Strong growth for life industry

09 May 2017

Singapore's life insurance industry started the year strongly with a total of S$811.0 million (US$578 million) in weighted new business premiums from January to March, a 19% increase compared to 1Q2016, said the Life Insurance Association Singapore yesterday. Banks were the main distribution channel for new life insurance sales, accounting for 46%, or $377 million in premiums.

The continued healthy growth can be attributed to the industry’s agility in responding to consumers’ fast-changing needs, with life insurers providing consumers more options in the form of new products and multiple channels to buy insurance policies from, said LIA Singapore. 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 weighted premiums. Compared to the same period in 2016, the industry recorded a 30% increase to S$281.3 million and a 14% increase to S$529.7 million in both categories respectively.

Mr. Patrick Teow, LIA Singapore President, 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.”

Banks dominate for new business

The contribution of new business by the different channels of distribution is as follows, with banks (46%, $377 mln) outdoing tied representatives (33%, $264 mln) and financial advisers (17%, $135 mln) by weighted premiums. The remainder was from products sold without intermediaries.

Distribution channel

By weighted premium (%)

By number of policies (%)

Tied Representatives

33

53

Bank Representatives

46

16

Financial Adviser Representatives

17

16

Others (products sold without intermediaries, e.g. DPI, ElderShield)

4

15

The industry recorded sum assured for new business totalling S$24.3 billion. This was a 10% increase compared to the corresponding period in 2016 as the industry continues to better meet the protection needs of society, said LIA Singapore. Tied agents accounted for the bulk of sum assured at 43% ($10.5 bln), compared with FAs (28%, $6.7 bln) and the bank representatives (25%, $6.0 bln).

Health coverage

Meanwhile, approximately 20,000 Singapore residents bought additional health insurance coverage in 1Q2017 to complement MediShield Life, the local national health insurance scheme that provides lifelong protection against large medical bills.

In all, new health insurance premiums totalled S$66 million for 1Q2017, of which Integrated Shield Plans (IP) premiums and IP riders (optional benefits) accounted for 90 per cent (S$59 million). The remaining S$7 million was contributed by other medical plans and riders. 

As of March 2017, 2.91 million lives (approximately one in two individuals in Singapore) were insured.