Insurers, especially those with traditional business models, will need to rethink and sharpen strategies, and reposition for the future, according to Mr Chua Kim Leng, Assistant Managing Director, Banking and Insurance, MAS, at Life Insurance Association Singapore’s (LIA) 14th annual luncheon last month.
He said that PwC’s Annual Global CEO Survey indicated that insurance is set to become one of the most disrupted business sectors, with CEOs expressing concerns over shifts in consumer spending and behaviour, as well as threats from new entrants and regulations. The 2016 EY Asia Pacific Insurance Outlook highlighted similar trends, namely, rising consumer demand for digital products and services, increasing competition and more complex regulations. These trends apply too to the Singapore market.
“In responding to these challenges, I would like to encourage insurers to focus on three key areas: 1) strengthening governance and risk culture; 2) adopting a consumer-centric approach; and 3) embracing technology and innovation,” said Mr Chua.
LIA’s three efforts for 2016
At LIA’s Annual General Meeting before the luncheon, Dr Khoo Kah Siang and Mr Ken Ng were elected as President and Deputy President, respectively, extending their tenure for the third consecutive year. Mr Philip Seah was also elected as Deputy President, taking on his new role with immediate effect.
In 2016, the association will be focussing the industry’s efforts on three key areas:
1) Boosting the quality of life in Singapore through managing rising healthcare costs more effectively, keeping healthcare insurance affordable for all, and introducing the Standard Integrated Shield Plan (Standard IP) targeted at coverage for public hospital Class B1 beds;
2) Introducing initiatives to increase transparency on complex products including the enhancement of the Benefit Illustrations (BI) for par products for consumers’ ease of understanding; and
3) Contributing to the nation’s progress by providing stable, long-term capital support, employment and skills-upgrading amidst a slowing global economy.
In 2015, Singapore life insurance industry’s weighted new business premiums grew 8% y-o-y to almost S$3 billion (US$2.17 billion). It registered a 14% increase in overall sum assured for new business, which amounted to S$101.2 billion, as well as a 28% increase in claims payout for death, critical illnesses or disability claims, as compared to 2014.