SINGAPORE – Market volatility and Singapore’s subdued economic growth weighed on insurance sales in the first nine months of 2019.
Singapore’s life insurance industry saw new business, in terms of total weighted premiums, shrink by 4 per cent to $3 billion for January to September, compared to the year-ago period.
This weaker showing is in line with Singapore’s economic performance, the Life Insurance Association, Singapore (LIA) said on Thursday (Nov 7). The city-state’s gross domestic product looks to have grown by just 0.1 per cent year on year in the July-September period, according to flash estimates released last month.
Sales of annual-premium policies grew 4 per cent from a year ago, amounting to $2.1 billion in total weighted annual premiums for the first nine months. This was mainly thanks to an increased uptake of participating plans, which met the protection and saving needs of consumers, LIA noted.
However, sales of single-premium products continued to drop, with weighted single premiums declining 20 per cent year on year to $889.2 million. Some 10 per cent came from CPF Investment Scheme-included products, while cash-funded products accounted for 90 per cent.
LIA president Khor Hock Seng said on Thursday: “The ongoing economic volatility has inevitably impacted the first three quarters’ performance for the life insurance industry.”
“However, LIA Singapore and member companies remain steadfast in our efforts to provide better protection for customers – reflected by the increased total sum assured. This is crucial when there is a growing cohort in the population of older people and increasing rates of chronic medical conditions among both the young and old,” Mr Khor added.
Total sum assured in the industry inched up by 1 per cent or about $1.3 billion year on year, amounting to $103.1 billion for the first nine months of 2019.
Meanwhile, there was a 57 per cent year-on-year surge in the uptake of retirement policies, which provide regular payouts during policyholders’ retirement years. A total of 38,622 of these policies were purchased during the nine months, an increase of 14,012 from a year ago.
For health insurance, Integrated Shield plans (IPs) remained a significant component. As at Sept 30, there were 53,000 more Singaporeans and permanent residents covered by IPs and riders which provide coverage on top of MediShield Life, compared to a year ago.
New business premiums for individual health insurance totalled $342.3 million for the first nine months of this year. IPs and IP rider premiums made up 90 per cent of this amount, while 10 per cent comprised other medical plans and riders.
The life insurance industry continued to expand its workforce during the January-to-September period. Employment rose by 3.6 per cent year on year as a result of 296 new hires, reaching a workforce of 8,444 employees as at Sept 30.
Recruitment was focused on data analytics, cybersecurity, and insurance business functions as life insurers pursued digital innovation, LIA said.
The association said that it will soon launch the life insurance calculator for consumers, to be hosted on LIA’s website. The digital calculator will help consumers better understand their financial protection needs.
Separately in September, LIA introduced a standard form for the pre-authorisation of hospital and surgical bills, so as to simplify the process and minimise the administrative burden for doctors.