Singapore's life insurance industry recorded growth of 4% year-on-year in weighted new business premiums to S$4.23 billion for 2018, according to Life Insurance Association, Singapore (LIA Singapore). ***
The continued growth is attributed primarily to the continued uptake and stable performance of annual premium policies which grew 7% y-o-y to $2.82 billion. ***
The combination of turbulent markets late last year combined with regulatory requirement to reduce the sales charge for purchases of CPF Investment Scheme (CPFIS) products contributed to a 3% y-o-y dip in the uptake of single premium plans to $1.42 billion.*
Bridging the protection gap
Life insurers continued to make progress in supporting individuals in Singapore bridge their protection gap with annual increase of total sum assured for new business achieving year-on-year growth of 7% to reach close to $140 billion at the end of 2018.
An additional 64,000 Singaporeans and Permanent were covered by Integrated Shield Plans (IPs), as at the end of December 2018. There are now 2.73 million - approximately 68% of Singapore residents – with IP coverage to complement coverage provided under MediShield Life.
Uplift in purchase of policies for retirement
By policy count, the industry recorded a notable year-on-year increase of 48% in the uptake of retirement policies designed to provide regular payouts to policyholders during their retirement years. 38,120 policies were purchased in YTD 4Q2018, a significant 12,345 more policies compared to last year in which there was a total uptake of 25,775 policies as at end December 2017.
Contributing to $338 million in weighted premiums in 2018, retirement policies accounted for approximately 8% of total weight premiums for the year, up from 5% for 2017.
The year ahead
Mr Patrick Teow, President of LIA Singapore, said, “Singapore’s life insurance industry achieved growth despite a challenging end to 2018 with market volatility particularly pronounced in the last quarter. As we remain alert to the repercussions of continuing trade frictions and geo-political challenges, I am confident that life insurers will demonstrate agility and resilience by adapting to the changing environment to deliver solutions to meet Singaporeans’ insurance, investment and savings needs.”
He also said that for 2019, LIA will continue to focus on helping society narrow the protection gap through public education and working closely with partners such as MoneySense, Singapore’s national financial education programme.
*** Please note these are updated figures provided by LIA Singapore on 13 Feb 2019.
* The government had announced in March 2018, the removal of sales charges for products offered under CPFIS. Taking effect on 1 October 2018, sales charges for purchases of CPFIS products were halved from 3% to 1.5%. Sales charges will be removed entirely from 1 October 2019.
These adjustments are being introduced to reduce the cost of investments for CPFIS members, as well as target the scheme to members with knowledge and time to invest, and are prepared to take investment risk, according to the statement made in Parliament.
Insurance market is saturated? Singapore's protection gap stands at US$672 bln
Singapore: Life insurers back medical fee benchmarks published by govt
Singapore: Life sector's new business premiums hit record S$4 bln in 2017
Follow Asia Advisers Network on Facebook, Twitter and YouTube.