Life insurers' balancing act only gets harder

Tougher to deliver par funds' projected non-guaranteed bonuses amid low interest rates, stricter risk-based capital framework

A persistent low interest rate environment and a tougher risk-based capital framework would make it harder for Singapore life insurers to deliver the projected non-guaranteed bonuses linked to participating or par funds, even though most of the 10 key life insurers are able to at least support any such payouts.

Based on insurers' 2019 returns that were filed with the Monetary Authority of Singapore (MAS), Manulife Singapore, Prudential Singapore and AIA Singapore topped the geometric average net investment returns for par funds for the three-year, five-year and 10-year periods respectively.

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A version of this article appeared in the print edition of The Sunday Times on November 08, 2020, with the headline 'Life insurers' balancing act only gets harder'. Print Edition | Subscribe