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Implications of Great Eastern's One Time Redemption Offer for Great Link Choice

Below is my analysis of the one time redemption offer made by Great Eastern to policy holders of GreatLink Choice:

1. Great Eastern will definitely be making a loss from it. Even if not all policy holders take up the one time redemption offer, Great Eastern still stands to lose a huge sum of money. This though is done to prevent any further damage to the company name that might arise should policy holders follow the way of those who were affected by the Lehman mini bonds. Should policy holders have the chance to complain to MAS, the investigations could land some agents into trouble and might also tarnish the name of Great Eastern.

2. Whether this is a good public relations (PR) move remains to be seen. It most probably will be as clients will feel that Great Eastern truly cares about the interests of its clients. On the whole, the public will view it as a good move made by an insurance company versus how the banks have treated their clients in the Lehman saga.

3. Agents affected by the commission clawback could be adversely affected as some would have to cough up $100,000 in commissions they have received in the past. On the other hand, it provides a good sales opportunity for other agents as clients who receive their capital back might be looking for other policies to invest in.
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