Mr Derek Teo, president of the General Insurance Association (GIA), said on Wednesday that losses from compensation cover fell to $7.8 million last year, down from $13.7 million in 2006.
The better result was thanks partly to a 26 per cent jump in total premiums to $209 million, as the construction boom led more companies to buy policies to cover their expanded workforce.
But Mr Teo added that the Workmen's Compensation (Amendment) Bill, which takes effect from April 1, could expose GIA members to significantly higher claims costs.
The new bill will allow more employees to receive compensation when they are injured at work and compensation levels will also be raised.
In all, 2.1 million employees will be covered, compared with 1.25 million under the old Act.
This could jack up claims costs for handling existing policies by 35 per cent, according to a Nanyang Technological University (NTU) study commissioned by the GIA.
This means insurers are likely to raise premiums and GIA members are now reviewing their portfolios, said Mr Teo, who was speaking after the GIA's annual general meeting lunch at Marina Mandarin Hotel yesterday.
Overall, gross premiums for the general insurance sector rose 8.3 per cent last year to $2.48 billion.
Mr Heng Swee Keat, managing director of the Monetary Authority of Singapore (MAS), said the industry here has a 'strong regional and international profile', with the offshore business comprising over half of total gross premiums written out of Singapore.
GRACE NG