole or in part to any other person without our prior written consent.
 Current Bonus Level

Average Yield-to-Surrender** Current

Expected
= 3.8%p.a. Level of
Surrender
Value at
illustrated
age*
inception

…
Premium

…
Premium

Premium

Premium

Premium

Premium

Premium

Premium
*Illustrated age is the minimum of 65 or age at next anniversary.
**Actual impact depends on product and policy profile. Policyholder should refer to Bonus Notice for actual impact.
The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 Revised Bonus Level
Reduction

Average Yield-to-Surrender** Revised

= 3.7%p.a. (-0.1%) Expected
Level of
Surrender
Value at
illustrated
inception

age*
…
Premium

…
Premium

Premium

Premium

Premium

Premium

Premium

Premium
*Illustrated age is the minimum of 65 or age at next anniversary.
**Actual impact depends on product and policy profile. Policyholder should refer to Bonus Notice for actual impact.
The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 I Have a Question…
Terminal bonuses are reduced for selected Whole Life policies,
so how many are actually affected? Are the maturities affected?

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or circulated in whole or in part to any other person without our prior written consent.
 81,429 policies will see a drop in
surrender value
> 90% of PACS policies
9% will still have the same
projected values as
previous year

Projected maturity
values for all policies
Overall impact maturing between 1st
Apr 21 to 31st Mar 22 will
remain the same as
previous year
91%
(> 846k policies)

Projected values will

Total PACS Par Policies remain the same for all
current selling products

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 I Have a Question…
If my customer is one of the affected 81k policies,
how much of their projected values will be reduced?

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or circulated in whole or in part to any other person without our prior written consent.
 FY2019 TB Rates FY2020 TB Rates
Impact

What does it Cash value of Cash value of

Terminal Bonus Terminal Bonus
mean to your

Average SV = $53,178*

Average SV = $51,742*
customers?
Average reduction of
Cash value of Cash value of
$1,436 in Surrender Value* accumulated RB accumulated RB
per policy for the affected
Whole Life plans
Cash value of SA Cash value of SA
*Impact quantified based on Dec20 position.
Actual impact differs based on individual policy,
customers can refer to their Bonus Notice for the Illustration of Surrender Value for Affected Whole Life plans
impact to projected values Diagrams are not drawn to scale, for illustration purpose only.

Not a realized reduction until a payout is made

– i.e. revised Terminal Bonus remains non-guaranteed until declared
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or circulated in whole or in part to any other person without our prior written consent.
 COMMUNICATION PLAN
How are Policyholders Informed?

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or circulated in whole or in part to any other person without our prior written consent.
 Communication Timeline
Sales Force

1 April 2021 Now 1st April 2021 Late April 2021

Communication to Par Fund Update on Annual Bonus Update
Bonus Effective Date
Distributions Corporate Website (Bonus Notices uploaded to iDoc)

Policyholders

Late April 2021

1 April 2021
Annual Bonus Update
Bonus Effective Date
(e-Communications or Snail Mail)

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or circulated in whole or in part to any other person without our prior written consent.
 Changes in Communication Plan
All Eligible
SMS will be sent to
Participating Policyholders Customers are notified
through SMS in March that
customers informing them
that Bonus Notice is
digital communication will
available for viewing from
be the default
late April
e-Communications
From 2021 onwards, bonus communications
can be sent digitally as default mode as Communication Process
part of regulatory change for e-Communications

Customers are given 30

Snail mail days to request for a
printout of the latest BN Customers can login to
PRUaccess for viewing
Customers who are not eligible for e-Comms They can also update their
will continue to receive hardcopies address during the request

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 Communication Material & Resources

Sales Force Policyholders

• Sample pack of ABU (with FAQ) • Par Fund Update
(can be found on Corporate Website)
• Clients’ Bonus Notices through iDoc • Bonus Notice
Collectively known as
• Bonus Register
Annual Bonus Update
• iQuotation via PruRAISe “ABU”

• Information about Par fund in Par Fund • iQuotation via PRUaccess

Placemat & Par Fund Navigator
Note: iQuotation is a self-help tool to generate revised policy illustration the prevailing bonus rates

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 SUMMARY
All in a Nutshell

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or circulated in whole or in part to any other person without our prior written consent.
 Prudent Reflection of Future Expectation

• Maintain Terminal Bonus for >90% of the policies

• Maintain Reversionary Bonus for all eligible policies
• Declaring $319m in guaranteed bonuses for FY2020
FY2020 • Reduce Terminal Bonus for selected policies
at a Glance
Financial Stability

• Customers enjoy stable returns over the past 10 years

and our funds have a good track record over the
middle to long term

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or circulated in whole or in part to any other person without our prior written consent.
 Resource Centre

Par Fund Placemat FC Pack Par Fund Navigator

(consists of sample BN,
PFUs and FAQ)

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 Thank You for Your Attention

Continue to Stay Safe

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or circulated in whole or in part to any other person without our prior written consent.
 Appendix

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 PACS Regular •PruActive Saver
Premium Life •PruActive Life
Fund •PruGolden Retirement Rewards, etc

PACS Participating PACS Single •PruLife Vantage Achiever SGD

•PruLife Vantage Premier SGD
Premium Long
Sub-Funds I Term SGD Fund
•PruLife Vantage Achiever Prime SP
SGD, etc

•PruLife Vantage Achiever USD

PACS Single
Theses PACS funds are still •PruLife Vantage Premier USD
Premium Long
open to NB Term USD Fund
•PruLife Vantage Achiever Prime SP
USD, etc

PACS Par
•PruActive Retirement SP
Retirement SGD •PruActive Retirement RP
Fund

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or circulated in whole or in part to any other person without our prior written consent.
 PACS Short Term
Single Premium •PruAssure Rewards (Tranche Product)
Endowment Fund

PACS Participating
Sub-Funds II
PACS PruAsset
Builder Fund •PruAsset Builder (CPFIS eligible)
(Closed to NB in 2001)
Theses PACS funds have
been closed to NB

PACS PruInvestor •PruInvestor I (CPFIS eligible)

Fund •PruInvestor II (CPFIS eligible)
(Closed to NB in 2003) •PruInvestor Bond (CPFIS eligible)

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
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or circulated in whole or in part to any other person without our prior written consent.
 •Maxi Savings
PLA Regular •Maxi Life
Premium Fund •Maxi Rewards
PLA Participating •Maxi Dollars, etc

Sub-Funds

Theses PLA funds have

been closed to NB
PLA refers to ex-UOB Life, otherwise known as PLA Maxi •Maxi Annuity
PruLife Annuity Fund

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
43
or circulated in whole or in part to any other person without our prior written consent.
PACS Products with
TB changes • 2nd Series Whole Life : -8%
• 3rd Series PruLife : -7%
• 4th Series PruLife : -12%
TB reduction ranges from • 5th Series PruLife Limited : -15%
7% to 15%

The information presented is strictly confidential and for internal use only and cannot be reproduced, amended
44
or circulated in whole or in part to any other person without our prior written consent.