What is happening in the Singaporean life insurance market?

Insurance boss also shared sector forecast

What is happening in the Singaporean life insurance market?

Life & Health

By Roxanne Libatique

The Life Insurance Association of Singapore (LIA Singapore) has disclosed its performance figures for the first quarter of 2024, revealing significant growth in the life insurance market.

From January to March 2024 (Q1 2024), the sector achieved S$1.37 billion in weighted new business premiums, a 32.2% increase from the same period in 2023.

The demand for single premium policies surged, with weighted premiums rising 46.4% to S$500.4 million. This uptick can be attributed to the improving economic conditions in Singapore, which also contributed to the strongest first-quarter performance since the pandemic began.

Continued increase in uptake of annual life insurance premium policies in Singapore

The sector also saw a 25.2% increase in annual premium policies, totalling S$866.5 million in weighted premiums, indicating a sustained emphasis on coverage and protection. Sales of non-participating products rose to 42% of the total during this quarter.

Financial advisory (FA) representatives played a key role, securing S$12.6 billion in total sum assured, accounting for 37.2% of the quarter’s sum. Tied representatives were also significant contributors, securing S$12.3 billion, which represented 36.3% of the total sum assured.

Overall, the life insurance industry registered a total of S$33.8 billion in sum assured for the quarter, marking an 11.9% increase year-over-year.

“The life insurance industry is starting the year positively by focusing and achieving progress in narrowing our nation’s protection gap as we grow the sector as a whole. While the concerns about the potential impact of the macro-economic environment remain pertinent, the industry continues to be agile to swiftly respond to consumer needs in Singapore. Our priority remains in helping the population meet their financial and protection needs,” said LIA Singapore president Dennis Tan.

IPS remain a critical component of health insurance

Coverage expansion was also evident in the integrated shield plans (IPs), with an additional 35,000 Singaporeans and permanent residents covered by the end of March 2024. This increase brings the total to approximately 2.94 million, or about 70% of Singapore’s residents, now covered under these plans which enhance the basic MediShield Life coverage.

New business premiums for individual health insurance in Q1 2024 rose to S$98.6 million, up by 5.3% from the previous year, with IPs and their riders comprising 82.9% of these premiums.

The sector is also facing the ongoing challenge of medical inflation, which necessitates a coordinated effort across the healthcare system to maintain sustainability. The life insurance industry is actively engaging with healthcare regulators and providers to enhance transparency and manage costs effectively.

Life insurance claim payouts in Singapore

In terms of claims, the industry paid out S$5.01 billion to policyholders and beneficiaries from January to March 2024, nearly doubling the payout from the same period last year, with a substantial portion attributable to the maturation of single premium policies.

Singapore life insurance forecast

Looking ahead, Tan remains cautiously optimistic about future growth, citing a recent Monetary Authority of Singapore survey forecasting a 3.4% growth in the finance and insurance sector.

“There are expectations of stronger growth in the overall finance and insurance sector, with median forecast of 3.4% in a recent survey by the Monetary Authority of Singapore (MAS), up from 2.5% in the December survey. As we pursue efforts to drive this growth, we remain cautiously optimistic and adaptable, noting also that the median forecast of headline inflation came in at 3.1%,” he said.

The release of the latest life insurance statistics follows the launch of an improved version of LIA Singapore’s protection gap calculator.

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