Life Insurance industry insures S$1.3 billion more in sum assured for policyholders despite a 4 per cent dip in sales

07 Nov 2019

Employment in the industry rose by 3.6 per cent amid increased overall unemployment rate1

The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January to September 2019 (YTD 3Q2019).

Singapore’s life insurance industry recorded a total of S$3 billion in weighted new business premiums2 for YTD 3Q2019, a four per cent decrease from the corresponding period in 2018, in line with the nation’s economic performance3.

Against this backdrop, total sum assured for new business continued to increase by one per cent (approximately S$1.3 billion) year-on-year, amounting to S$103.1 billion.

“The ongoing economic volatility has inevitably impacted the first three quarters’ performance for the life insurance industry. However, the Association and member companies remain steadfast in our efforts and commitment to provide better protection for customers – reflected by the increased total sum assured. This is especially crucial at a time when there is a growing cohort in the population of older people and increasing rates of chronic medical conditions among both the young and old,” said Mr Khor Hock Seng, President of LIA Singapore.

 

Steady growth for annual premium products, narrowing protection gaps

Annual premium policies recorded a four per cent increase from the same period last year, amounting to S$2.1 billion in total weighted annual premiums mainly attributed to the increase in uptake of participating plans, meeting the protection and saving needs of consumers.

 

Single premium products continue to drop, primarily due to global market volatility4

A 20 per cent decline was recorded on a year-on-year basis for single premium products. For YTD 3Q2019, weighted single premiums amounted to S$889.2 million, of which:

     a) Single premium par and non-par products comprised 81 per cent; Single premium linked products took the remaining 19 per cent
     
     b) CPFIS-included products comprised 10 per cent; Cash-funded products took the remaining 90 per cent

 

Increased uptake of retirement policies

The industry recorded a 57 per cent increase in the uptake of retirement policies5 in YTD 3Q2019 compared to a year ago. A total of 38,622 policies were purchased as at 30 September 2019, a significant 14,012 more policies compared to the same period in 2018.

Making up about 12 per cent of total weighted premiums for YTD 3Q2019, retirement policies totalled S$356 million in weighted premiums for the first nine months of 2019.

 

Integrated Shield Plans (IPs) remain a significant component of health insurance

53,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 30 September 2019. 2.77 million lives approximately 69 per cent of Singapore residents are protected by IPs and riders, which provide coverage on top of MediShield Life.

Total new business premiums6 for individual health insurance for YTD 3Q2019 amounted to S$342.3 million. Overall, IPs and IP rider premiums accounted for 90 per cent (S$307.5 million) and the remaining 10 per cent (S$34.8 million) comprised other medical plans and riders.

 

Life insurance industry continues to expand its workforce

Employment in the life industry rose by 3.6 per cent as a result of 296 new hires, compared to the corresponding period in 2018, to reach a workforce of 8,444 employees, as of 30 September 2019. Recruitment is focused on data analytics, cyber security, and various insurance business functions as life insurers pursue digital innovation.

14,892 representatives held exclusive contracts with companies that operate a tied agency force as at 30 September 2019, a slight one per cent decrease compared to the corresponding period in 2018. The role of financial advisory representatives in Singapore remains essential in giving personalised advisory based on each individual’s circumstances and protection needs.

 

OTHER HIGHLIGHTS FOR YTD 3Q2019

Product Classification

Par products accounted for 50 per cent of new sales while non-par products accounted for 34 per cent. Investment-linked products made up the remaining 16 per cent.

 

Distribution Channels

The contribution of new business by the different channels is as follows:

Distribution Channel By Weighted Premium (%) By Number of Policies (%)
Tied Representatives 34.3 50.0
Bank Representatives 37.1 11.7
Financial Adviser Representatives7 23.3 22.2
Online Direct Channel8 0.2 0.5
Others (products sold without intermediaries, e.g. DPI, ElderShield) 5.1 15.6

  

Product License Classification

As of 30 September 2019, insurers holding “Normal” licenses contributed 98 per cent of new sales, while the “Defined Market Segments” (DMS) insurers9 made up the remaining two per cent of new sales for YTD 3Q2019.  

 

Group Insurance: Total Annual Premiums In-Force

Total annual premiums in-force for group insurance business rose by 16 per cent compared to the same period a year ago, amounting to S$1.3 billion. 

 

Assets

The life insurance industry managed assets of some S$229.3 billion, up 12 per cent compared with a year ago.

Assets of non-investment linked business accounted for S$192.2 billion, while the remaining S$37.1 billion were assets held for investment-linked business.

 

LOOKING FORWARD

The life insurance industry will continue to focus efforts on helping consumers narrow their protection gaps, despite the uncertain global economic environment.

On top of ongoing education efforts, consumers can look forward to the upcoming official launch of the life insurance calculator, which will be hosted on the LIA Singapore website. The digital calculator aims to help consumers gain a better understanding of their financial protection needs.

