The Life Insurance Association (LIA) of Singapore has announced a set of industry results for the half year ending June.
The sector recorded a total of $2.2 billion in weighted new business premiums for H1 2023, a significant decline of 16.7% compared to 2022. LIA attributed this to current economic uncertainty, with inflation and cost-of-living crisis on the rise. Single-premium policies have also decreased substantially with a 52% falloff in weighted premiums compared to last year, a percentage amounting to $691 million.
There is, however, some growth for annual premium policies which saw a quarter-on-quarter increase of 16.8% in Q2, or $807.5 million; this figure was $691.2 million last year. In-force premiums for group life and health also continued to trudge on with a 15% uptick in Q2 2023 from Q2 last year to record a total of $2.17 billion to date.
The shrinking new business premiums comes amidst uncertain economic growth, with economists pulling back on their growth forecast and possibly affecting figures for the rest of the year. Single premium policy demand continues to see decline, LIA said, as the macroeconomic environment continues to be volatile with rising interest rates in an extremely competitive marketplace.
Despite the headwinds, the uptake of annual premium policies remained strong as it increased by 26.3% in the first half year compared to 2022, amounting to $1.5 billion in total weighted premiums.
For sum assured, it was tied representatives that led the industry with a sum of $25.6 billion in H1, accounting for 38.9% of the total amount. Financial adviser (FA) representatives followed closely with $23.4 billion (35.6%). In total, the industry recorded $65.8 billion in sum assured for the first half year, a growth of 3.8% over the same period in 2022.
LIA also recorded approximately 72,000 Singaporeans and permanent residents who took up new integrated shield plans (IPs) as of the half year. In total, 2.9 million citizens (71% of the population) are now protected by IPs which provide coverage on top of MediShield Life.
The sector also paid out $6 billion to policyholders and beneficiaries for the claims process, an increase of 1% over the same period last year. Of this figure, $5.16 billion was for policies that matured, while the remaining $838.6 million was for death, critical illness, or disability claims for more than 9,900 policies.
“As we face a volatile economic landscape with no clear signs of headwinds abating, the life insurance industry must embrace agility and continue to actively listen and cater to the ever-changing demands of consumers,” LIA Singapore president Dennis Tan said.
“The life insurance industry will also continue to explore digitalisation initiatives while cultivating a pool of talent, aimed at bolstering operational efficiencies and elevating customer experiences. Our central focus remains on addressing the financial and protection needs of Singapore's community as we navigate the global headwinds and challenges,” he said.
What are your thoughts on this story? Please feel free to share your comments below.
