Life Insurance industry closes 2020 with a positive three per cent growth, compared to a year ago
09 Feb 2021
- Growth driven by increased consumer demand for short-term single premium policies.
- Industry employment rose by four per cent, bucking national trend.
The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January 2020 to December 2020 (YTD 4Q2020).
Singapore’s life insurance industry recorded a total of S$4.38 billion in weighted new business premiums1 for YTD 4Q2020, a positive three per cent growth, compared to 2019. There was a rebound in the second half of the year after the initial fallout from COVID-19 which affected policy uptake most significantly in the second quarter of the year.
Mr Khor Hock Seng, President, LIA Singapore said, “The foremost priority for life insurers this year is to ensure that individuals, families and companies continue to have their healthcare, financial, and service needs met as we continue to experience fallout from the global pandemic. We are working closely with the relevant government agencies to constantly review the situation and support national initiatives.”
Efforts by the industry to provide support for customers amid COVID-19 include:
- Providing complimentary COVID-19 coverage to Integrated Shield Plans (IPs) and IP rider policyholders2,
- Implementing two windows of Deferred Premium Payment (DPP) scheme3 to allow affected policyholders more time to pay their premiums,
- Pro-actively engaging policyholders to consider right-sizing policies on DPP with a holistic review of policy coverage and premium commitment to ensure sustainability going forward, and
- Extending IP coverage to COVID-19 vaccination complications resulting in hospitalisation4.
Tremendous growth in uptake of policies online
- Simple online purchasing process,
- Simple and easy to understand features,
- Short-term commitment period, especially appealing to consumers amid uncertain financial security, and
- Reasonable returns, which are attractive to consumers seeking safe assets amid a low interest rate environment and uncertain economy.
Single premium products continue to shine
Sales of single premium products recorded a 47 per cent year-on-year increase in weighted premiums amounting to S$1.84 billion in total for YTD 4Q2020.
a. Single premium par and non-par products comprised 80 per cent of all single-premium sales; single premium linked products made up the remaining 20 per cent
b. CPFIS-included products comprised 12 per cent; cash-funded products accounted for the remaining 88 per cent
Strong uptake of single premium products cushioned the decreased uptake of annual premium policies for the year.
Sales of annual premium products remain slow
Sales of annual premium products recorded a 15 per cent drop from the same period last year, amounting to S$2.55 billion in total weighted annual premiums.
Life insurance industry continues to expand its workforce
Integrated Shield Plans (IPs) remain a significant component of health insurance
33,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 31 December 2020. In total, 2.82 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 premiums5 for individual health insurance for YTD 4Q2020 amounted to S$377.7 million. Overall, IPs and IP rider premiums accounted for 88 per cent (S$331.2 million) and the remaining 12 per cent (S$46.5 million) comprised of other medical plans and riders.
Uptake of retirement policies continues to decrease
There was a 23 per cent dip in the uptake of retirement policies in YTD 4Q2020 compared to the same period last year. A total of 39,302 retirement policies6 were purchased as at 31 December 2020.
Accounting for approximately eight per cent of total weighted premiums for YTD 4Q2020, retirement policies totalled S$341.4 million in weighted premiums for the year.
OTHER HIGHLIGHTS FOR YTD 4Q2020
Par products accounted for 44 per cent of new sales while non-par products accounted for 36 per cent. Investment-linked products made up the remaining 20 per cent.
The contribution of new business by the different channels is as follows:
|Distribution Channel||By Weighted Premium (%)||By Number of Policies (%)|
|Financial Adviser Representatives7||26.7||24.7|
|Online Direct Channel8||4.1||14.2|
|Others (products sold without intermediaries, e.g. DPI, ElderShield)||4.0||7.6|
Product License Classification
As of 31 December 2020, insurers holding “Normal” licenses contributed for 98 per cent of new sales, while “Defined Market Segments” (DMS) insurers9 made up for the remaining two per cent of new sales for YTD 4Q2020.
Group Insurance: Total Annual Premiums In-Force
Total annual premiums in-force for group insurance business rose by nine per cent compared to the same period a year ago, totalling S$1.50 billion.
“In 2021, life insurers will continue rallying behind the government’s efforts to bring COVID-19 under control through mass vaccinations. All seven Integrated Shield Plan insurers have extended hospitalisation coverage to policyholders experiencing complications resulting from regulator-approved vaccines10.”
“Digitalisation remains a key focus for life insurers as demand for online services continues to grow exponentially. A Memorandum of Understanding11 was signed between the LIA and Singapore FinTech Association (SFA) in December 2020 to facilitate mutual synergy between the InsurTech, FinTech and life insurance industries, within the push to becoming a Smart Nation,” said Mr Khor Hock Seng, President, LIA Singapore.
– End –
Note to Editor: Details of the life insurance industry results of YTD 4Q2020 are available at https://www.lia.org.sg/news-room/industry-performance/
New Business Sales (Weighted Basis)
|Comparison with Corresponding Period||
Jan – Dec 2020
Jan – Dec 2019
|Single Premium||1,835.6 million||1,247.6 million||47%|
|Linked||365.4 million||237.3 million||54%|
|Non-linked||1,470.2 million||1,010.3 million||46%|
|Annual Premium||2,547.5 million||3,006.0 million||-15%|
|Total||4,383.1 million||4,253.6 million||3%|
|Comparison with Corresponding Quarter||
Oct – Dec 2020
Oct – Dec 2019
|Single Premium||624.7 million||358.4 million||74%|
|Linked||83.0 million||71.3 million||16%|
|Non-linked||541.7 million||287.1 million||89%|
|Annual Premium||772.8 million||856.5 million||-10%|
|Total||1,397.5 million||1,214.9 million||15%|
|Comparison with Last Quarter||
Oct – Dec 2020
Jul – Sep 2020
|Single Premium||624.7 million||587.9 million||6%|
|Linked||83.0 million||124.3 million||-33%|
|Non-linked||541.7 million||463.6 million||17%|
|Annual Premium||772.8 million||736.7 million||5%|
|Total||1,397.5 million||1,324.6 million||
1 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.
5 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.
6 These policies are designed to provide regular payouts during policyholders’ retirement years.
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.
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
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