Total gross premiums in Singapore’s general insurance industry grew by a modest 2.6% to reach S$3.6 billion (US$2.6 billion) in 2015, outperforming the 1.1% growth registered in 2014.
Total underwriting profit however, slid by 17% y-o-y to S$325 million. This was attributed to the general slowdown in the economy, external headwinds and increased competition from existing and new players, which contributed to declining margins, said the General Insurance Association of Singapore (GIA).
At a press briefing, GIA President A K Cher noted that despite the turbulence caused by the economic and trade slowdown, external headwinds and stiffer competition, the sector has still managed to “achieve a commendable performance” and has continued to “build up our resilience and strengthen our risk management framework to help members and industry players weather difficulties in the larger economy”.
Motor remains biggest class followed by Health
Motor insurance continued to dominate the market with approximately 32% share although gross premiums fell 4% y-o-y to S$1.1 billion; stiffer competition among insurers was a prevailing factor during the year, resulting in a decline in the average motor premium.
For the first time, health insurance overtook fire as the second largest class of business with a 12% share of GWP. The health segment registered a 14% y-o-y increase in premiums to S$435.3 million. Fire insurance grew 9% from 2014 to deliver S$396.6 million in premiums.
Personal Accident and Work Injury Compensation rose 4.5% and 3.2% y-o-y to S$345.4 million and S$383.5 million respectively. Meanwhile, marine cargo decreased 2.7% in 2015 to S$202.1 million, taking a hit from the slowing world trade and weaker domestic and regional growth; the hull segment posted an 11% rise in premiums last year to reach S$432.1 million.
On its outlook for the year, the association said it expects challenges to persist, given the uncertainty and volatility in the domestic, regional and international economies. While the challenges may prolong, the market is still expected to “deliver on modest growth”.
GIA added that in particular, Personal Accident and Health business is likely to grow moderately due to consumers’ growing awareness in coping with rising medical costs and a significant increase in overseas travel fuelled by cheap budget airfares. Motor, on the other hand, is “likely to continue falling due to intense competition for profitable business among current insurers and new entrants”.