A Look at the Latest Trends in Singapore’s Life Insurance Market
The trend of purchasing life insurance online has gained significant momentum, now accounting for 40.7% of new policies in the first three quarters of 2022. However, agents remain the preferred choice for high-premium policies, holding a dominant share of the market.
The Life Insurance Association (LIA) of Singapore reported on Thursday (Nov 10) that online life insurance purchases surged to 603,116, a notable increase from 370,528 during the same period in 2021. Despite the growth in online sales, the total direct online purchases only amounted to S$106 million, or 2.7% of the total new business premiums of S$3.87 billion for the year.
For higher-premium policies, bank representatives were the preferred channel, contributing 35.1% of new business premiums despite representing just 6.1% of new policies. Tied agents ranked second, responsible for 30.8% of new policies and 32.6% of new premiums, while financial advisers brought in 18.9% of new policies and 26.5% of premiums.
In total, 1.5 million new policies were purchased in the first nine months of 2022, reflecting a 12.8% increase from the previous year. Despite this growth in policy numbers, the weighted premiums fell by 5.9%, from S$4.1 billion to S$3.87 billion.
The dip in premiums was particularly notable in single-premium products, which saw a 31.7% drop compared to the same period in 2021. This decline was attributed to global market volatility and increased competition in the market for short-term endowment products.
While single-premium policies struggled, annual premium products saw an uptick. Sales for these products increased by 7.2% in Q3, narrowing the year-to-date gap in premiums compared to 2021.
Health insurance also showed mixed results. Individual health insurance premiums fell slightly, while premiums for integrated shield plans (IPs) and riders rose by 13% from Q2 to Q3, highlighting their continued importance in the market.
The LIA also reported a rise in claims paid out, with the industry paying S$8.7 billion to policyholders and beneficiaries, marking a 14.8% increase from the previous year.
Looking forward, LIA President Khor Hock Seng anticipates that the business climate for life insurance will remain challenging in the short to medium term, citing market volatility and inflationary pressures. Despite these concerns, he expressed confidence in the resilience of Singapore’s life insurance sector.