Other recent initiatives aimed at enhancing policyholders’ claims experience include:

  • Updates to Critical Illnesses (CI) definitions to clearly reflect intent of coverage, as a result of medical advancements and health trends in the past five years.10

  • Launch of the standard Pre-Authorisation Form to simplify the application process for doctors and bring about consistency of practice among all IP insurers.11

 

– End –

 

Note to Editor: Industry results of YTD 3Q2019 are available at https://www.lia.org.sg/news-room/industry-performance/

 

In Summary

New Business Sales (Weighted Basis)

Comparison with Corresponding Period

Jan – Sep 2019
S$

Jan – Sep 2018
S$

Change
Single Premium 889.2 million 1,108.3 million -20%
  Linked 166.1 million 308.1 million -46%
  Non-linked 723.1 million 800.2 million -10%
Annual Premium 2,149.5 million 2,061.4 million 4%
Total 3,038.7 million 3,169.7 million -4%

Comparison with Corresponding Quarter

Jul  Sep 2019 
S$

Jul – Sep 2018
S$

Change
Single Premium 357.3 million 430.5 million -17%
  Linked 63.1 million 111.0 million -43%
  Non-linked 294.2 million 319.5 million -8%
Annual Premium 767.1 million 719.8 million 7%
Total 1,124.4 million 1,150.3 million -2%

Comparison with Last Quarter                    

Jul  Sep 2019 
S$

Apr – Jun 2019
S$

Change
Single Premium 357.3 million 307.2 million 16%
  Linked 63.1 million 54.6 million 16%
  Non-linked 294.2 million 252.6 million 16%
Annual Premium 767.1 million 729.3 million12 5%
Total 1,124.4 million 1,036.5 million13

8%

 

1 Strong S'pore employment growth in Q3 but highest jobless rate in nearly a decade: MOM data (24 October 2019). TODAY. Available at: https://www.todayonline.com/singapore/new-spore-labour-data-shows-strong-employment-growth-highest-jobless-rate-nearly-decade  

2 Weighted new business premiums measures premiums collected on new policies by taking into account (1) 10 per cent of the value of single premium products, (2) all of a year’s premiums for annual premium products, and (3) adjusted value for products with premium payment durations of less than 10 years. The figure is calculated as follows: 10% Single Premium Insurance + 100% Annual Premium Insurance + Adjusted premium for Insurance with premium payment durations of less than 10 years.

3 Singapore’s GDP Grew by 0.1 Per Cent in the Third Quarter of 2019 (14 October 2019). Ministry of Trade and Industry Singapore. Available at: https://www.mti.gov.sg/-/media/MTI/Newsroom/Press-Releases/2019/10/Adv_Est3Q19.pdf

4 Singapore economy likely to stay listless over next 18 months (31 October 2019). The New Paper. Available at: https://www.tnp.sg/news/business/singapore-economy-likely-stay-listless-over-next-18-months

5 These policies are designed to provide regular payouts during policyholders’ retirement years.

6 With effect from 1 January 2016, the MediShield Life premiums have been excluded from LIA statistics. New Business premiums refer to the premium due to the new business sold in the year, as well as incremental premiums from any repricing of plans, and change in age-band of the insureds.

7 Financial Adviser (FA) Representatives include representatives of “related FA firms”. A related FA firm is a wholly-owned subsidiary of an insurance company.

8 Online Direct Channel is a new data point from January 2019, and it refers to “any web portal or application in the internet created, developed and maintained or operated by a life insurer, on which a client may purchase a life policy”.

9 DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size.

10 Life insurance industry refines Critical Illness definitions for clarity on intended scope of coverage in light of medical advances in recent years (29 August 2019). LIA Singapore. Available at: https://www.lia.org.sg/media/2163/media-release.pdf

11 Life insurance industry launches standard Pre-Authorisation Form to simplify the pre-authorisation application process for doctors (6 September 2019). LIA Singapore. Available at: https://www.lia.org.sg/media/2173/media-release.pdf

12 Updated, due to revisions made after release of Q2 results

13 Updated, due to revisions made after release of Q2 results

 

Life Insurance Association, Singapore (LIA Singapore)

Established in 1962, the Life Insurance Association, Singapore (LIA Singapore) is the not-for-profit trade body of life insurance product providers and life reinsurance providers based in Singapore and licensed by the Monetary Authority of Singapore (MAS).

 

Vision and Mission

The vision of member companies is to provide individuals with peace of mind and to promote a society where every person is prepared for life’s changing cycles and for those situations unforeseen.

They are committed to being a progressive life insurance industry by collectively enhancing consumer understanding, promoting industry best practices, and through the association fostering a spirit of collaboration and mutual respect with government and business leaders.

 

Values underpinning the association and its members

Unified

in our resolve to deliver innovative solutions where every individual’s needs are best met.

Professional

in the way we conduct ourselves and in the counsel we give.

Ethical 

in ensuring our policyholders’ interests are managed with utmost integrity.

Fair        

in how we strive to provide favourable outcomes to both our policyholders and shareholders.

Open & honest

in all that we do to build an environment of trust and transparency.

Proactive

in the steps we take to give our people the skills and knowledge to provide sound solutions at all times.

 

For more information, please contact:

Pauline Lim (Ms.)
Executive Director, LIA Singapore
Tel: +65 6438 8900 / +65 9648 6407
Email : [email protected]

Amanda Chong (Ms.)
Ogilvy Singapore
Tel : +65 6213 7781 / +65 8200 5363
 Email: [email protected]



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