Life insurance sales show strong growth as consumers adapted to the pandemic.
In a statement issued yesterday by the Life Insurance Association Singapore (LIA Singapore), the life insurance market recorded S$2.68 billion ($1.97 billion) in weighted new business premiums for the first half of 2021. It shows a significant increase of 61% compared to the first half of the previous year.
In addition, they highlighted that the sales were down during the same time last year due to the restrictions of physical meetings due to Covid-19 circuit breaker measures.
The robustness of the life insurance industry in the first half of this year, according to Mr. Khor Hock Seng, president of LIA Singapore, shows a degree of stability in Singapore’s economy after the immediate effect of Covid-19 last year.
Mr. Khor added, “The growth in uptake of life insurance also seems to show that more people are placing greater importance on providing for their long-term financial and healthcare needs in the midst of an evolving pandemic environment.”
Singapore’s GDP, which fell by 5.4% last year, is projected to expand by 6% to 7% this year.
With the latest increase, below are the highlights of this significant trend for the first half of 2021.
Increase in Sales of Single Premium Products
Weighted premiums for single-premium policies increased by 106 percent year on year, totaling S$1.28 billion in 1H2021.
Single-premium par and non-par goods accounted for 84% of all single-premium purchases, with single-premium linked products accounting for 16%.
Cash-funded goods accounted for 92%, and CPFIS -included products accounting for the remaining 8%.
Rising Value in Annual-premium Products
Annual-premium plans had a 35% rise in uptake compared to the same period in the previous year, totaling S$1.40 billion in weighted annual premiums.
More Policies Purchased Online
The number of new policies bought online continues to rise, reaching 203,351 in the first half of 2021, up from 32,952 in the first half of 2020. These are internet purchases made by consumers without the assistance of financial advisers.
Integrated Shield Plans (IPs) as Essential Component of Health Insurance
As of 30 June 2021, IPs and riders covered 43,300 additional Singaporeans and PRs. IPs and riders, which offer coverage in addition to MediShield Life, safeguard 2.85 million lives – about 70% of Singaporeans.
Individual health insurance new business premiums were S$176.8 million in the first half of 2021. Overall, IPs and IP rider premiums accounted for 82 percent (S$144.7m), with other medical plans and riders accounting for the remaining 18 percent (S$32.1m).
Increase in the Uptake of Retirement Policies
Regarding policy count, there was about a 34% increase in the uptake of retirement plans in the first half of the year than the previous year. As of 30 June 2021, a total of 22,137 retirement plans have been bought. Retirement insurance accounted for about 7% of total weighted premiums for 1H2021, totaling S$198.2 million in weighted premiums.
Rising Total Group Insurance Premiums in-force
Compared to last year’s, total in-force annual premiums for group insurance business increased by 20% to S$1.75 billion in 1H2021.
Mr. Khor said that the life insurance sector would continue to prioritise achieving our sustainability (ESG) pledges and workforce transformation objectives for the following year.
“The LIA, as a strategic partner of the Green Finance Industry Taskforce, is working together with the general insurance and reinsurance sectors to build the industry’s capacity for the progressive adoption of local best practices and international standards. We are also working on industry initiatives to future-proof our workforce as technology and digital tools impact the way we do our jobs,” he added.