SINGAPORE - The launch of Direct Purchase Insurance (DPI) by life insurers in early April saw a take-up of fewer than 200 policies, most of which are for term or pure protection cover. They amounted to almost $200,000 in weighted new premiums.
This was disclosed during a results briefing by Life Insurance Assciation, Singapore (LIA) this morning on its performance in the first half of this year.
DPI products are basic life insurance plans sold here without financial advice and are purchased directly from life insurers' customer service centres or websites.
For the period between Apr 7 and end June, 193 DPI policies were sold, of which 97 per cent comprised regular premium term life policies. These are plans that provide insurance protection at affordable premiums, and would serve those seeking to provide basic protection for their loved ones.
Calling it an 'encouraging start', LIA's president Dr Khoo Kah Siang said: " We are encouraged to see the number. This is another avenue for customers to access insurance."
He hopes to see further penetration to help close the protection gap.
Life insurers recorded a 3 per cent growth in weighted new business premiums of $1.35 billion from January to June, over the corresponding period last year.
The industry achieved a 3 per cent growth to $964.9 million of weighted annual premium products and a 2 per cent rise to $387.8 million in weighted single premium products. Of the latter, 19 per cent comprised CPF-funded policies.
LIA noted a shift from single premium non-linked to single premium linked products, and attributed this to the low interest rate environment where yields for shorter term non-linked single premium plans may be less attractive to customers.
Said Dr Khoo: "The 1H 2015 performance is about level compared to 1H 2014. There is slight growth in both single premium and regular premium business. With relatively low interest rate, sales of traditional (that is, non-linked) single premium plans dropped while sales of investment linked plans, both single premium and regular premium, picked up admist the positive but volatile equity market."
Overall, investment linked products contributed $272 million in the first six months of this year, accounting for 20 per cent of total weighted new business premiums.
Looking forward, LIA expects industry growth for this year to be stable compared to last year.
The association expects more pick up in integrated hospitalisation plans as people gain clarity on the benefits provided by the upcoming MediShield Life and seek higher health coverage and additional benefits.