The Life Insurance Association of Singapore (LIA) has formed a working committee to review the recommendations of the Health Insurance Task Force (HITF) over the next six months, which will provide further guidance for insurers to consider their own implementation plans.
Last month, the HITF had issued its recommendation paper to address the issue of rising claims costs for Integrated Plans (IPs), which are placing upward pressures on premiums. IPs provide the benefits and coverage of the basic government-run health insurance scheme, MediShield Life, as well as enhanced coverage provided by private insurers.
LIA President Dr Khoo Kah Siang noted that the continued upward trend in the number of lives covered by IPs and IP riders showed Singapore residents’ growing appreciation of the need for health insurance and the benefits provided by these IP and IP riders. He was speaking to reporters at a media briefing on the life industry’s results for 3Q 2016.
Approximately 10,000 more Singapore residents took up new health insurance coverage in the third quarter alone, which were mostly IPs and IP riders. In all, new health insurance premiums totalled S$172 million (US$123.8 million) for January – September 2016, of which IP premiums and IP riders accounted for 85% (S$146 million). The remaining S$26 million was contributed by other medical plans and riders. Approximately one in two individuals in Singapore or 2.87 million lives were covered by health insurance with total premiums amounting to S$1,367 million, at 30 September 2016.
Dr Khoo said that the LIA fully supports the HITF’s recommendations and suggested that the committee would focus on those related to the use of healthcare provider panels, preauthorisation and the structure of co-insurance deductibles.
He said that the industry would need to work with authorities and different stakeholders to implement them correctly, and it would be a “long journey and marathon”. “In as much as life insurers need to play their part, unless collective and specific efforts are made by all the different parties, Singapore will not be able to effectively tackle escalating healthcare costs that are beyond the usual incremental increase, and therefore escalating health insurance claims,” he said.
Overall, the life insurance industry in Singapore continues to report steady progress with an 8% in total weighted new business premiums for January-September 2016 compared to the same period in 2015. Total weighted new business premiums amounted to S$2,331 million for the first three quarters of the year.
Retirement planning products
LIA also reported, for the first time, data related to the uptake of retirement planning products given Singapore’s growing interest in this area as one of the countries with the fastest ageing populations globally. These plans accounted for about 5% of the total weighted premiums for January-September. About 14,500 policies were sold, with approximately S$116 million of weighted new premiums recorded for the period mentioned.
Against an anticipated challenging 2017 economy and low growth in Singapore, Dr Khoo noted that protection remains a key growth driver for the life insurance industry in the next year, in recognition of the significant protection gap in the nation despite the mature market. Low interest rates, he added, might make it difficult for insurers to offer viable single premium products.
The 3Q update was hosted by Dr Khoo, Deputy Presidents, Mr Ken Ng and Mr Patrick Teow and Ms Pauline Lim, Executive Director of LIA Singapore. Mr Teow, who is CEO of AIA Singapore, was elected in October 2016 to replace Mr Philip Seah, who has since moved to a different role within Prudential Asia from the Singapore operations.