SINGAPORE - Singapore’s life insurance industry garnered $2.68 billion in weighted new business premiums for the first six months of this year, surpassing the same period in 2019 before the onset of the Covid-19 pandemic.
New sales for the first half of this year surged 61 per cent from $1.66 billion in the year-ago period, which felt the impact of Singapore’s circuit breaker measures. But they were also higher than the $1.91 billion in new sales for the first half of 2019.
Mr Khor Hock Seng, president of LIA Singapore, said that the strength of the life insurance business in the first half of this year reflects a level of stabilisation in Singapore’s economy from the immediate impact of Covid-19 last year.
“The growth in uptake of life insurance also seems to show that more people are placing greater importance on providing for their long-term financial and healthcare needs in the midst of an evolving pandemic environment,” he said.
Singapore’s economy, which shrank 5.4 per cent last year, is now expected to grow by 6 per cent to 7 per cent this year.
Weighted new business premiums measures premiums collected on new policies by taking into account 10 per cent of the value of single premium products, all of a year’s premiums for annual premium products and adjusted value for products with premium payment durations of less than 10 years.
Single-premium products recorded a 106 per cent annual increase in sales, generating $1.28 billion in weighted premiums, the Life Insurance Association (LIA) Singapore said on Thursday (Aug 12) in its report on the industry’s first half performance.
Annual premium products also saw a significant uptake, with sales rising 35 per cent from the same period last year. This amounted to $1.4 billion in weighted annual premiums.
LIA said that single-premium par and non-par products comprised 84 per cent of all single-premium purchases, while single-premium linked products made up the remaining 16 per cent.
Meanwhile, 8 per cent of the overall single-premium policy sales came from Central Provident Fund Investment Scheme-included products, with cash-funded products accounting for the remaining 92 per cent.
New policies bought online grew to 203,351 in the first half of this year, compared with just 32,952 in the same period a year before.
As at June 30, 43,000 more Singaporeans and permanent residents were covered by Integrated Shield Plans (IPs) and riders which provide coverage on top of MediShield Life.
A total of 2.85 million lives - or about 70 per cent of Singapore residents - are now protected by IPs and riders.
Total new business premiums for individual health insurance for the first half of this year amounted to $176.8 million, with IPs and IP rider premiums accounting for 82 per cent and other medical plans and riders making up the remaining 18 per cent.
A total of 22,137 retirement policies were purchased in the first six months of the year, up 34 per cent from the first half of last year.
Employment in the life industry dipped slightly compared with the corresponding period last year, bringing Singapore life insurance industry's workforce to 8,589 employees as at June 30.
In the same period, 14,893 representatives held exclusive contracts with companies that operate a tied agency force.
Looking forward, Mr Khor said that the life insurance industry will continue to focus on meeting its environmental, social and corporate governance commitments and workforce transformation goals for the year ahead.
"The LIA, as a strategic partner of the Green Finance Industry Taskforce, is working together with the general insurance and reinsurance sectors to build the industry's capacity for the progressive adoption of local best practices and international standards," he noted.
"We are also working on industry initiatives to future-proof our workforce as technology and digital tools impact the way we do our jobs," Mr Khor added.