The general insurance market in Singapore recorded an underwriting loss of S$28m ($19.4m) last year, compared to an underwriting profit of S$36m in 2018, according to the General Insurance Association of Singapore (GIA).
The main reason for the underwriting loss was a 12.2% rise in total claims to $159m.
This was the first underwriting loss for the sector as a whole for at least a decade. The association’s 2018 annual report shows that underwriting gains have been falling since 2015:
2014: S$392m profit
2015: S$310m profit
2016: S$258m profit
2017: S$107m profit
2018: S$ 36m profit
2019: S$ 28m loss
Top 5 segments
The top five segments, making up 70% of the non-life market, posted underwriting losses totalling $43.4m as is shown below:
Gross written premiums for the general insurance market grew by 7.6% to S$4.1bn in 2019.
The top five classes of business posted the following GWP:
Gross Written Premium (S$’000)
Motor & health
Overall, the motor insurance segment, which was the largest class of business, recorded S$1.12bn in gross written premiums for the financial year, a 1% increase compared to the previous year. In 2019, the motor insurance segment incurred a 7.6%, or S$41.3m, increase in total claims paid out, contributing to the overall underwriting loss of S$17.4m for the segment.
The year also witnessed a shift in vehicle ownership in Singapore. Vehicle population was at its highest since 2013, fuelled mainly by a spike in private-hire cars (PHCs). This meant that the sector was insuring a vehicle population with higher risk profiles as PHCs are driven more frequently on the road. This was also reflected in the total accident reports for the year, which increased by 1.4% from 2018.
Health insurance, now the second largest general insurance segment in Singapore, saw a narrowing of underwriting loss to S$11.2m in 2019, improving by approximately 75% from the underwriting loss of S$44.2m in 2018. 2019 also saw a continuation of the upward claims trend with an 8.1%, or S$22.6m, increase in total claims payout for policyholders requiring medical treatments. Gross written premiums increased to S$666.8m.
The Association undertook several key developments in 2019 to mitigate claims cost inflation and manage evolving risks. This includes launching the GIA Insurance Fraud Tip-off (GIFT) reward scheme to combat insurance fraud, starting developmental work on the new GIA Easy Accident Reporting System (GEARS), and advancing sector engagements with key stakeholders such as the Monetary Authority of Singapore and the Life Insurance Association, Singapore.
Yesterday, the association appointed a new management committee at its annual general meeting. It elected Craig Ellis as president and Christian Sandric as vice president.
Mr Ellis said,“The start of 2020 saw an unexpected turn of events – a new decade begins with an emergence of a new global risk. Threats of COVID-19 have unsettled the world and have sent businesses reeling from its impact. As a sector, we are determined to overcome this unprecedented challenge together and will be doubling up our efforts in supporting the community, our members, partners and all stakeholders. At the core of everything we do, we will ensure that general insurance protection remains accessible for everyone.
“Notwithstanding it all, one of the key focuses for GIA this year, is to leverage the success of our insurance fraud prevention initiatives to form a new Centralised Investigation Bureau. We are also well prepared to support recent regulatory developments such as the new Work Injury Compensation Act (WICA), and will be driving innovative changes for the sector through the newly formed Market Development Committee.”