Life insurance sales in Singapore up 32.2% to $1.37 billion in Q1, strongest growth since 2020

SINGAPORE - The life insurance industry in Singapore saw its strongest set of results in the first quarter of 2024 since the same period in 2020.

Weighted new business premiums for the quarter ended March surged 32.2 per cent year on year to $1.37 billion, the Life Insurance Association, Singapore (LIA) said on May 14. These premiums are for new policies.

Of this total, single-premium policies recorded a 46.4 per cent increase in weighted premiums to $500.4 million.

LIA said the increase in demand for single-premium policies may be attributed to a less volatile macroeconomic environment, with Singapore’s economy picking up in the first three months of 2024.

Weighted premiums for annual premium policies grew 25.2 per cent year on year to $866.5 million. LIA said the continued uptake in such policies “showed a sustained trend where meeting protection needs are being prioritised in Singapore”.

This is further evidenced by the increase in sales of non-participating products to 42 per cent for the quarter, LIA added. Such products consist of plans that do not provide buyers with dividend payouts.

The association said the industry’s first-quarter performance was its strongest compared with corresponding periods in the last few years, since the onset of the Covid-19 pandemic.

LIA president Dennis Tan said: “The life insurance industry is starting the year positively by focusing and achieving progress in narrowing our nation’s protection gap as we grow the sector as a whole.

“While the concerns about the potential impact of the macroeconomic environment remain pertinent, the industry continues to be agile in swiftly responding to consumer needs in Singapore. Our priority remains in helping the population meet their financial and protection needs.”

LIA noted that Integrated Shield Plans (IPs) remained a critical component of health insurance coverage.

About 35,000 more Singaporeans and permanent residents were covered by IPs as at March 31.

In total, 2.94 million people – accounting for about 70 per cent of Singapore residents – have IPs, which provide coverage on top of MediShield Life.

New business premiums for individual health insurance in the first quarter rose 5.3 per cent year on year to $98.6 million. IPs and IP rider premiums accounted for over 80 per cent of this amount, with the remainder made up of other medical plans and riders.

LIA said: “Medical inflation continues to be a challenge in Singapore and requires the joint efforts of all parties within the healthcare ecosystem to actively manage.

“The life insurance industry is supportive of increased transparency across the entire healthcare system, including clear value and quality of care metrics. The industry remains committed to working in close collaboration with regulators and the medical industry through the Multilateral Healthcare Insurance Committee to address this challenge.”

When it came to claims, the life insurance industry paid out $5.01 billion to policyholders and beneficiaries between Jan 1 and March 31, an increase of 94.6 per cent compared with the same period in 2023.

A large proportion of this, amounting to $4.55 billion, was for policies that matured, driven largely by the maturing of single-premium policies during the quarter from some member insurers, LIA said. The remaining amount was for death, critical illness or disability claims.

Employment in the life industry grew by 1.6 per cent compared with the first quarter of 2023, on the back of hiring expanding in the areas of risk management, LIA said.

In total, Singapore’s life insurance industry’s workforce reached 9,743 employees as at March 31. In the same period, 13,297 representatives held exclusive contracts with companies that operate a tied agency force, referring to the agents who are contracted to a specific insurance company and can offer products from only them.

Mr Tan said the outlook remains bright for the industry: “There are expectations of stronger growth in the overall finance and insurance sector, with a median forecast of 3.4 per cent in a recent survey by the Monetary Authority of Singapore, up from 2.5 per cent in the December survey.

“As we pursue efforts to drive this growth, we remain cautiously optimistic and adaptable.”