The general insurance market of Singapore is expected to grow from SG$4.4 billion in 2020 to SG$5.6 billion in 2025, in terms of gross written premium (GWP).
This represents a compound annual growth rate of 5%, according to a study by data and analytics firm GlobalData.
The resumption of economic activities, success of COVID-19 vaccination programs, and relaxation on travel restrictions are among the factors that will drive the growth of the general insurance sector in Singapore, the study said.
“The Singaporean economy is expected to pose a strong recovery in 2021 and grow by 7% following 5.4% decline in 2020,” said Manogna Vangari, insurance analyst at GlobalData. “The general insurance industry is also expected to return to stable growth in 2021, after a flat growth of 0.2% in 2020, in line with the economic recovery.”
Motor insurance is the largest general insurance line in Singapore with a GWP share of 25.8% in 2020. Growth is expected to accelerate to 1.2% in 2021 after stagnating at 0.9% in 2020 due to the pandemic’s effects, such as restricted travel and lower vehicle sales. Electric vehicle sales grew by over 80% during the 12 months prior to September, which will contribute to higher demand for motor insurance.
Personal accident and health (PA&H) was the second largest line with a GWP share of 19%, followed by property insurance at 18.4%.
PA&H insurance provided by general insurers is expected to grow by 3.4% in 2021, and 3.8% in 2022. Meanwhile, property insurance is expected to grow by 7% in 2021, driven by recovery in construction output, which is expected to reach SG$28 billion in 2021.
“Economic recovery and gradual opening of international travel are expected to revive the demand for general insurance in 2021,” Vangari said. “The industry’s growth momentum will consistently pick up over the next five years aided by product innovation, digitalization, and infrastructure development projects.”