Life insurance sales in S’pore up nearly 20% in 2024, driven by surge in investment-linked plans

SINGAPORE - A surge in consumers taking up investment-linked plans helped Singapore’s life insurance business to recover strongly in 2024 after a drop in sales the previous year.

The life insurance sector here grew 19.7 per cent year on year in 2024 to $5.87 billion in total weighted new business premiums, which is a rough measure of new sales, according to figures from the Life Insurance Association (LIA) Singapore released on Feb 13.

This is a reversal from the 3.9 per cent year-on-year dip in total weighted new business premiums posted in 2023 to $4.9 billion, led by a drop in the single premium business.

LIA attributed the 2024 growth to sales of investment-linked plans (ILPs), which jumped 41 per cent year on year to $2.3 billion from $1.6 billion in 2023.

It said more consumers are leveraging ILPs for wealth accumulation, especially amid economic uncertainty and higher interest rates, as these policies provide life insurance protection while offering higher potential returns.

It noted that regular premium ILPs – plans whose premiums are regularly allocated to sub-funds at various prices – also recorded a surge in uptake as they help mitigate market timing and volatility through dollar-cost averaging.

Of the new sales, 34.1 per cent of weighted premiums came from financial advisers, 31.3 per cent from bank representatives and 30.5 per cent from tied agents or agents selling a specific insurer’s products. The remaining sales were from direct online channels or were products that are sold without intermediaries.

For the full year, non-participating products grew 19.2 per cent to $2.19 billion from a year ago, while the participating plan business dipped slightly by 2.7 per cent.

In 2024, the total sum assured in Singapore went up 3.6 per cent year on year. LIA said financial advisers contributed 40.7 per cent of the growth in total sum assured, while tied agents accounted for 33.3 per cent.

There was also a 1.8 per cent increase in the number of lives covered by health insurance, LIA said. About 40,000 more Singaporeans and permanent residents were covered by Integrated Shield Plans (IPs) at the end of 2024 compared with a year ago.

In all, 2.97 million lives or about 71 per cent of Singapore residents have IPs which provide coverage on top of MediShield Life.

The total weighted new business premiums for individual health insurance here hit $624.8 million in 2024, with a 103 per cent rise in the fourth quarter from the same period in 2023.

Specifically, the sale of IPs and IP riders, which make up 89 per cent of individual health insurance premiums, grew. Total new business premiums for IPs and IP riders shot up 49.1 per cent to $556.6 million in 2024.

In 2024, the life insurance industry paid $18.1 billion to policyholders and beneficiaries, up 33.4 per cent compared with 2023. Most of this amount was for policies that had matured, while $1.9 billion was for death, total and permanent disability as well as critical illness claims.

LIA president Dennis Tan said the life insurance industry’s recovery in 2024 sets a strong foundation for continued growth.

He added that while interest rate volatility and geopolitical uncertainties continued to pose challenges in 2024, the sector has remained resilient and agile.

In the months ahead, he said medical inflation is a persistent challenge that is projected to rise by double digits across the Asia-Pacific region and by 12 per cent in Singapore.

Said Mr Tan: “This surge is fuelled by a complex mix of factors, including an ageing population, escalating costs of advanced medical treatments, potential overconsumption of healthcare services and rising labour expenses.

“Ultimately, keeping healthcare premiums affordable is a shared societal responsibility – one that requires collaborative action from insurers, the medical community, policymakers and consumers.”