Singapore general insurance industry sees rise in underwriting profit despite more claims paid out

SINGAPORE (THE BUSINESS TIMES) - Singapore's general insurance sector saw a 10.7 per cent rise in underwriting profit to $262.7 million last year, from $237.3 million in 2020, despite more claims being paid out.

Overall gross written premiums rose 8 per cent on year to $4.4 billion as of end-2021, driven by strong uptake across its top five business segments, the General Insurance Association of Singapore (GIA) said on Thursday (March 24).

The GIA said the positive uptake was due to the endemic Covid-19 prompting consumers to safeguard their assets against evolving risks.

The sector ended the year with a payout of $84.3 million more in claims compared with the previous pandemic year for three of its largest segments – motor, health and employer’s liability – which represent half of the general insurance market. In total for 2021, $1.24 billion in claims were paid out across all segments. 

By segment, motor insurance recorded an underwriting profit of $49.7 million for 2021, from $104.5 million a year earlier.

Although it posted a 2.7 per cent on-year increase in gross written premiums to $1.15 billion in 2021, total claims paid out also rose 8.3 per cent as more activities resumed and injuries due to road accidents increased.

The health insurance segment recorded an underwriting loss of $5.1 million in 2021, from a profit of $17.9 million a year ago, due to a 7.5 per cent increase in claims paid out, despite gross written premiums rising 7.8 per cent to $746.5 million.

Meanwhile, the property segment posted an underwriting profit at $41.9 million, from $43.7 million in 2020, due to a 20.9 per cent increase in gross written premiums amid a thriving property space in Singapore

The GIA expects a continued upward trend for the property insurance segment as construction activities progressively ramp up.

As for employers' liability insurance, the underwriting profit was down at $29.9 million from $41 million a year ago.

Gross written premiums rose 4.7 per cent to $399.3 million in 2021, but the segment also paid out 13.7 per cent more claims with the rate of workplace injuries being more comparable with pre-Covid-19 levels as workplace activities resumed.

The travel insurance segment, however, saw underwriting profit rise to $8.3 million from $5.2 million a year ago, although gross written premiums fell 15.7 per cent to $48.5 million amid muted travel activity in the first half of 2021.

GIA president Ronak Shah noted that cyber risks and sustainability will become increasingly pertinent issues moving forward.

Mr Shah said: "In 2022, our dialogue and initiatives in place will move talk to action to urgently address these increasingly worrying risks and our policyholders' changing protection needs."

"As we step into 2022 with greater optimism, our efforts will be focused on driving forward-looking developments with purpose, innovation and collaboration at the core," he added.

Among others, the association said the sector will be focused on monitoring fraudulent activity. It noted that fraudulent activities may continue increasing in 2022 with business and social activities resuming to pre-pandemic levels.

Additionally, the GIA also announced the appointment of its new management committee, which will last from 2022 to 2024. It re-elected Mr Shah as president, Mr Christian Sandric as vice-president, Mr Jimmy Tong as honorary secretary and Ms Joanne Huang as honorary treasurer.