Uptake of life insurance grew 29 per cent in Q1 2021 as consumers adapt to COVID-19 environment

11 May 2021

Strong popularity of single-premium products a key growth driver; significant increase in new policies purchased online.

The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January 2021 to March 2021 (1Q2021).

Singapore’s life insurance industry recorded a total of S$1.25 billion in weighted new business premiums1 for 1Q2021, a positive 29 per cent growth compared to 1Q2020, which was prior to the COVID-19 circuit breaker measures.

Mr Khor Hock Seng, President, LIA Singapore, said, “Despite the headwinds induced by COVID-19, the life insurance industry has seen continuous and promising growth. While the pandemic continues to pose challenges for our customers and organisations, it also prompted many to reconsider and better plan for their long-term financial and healthcare needs.”

“Life insurers in Singapore will be pro-active in supporting the community to better meet their protection needs, working closely with the government and relevant stakeholders to best manage the situation and fall-out caused by COVID-19.” 

Significant growth in number of policies purchased online

The number of new policies purchased online continues to increase to 88,565 in 1Q2021 compared to 4,662 in 1Q2020. This has been made possible as member companies press on to digitalise their processes from end to end. 

Significant uptake of single-premium products

Single-premium products recorded an 85 per cent quarter-on-quarter increase in weighted premiums amounting to S$541.6 million in total for 1Q2021.

a) Single-premium par and non-par products comprised 80 per cent of all single-premium purchases; single-premium linked products made up the remaining 20 per cent.

b) CPFIS-included products comprised 10 per cent; and cash-funded products accounted for the remaining 90 per cent. 

Stable uptake of annual premium products

Annual premium products recorded an increased uptake of five per cent from the same period last year, amounting to S$708.2 million in total weighted annual premiums.

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

Twenty thousand more Singaporeans and Permanent Residents were covered by IPs and riders as at 31 March 2021. 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 premiums2 for individual health insurance for 1Q2021 amounted to S$96.3 million. Overall, IPs and IP rider premiums accounted for 84 per cent (S$81.3 million) and the remaining 16 per cent (S$15.0 million) comprised other medical plans and riders.

Slowdown in uptake of retirement policies

In terms of policy count, there was a two per cent dip in the uptake of retirement policies in 1Q2021 compared to the same period last year. A total of 11,457 retirement policies3 were purchased as at 31 March 2021. 

Accounting for approximately eight per cent of total weighted premiums for 1Q2021, retirement policies totalled S$97.8 million in weighted premiums for the quarter.

OTHER HIGHLIGHTS FOR 1Q2021

Product classification

Par products accounted for 46 per cent of new sales while non-par products accounted for 30 per cent. Investment-linked products made up the remaining 24 per cent.  

Distribution channels

New business from the different channels is as follows:

Distribution Channel By Weighted Premium (%) By Number of Policies (%)
Tied Representatives 31.3 39.4
Bank Representatives 32.2 7.5
Financial Adviser Representatives4 27.4 26.2
Online Direct Channel5 5.1 21.6
Others (products sold without intermediaries, e.g. ElderShield) 4.0 5.3

Product license classification

As of 31 March 2021, insurers holding “Normal” licenses contributed 98 per cent of new sales, while “Defined Market Segments” (DMS) insurers6 made up the remaining two per cent of new sales for 1Q2021. 

Total group insurance premiums in-force

Total in-force annual premiums for group insurance business rose by 16 per cent compared to the same period a year ago, totalling S$1.62 billion. 

Manpower in the industry

Employment in the life industry remained stable compared to the corresponding period in 2020, with 40 new hires. This brings Singapore life insurance industry’s workforce to 8,708 employees as at 31 March 2021. In the same period, 14,945 representatives held exclusive contracts with companies that operate a tied-agency force. 

LOOKING FORWARD

Mr Khor Hock Seng, President, LIA Singapore, said, “Life insurers have identified two key priorities for the year ahead; increasing the adoption of sustainable investing and future-proofing our workforce.”

“As a Strategic Partner of the Green Finance Industry Taskforce (GFIT), the LIA will initially focus on capacity building for the insurance industry, in close collaboration with other insurance sectors.”

“With the digitalisation of insurance well underway, our imperative is to enable our workforce to adapt to these new digital tools. Working through the LIA as an industry, the Institute of Banking and Finance (IBF) has customised training for our staff in growth mindset, design thinking and innovation, to equip them to embrace the evolving nature of their jobs.”  

– End –

Note to Editor: More details of the life insurance industry results for 1Q2021 available at https://www.lia.org.sg/news-room/industry-performance/

In Summary

New Business Sales (Weighted Basis)

Comparison with Corresponding

Period

Jan  Mar 2021 
S$

Jan – Mar 2020
S$

Change
Single Premium 541.6 million 293.4 million 85%
  Linked 109.1 million 78.5 million 39%
  Non-linked 432.5 million 214.9 million 101%
Annual Premium 708.2 million 672.4 million 5%
Total 1,249.8 million 965.8 million

29%

Comparison with Last Quarter 

Jan  Mar 2021 
S$

Oct – Dec 2020
S$

Change
Single Premium 541.6 million 624.7 million -13%
  Linked 109.1 million 83.0 million 32%
  Non-linked 432.5 million 541.7 million -20%
Annual Premium 708.2 million 772.8 million -8%
Total 1,249.8 million 1,397.5 million

-11%

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.

2 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.

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

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

5 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”.

6 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

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]

Louise Lam (Ms.)
Ogilvy Singapore
Tel : +65 6213 6986 / +65 9739 9863
 Email: [email protected]



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