SINGAPORE (THE BUSINESS TIMES) – The life insurance sector in Singapore recorded $2.63 billion in weighted new business premiums for the first six months of 2022, down 1.9 per cent from a year ago.
This came amid a weaker showing in the annual premium product category, where total weighted annual premiums fell 15.1 per cent to $1.19 billion in H1. However, single premium products remained a bright spot, posting a 12.5 per cent rise in weighted premiums to $1.44 billion.
Single premium products are seeing sustained growth and remain popular among Singaporeans, Mr Khor Hock Seng, president of the Life Insurance Association, Singapore (LIA) noted in a statement on Thursday (Aug 11).
“The life insurance industry has remained resilient and achieved a commendable performance amid the increased uncertainty in the global economy due to geopolitical tensions, recurring Covid-19 waves and rising inflationary pressures,” he said.
By product classification, par products accounted for 44 per cent of new sales in H1, while non-par products accounted for 34 per cent. Investment-linked products made up the remainder. This mix has remained stable from last year, LIA said.
Both par and non-par policies have a guaranteed payout, but par policies allow the customer to participate or share in the profits of the insurance company.
In first half of 2022, the life insurance industry paid out $5.92 billion to policyholders and beneficiaries. Of this amount, $5.2 billion was for policies that matured, while the remaining $740 million was for death, total and permanent disablement and critical illness claims.
The number of new policies purchased online by customers, without financial advisory, continued to rise, coming in at 430,725 in H1, more than double the 203,351 a year earlier. They amounted to $66 million in weighted premiums, or 2.5 per cent of H1’s total weighted premiums.
Among health insurance offerings, Integrated Shield Plans (IPs) was the mainstay. Total new business premiums for individual health insurance amounted to $155.9 million in H1. IPs and IP rider premiums accounted for 83.5 per cent, with the remainder comprising other medical plans and riders.
The number of Singaporeans and permanent residents protected by IPs, which provide coverage on top of MediShield Life, rose by some 20,000 to 2.87 million, or about 70 per cent of the resident population.
On the manpower front, Singapore’s life insurance industry employed 8,853 as at end-June, stable compared with a year ago. Meanwhile, 14,295 representatives held exclusive contracts with companies that operate a tied-agency force.
Looking ahead, the industry continues to face a tight labour market, with talent attraction and retention a challenge. Macroeconomic volatility and inflation will continue to impact life insurers in the near term, said Mr Khor.
He added: “Life insurers will also have to cater to the rapidly evolving consumer product and purchase preferences, as consumers increasingly expect insurers to offer more flexibility and personalisation for their products and services.”