Q1 2024: Singapore Life Insurance Industry marks strongest performance since 2020

For the period January 2024 to March 2024 (Q1 2024), the Singapore life insurance industry posted the strongest performance for corresponding periods as compared to the previous years since the onset of the pandemic.

Singapore’s life insurance industry recorded a total of S$1.37 billion in weighted new business premiums for Q1 2024, an increase of 32.2% compared to Q1 2023. Single premium policies recorded a 46.4% increase in weighted premiums amounting to S$500.4 million in total for Q1 2024, reported the Life Insurance Association, Singapore (LIA Singapore).

The increase in demand for single premium policies may be attributed to a less volatile macroeconomic environment, with Singapore’s economy picking up in Q1 2024, said LIA Singapore.

Focus on protection: Continued increase in uptake of annual premium policies and total sum assured

The industry also recorded an increased take-up of annual premium policies by 25.2% compared to the same period last year, amounting to S$866.5 million in total weighted premiums.

Continued uptake in annual premium policies showed a sustained trend where meeting protection needs are being prioritised in Singapore. This is further evidenced by the increase in the sales of non-participating products to 42% for this period.

Financial Advisory (FA) Representatives led the charge in getting $12.6 billion sum assured in the first quarter of 2024, accounting for a notable 37.2% of the total amount of sum assured for the quarter.

Tied representatives secured $12.3 billion in sum assured, accounting for 36.3% of the total amount sum assured in Q1 2024.

The industry recorded $33.8 billion in total sum assured during this period. This is a boost of 11.9% compared to the same period last year where it was primarily driven by Tied Representatives who accounted for 39.6% of sum assured amounting to $12.0 billion with FA Representatives accounting for 34.3% to drive $10.4 billion in sum assured for Q1 2023.

Mr Dennis Tan, President, LIA Singapore, “The life insurance industry is starting the year positively by focusing and achieving progress in narrowing our nation’s protection gap as we grow the sector as a whole. While the concerns about the potential impact of the macro-economic environment remain pertinent, the industry continues to be agile to swiftly respond to consumer needs in Singapore. Our priority remains in helping the population meet their financial and protection needs.”

Integrated Shield Plans (IPs) remains a critical component of health insurance coverage

Approximately 35,000 more Singaporeans and Permanent Residents were covered by IPs as of 31 March 2024.

In total, 2.94 million lives – approximately 70 % of Singapore residents – are protected by IPs, which provide coverage on top of MediShield Life. Total new business premiums for individual health insurance for Q1 2024 amounted to S$98.6 million, an increase of 5.3% compared to the same period last year.

Overall, IPs and IP rider premiums accounted for 82.9% (S$81.7 million) and the remaining 17.1% (S$16.9 million) comprised of other medical plans and riders. Medical inflation continues to be a challenge in Singapore and requires the joint efforts of all parties within the healthcare eco-system to actively manage.

The life insurance industry is supportive of increased transparency across the entire healthcare system including clear value and quality of care metrices. The industry remains committed to working in close collaboration with regulators and the medical industry through the Multilateral Healthcare Insurance Committee to address this challenge.

Claims payouts

Between 1 January 2024 and 31 March 2024, the life insurance industry paid out S$5.01 billion to policyholders and beneficiaries, an increase of 94.6% compared to the same period last year. Of this amount, S$4.55 billion was for policies that matured, significantly driven by the maturing of Single Premium policies during this quarter from some member insurers. The remaining S$463 million was for death, critical illness or disability claims.

OTHER HIGHLIGHTS

Product classification

Par products accounted for 25% of new sales while non-par products accounted for 42%. Investment-linked products made up the remaining 33%. Non-par products represent the largest proportion of total weighted premiums for Individual Life & Health, contributing $570m in Q1 2024.

Distribution channels

New business from the different channels is as follows:

Manpower in the industry

Employment in the life industry increased by 1.6% compared to the corresponding period in 2023 with life insurers expanding in the areas of risk management. This brings Singapore life insurance industry’s workforce to 9,743 employees as at 31 March 2024.

In the same period, 13,297 representatives held exclusive contracts with companies that operate a tied-agency force.

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