Singapore’s life insurance industry recorded a total of S$4.38bn ($3.3bn) in weighted new business premiums in 2020, a positive 3% growth, compared to 2019, says the Life Insurance Association, Singapore (LIA Singapore) in a statement.
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, LIA president, 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.”
Tremendous growth in uptake of policies online
The uptake of new policies purchased online saw a significant increase to 206,679 in 2020 compared to 9,971 in 2019. Most of the policies purchased online were single premium products such as short-term non-par endowment plans, par whole life plans, and universal life plans.
Single premium products continue to shine
Sales of single premium products recorded a 47% year-on-year increase in weighted premiums amounting to S$1.84bn in total for 2020.
Single premium par and non-par products comprised 80% of all single-premium sales; single premium linked products made up the remaining 20%
Strong uptake of single premium products cushioned the decreased uptake of annual premium policies for the year.
Sales of annual premium products recorded a 15% drop from the last year, amounting to S$2.55bn in total weighted annual premiums.
Total new business premiums for individual health insurance for 2020 amounted to S$377.7m. Overall, IPs and IP rider premiums accounted for 88% (S$331.2m) and the remaining 12% (S$46.5m) comprised of other medical plans and riders.
Uptake of retirement policies continues to decrease
There was a 23% fall in the uptake of retirement policies in 2020 compared to the previous year. A total of 39,302 retirement policies were purchased as at 31 December 2020.
Accounting for approximately 8% of total weighted premiums for YTD 4Q2020, retirement policies totalled S$341.4m in weighted premiums for the year.
The following table shows New Business Sales (Weighted Basis) for 2020:
“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 vaccines.”
“Digitalisation remains a key focus for life insurers as demand for online services continues to grow exponentially. A Memorandum of Understanding 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.