Singapore's life insurance industry started the year strongly with a total of S$811 million (US$578 million) in weighted new business premiums for the period January to March (1Q2017), a 19% increase compared to 1Q2016, reveals the Life Insurance Association Singapore (LIA Singapore).
The first quarter's growth rate for weighted new business premiums was a significant improvement over 1Q2016's 5% increase and 1Q2015's 1% decrease. It was the fastest increase since 1Q2014's 24% growth rate.
In a statement yesterday, LIA Singapore said that the continued healthy growth can be attributed to the industry’s agility in responding to consumers’ fast-changing needs. Life insurers are providing consumers more options in the form of new products and multiple channels to buy insurance policies from. This is also reflected in increased engagement through activities across the different distribution channels, including tied agents, banks and financial advisers.
There was an increase in uptake across both single and annual premiums. Compared to same period in 2016, the industry recorded:
a) a 30% increase to S$281.3 million in weighted single premiums:
-Single premium par and non-par products comprised 78%, the balance 22% were single premium linked product
-CPFIS-included products comprised 13%; cash-funded products took the remaining 87%;
b) a 14% increase to S$529.7 million in weighted annual premiums.
Mr Patrick Teow, President of LIA Singapore, said: “The encouraging results in the first quarter point to our core focus of bridging Singapore’s protection gap. Work is underway on a fresh Protection Gap Study this year. Ensuring adequate protection is especially critical at a time of economic uncertainty and rapid demographic shifts in Singapore. Life insurers are increasingly leveraging digitalisation to innovate and respond to these fundamental changes.”
Accordingly, the industry recorded sum assured for new business totalling S$24.3 billion. This was a significant 10% increase compared to the corresponding period in 2016 as the industry continues to better meet the protection needs of society.
On top of this, approximately 20,000 Singapore residents bought additional health insurance coverage to complement the government-run scheme, MediShield Life, in the first quarter of the year. In all, new health insurance premiums totalled S$66 million for 1Q2017.
As at 31 March 2017, 2.91 million lives (approximately one in two individuals in Singapore) are insured.
As at 31 March 2017, the life insurance industry had paid out S$1.39 billion to policyholders and beneficiaries. Of this amount, S$1.18 billion was for policies that matured. The remaining S$212 million was for death, critical illness or disability claims.
There was an uptake of 5,092 policies designed to provide regular payout to policyholders during retirement years, with approximately S$40 million of weighted new premiums recorded over the quarter. Such plans accounted for approximately 5% of the total weighted premiums for 1Q2017.
Contributing to Singapore as a leading insurance hub in Asia, the life insurance industry manages assets of approximately S$173.0 billion, up by 8% compared with a year ago. Assets of non-investment linked business accounted for S$143.5 billion, while the remaining S$29.5 billion were assets held for investment-linked business.
“Moving ahead, the industry is re-defining ‘protection’ with people-centric initiatives that include championing preventive healthcare for a healthier population because prevention is better and cheaper than cure. In this, Singapore's life insurance industry aspires to be the catalyst for change within our nation’s healthcare eco-system,” added Mr Teow.