Singapore's life insurance industry achieved stellar results in 2017, with total weighted new business premiums hitting a record S$4.09 billion (US$3.08 billion), an impressive 24% y-o-y increase. This is the first time it has crossed the S$4 billion mark, said the Life Insurance Association, Singapore (LIA Singapore) at a results briefing on Friday.
Double-digit growth across all product types
The sector saw strong double-digit growth across both single and annual premium products within the period. Weighted single premiums rose significantly by 43% to reach S$1,46 billion last year. Of these, single premium par and non-par products comprised 73%, with the remaining 27% single premium linked products.
In 4Q2017 alone, there was a remarkable 91% jump in uptake of single premium products compared with the same period in 2016. The total S$563.2 million recorded within that quarter made up 38% of the entire year’s uptake.
Weighted annual premiums rose by 16% to reach S$2.6 billion.
Increased sum assured and uptake of protection-focused policies
The industry continues to make significant progress supporting the population’s protection needs. Total sum assured for new business rose strongly by 12% y-o-y, totalling S$130.5 billion, continuing the growth trend since 2014. Life insurers paid out S$5.82 billion to policyholders and beneficiaries in 2017, of which S$4.93 billion was for policies that matured. The remaining S$884 million was for death, critical illness, or disability claims, said LIA Singapore.
In line with the national focus on retirement planning, 25,775 policies designed to provide regular payouts to policyholders during retirement years were purchased, a 27% increase from 2016. These plans account for about 5% of the of the total weighted premiums for 4Q2017.
Health insurance premiums amounted to S$374 million, of which Integrated Shield Plans (IP) premiums and IP riders accounted for 91% (S$341 million). The remaining 9% (S$33 million) came from other medical plans and riders.
As at 31 December 2017, 2.96 million lives, or about three in four Singaporeans have an IP which provides coverage over and above the component included in MediShield Life, the local national health insurance scheme that provides lifelong protection against large medical bills.
2017 also saw implementation and progress on numerous recommendations put forth by the industry-driven Health Insurance Task Force (HITF) which brings together all relevant stakeholders to collaborate and take pro-active steps to collectively manage the escalating healthcare and healthcare insurance costs in Singapore.
Managing rising claims and protection gap
Mr Patrick Teow, LIA Singapore President, said that premiums will likely continue to increase in the foreseeable future, exacerbated by rising claims. He added that the industry is working closely with the Ministry of Health to address claims inflation. “For the industry, we want affordable, sustainable healthcare for everybody,” he said. Several insurers have also introduced their own initiatives such as wellness programmes for customers.
He added that the results of the protection gap study, that was announced last year and focus on underinsurance, are expected to be released in March. This time round, the study also addresses critical illnesses, unlike the last study in 2012.
“As an association, we feel that we should not be just giving the results of the study…we will take one more step to provide a guiding roadmap, to tell people how they should handle the gap and how they should be covered for protection insurance.”
Meanwhile, the manpower front recorded an 11% increase in the number of employed individuals within the life insurance industry, standing at 7,429 as at 4Q2017 compared to 6,663 in 4Q2016. 14,793 representatives held exclusive contracts with companies that operate a tied agency force.
More of Singapore’s 2017 life insurance industry results can be found here.