Singapore:Life insurance grew 10% in 1H2017

| 15 Aug 2017

Singapore's life insurance industry has continued on a momentum of strong growth, achieving a total of S$1,682 million (US$1,235 million) in weighted new business premiums for 1H2017. This was 10% up from the same period last year, against the backdrop of economic uncertainties, an ageing population and a soft labour market.

Notably, retirement plans accounted for approximately 5% of the total weighted premiums for 1H2017. There was an uptake of 10,680 retirement policies, with approximately S$84 million of weighted new premiums recorded over the half year, said the Life Insurance Association Singapore (LIA) in a statement on the industry's performance.

Retirement planning is an ongoing concern for both Singapore’s pre-retirees and their children because there will only be two working adults supporting one retiree by 2030, as compared to about five per retiree in 2016. The younger generation will be shouldering a greater financial burden of supporting the ageing population and ensuring that they have enough for other milestones, such as marriage and setting up their own families.

Health insurance amounted to S$154 million premiums for 1H2017, of which Integrated Shield Plans (IP) premiums and IP riders accounted for 90% (S$139 million). IPs are plans which provide enhanced coverage by private insurers on top of the benefits of the basic government-run MediShield health insurance scheme. The remaining ten% (S$15 million) came from other medical plans and riders.

As at end june 2017, about one in two individuals in Singapore (around 2.92 million lives) are insured. The LIA said that it will release the results of a protection gap study before next year. The last time it did such a study was five years ago.

In terms of distribution, tied agents accounted for 55% of policies sold (35% weighted premiums), while bancassurance accounted for 13% in terms of number of policies, but a majority 43% in terms of premiums. Financial advisers sold 17% of new policies (accounting for 18% of premiums). Other channels, including direct purchase insurance without intermediaries, made up 15% of policies sold, or only 4% of premium).

As employment in Singapore continues to grow in the finance and industry sector, there has been an 8% increase in the number of employed individuals within the life insurance industry in 1H2017, noted the LIA. 6,857 individuals were employed by member companies, up from 6,328 staff in 1H2016. Over 14,000 representatives held exclusive contracts with companies that operate a tied agency force, said the LIA.