Positive start for life insurance industry in 2016 with growth in single premium and annual premium business in the first quarter

Singapore, 10 May 2016

The Life Insurance Association Singapore (LIA Singapore) today announced industry results for the period January to March 2016 (1Q2016). Overall, the life industry achieved a total of $682.1 million in weighted new business premiums1 for the first quarter of 2016, a five per cent increase compared to the first quarter of 2015.

Compared to the same period in 2015, the industry also recorded:
a) a five per cent increase to S$466.2 million in weighted annual premiums; and
b) a six per cent increase to S$215.9 million in weighted single premiums, of which
    -  single premium par and non-par products comprised 79 per cent
    -  CPFIS-included products comprised 13 per cent

The total sum assured for new business rose strongly by 11 per cent, totalling S$22.1 billion as compared to the same period in 2015.

Direct Purchase Insurance (DPI) products saw steady growth, drawing S$730,000 in weighted premiums since its launch on 7 April 2015. 855 policies have been purchased to date.

DPIs are basic life insurance products sold without financial advice and can be purchased directly from customer service centres or websites of life insurance companies in Singapore.  

Dr. Khoo Kah Siang, President of LIA Singapore, said, “We are encouraged by the first quarter results which continued from strong growth seen in 2015. The life insurers have stepped up to the change in regulations and market demand well, and will continue to innovate to deliver life insurance solutions and services that meet the needs of consumers.

In our efforts to boost transparency and communication with the public, LIA Singapore will also be providing the quarterly industry performance results on our website.”

OTHER HIGHLIGHTS FOR 1Q2016

Total Sum Assured

New protection cover increased by 11 per cent to S$22.1 billion for the first quarter of 2016 compared to the same period in 2015.

Distribution Channels

The contribution of new business by the different channels of distribution remained consistent as follows:

Distribution channel By weighted premium (%) By number of policies (%)
Tied Representatives 36 56
Bank Representatives 43 15
Financial Adviser Representatives 17 13
Others (products sold without intermediaries, e.g. DPI, ElderShield) 4 16

Product Classification

Par products accounted for 59 per cent of new sales while non-par products accounted for 27 per cent. Investment-linked products made up the remaining 14 per cent.

Product License Classification

As at 31 March 2016, insurers holding “Normal” licenses contributed 97 per cent of new sales, while the “Defined Market Segments” (DMS) insurers2 made up the remaining three per cent.

Health Insurance

With effect from 1 January 2016, the MediShield Life premiums will be excluded from LIA statistics.

Under this revised basis, new health insurance premiums totalled S$47 million, of which S$38 million were from Integrated Plan (IP) premiums and IP riders, and the remaining S$9 million were from other Medical Plans and riders.

As at 31 March 2016, the total premium for Individual Health Insurance in-force business totalled S$1,271 million, with approximately one in two individuals in Singapore (2.84 million lives) insured.

Direct Purchase Insurance (DPI) Products

A total of 209 policies were sold and drew approximately S$180,000 of weighted new premiums. Eighty seven per cent of the new sales comprised regular premium term life policies. Eight hundred and fifty-five (855) policies have been purchased to date.

Term life policies provide insurance protection at affordable premiums, and can serve those seeking to provide basic protection for the family.

Claims Payout

As at 31 March 2016, the life insurance industry paid out S$1.51 billion to policyholders and beneficiaries. Of this amount, S$1.29 billion was for policies that matured. The remaining S$217 million was for death, critical illness or disability claims, which represented a 24 per cent increase from the same period in 2015.

Life insurance plays a key role in providing policyholders and their families with peace of mind, knowing that insurance payouts will alleviate the financial burdens arising from sickness, death, or simply, a long retirement.

Group insurance: Total annual premiums in-force

Total annual premiums in-force for group insurance business rose by six per cent compared with a year ago, amounting to S$982 million.

Assets

As at end December of 2015, the life insurance industry was managing assets3 of approximately S$159.5 billion, up five per cent compared with a year ago. Assets of non-investment linked business accounted for S$131.9 billion, while the remaining S$27.6 billion were assets held for investment-linked business.

Manpower in the Industry

As at 31 March 2016, a total of 6,503 office staff were employed by member companies of the LIA and 14,271 representatives held exclusive contracts with companies that operate a tied agency force.

LOOKING FORWARD

“With the launch of the Standard IP on 1 May 2016, we believe more Singaporeans will get medical insurance plans that meet their needs and are affordable at the same time. It continues to be LIA Singapore’s top priority in 2016 to work towards keeping health insurance affordable for everyone,” said Dr Khoo.

-End-

Note to Editor: Industry results of 1Q2016 are available at: www.lia.org.sg/industry/performance

In Summary

New Business Sales (Weighted Basis)

Comparison with Corresponding Period Jan Mar 2016
S$

Jan – Mar 2015
S$

Change
Single Premium 215.9 million 204.4 million 6%
  Linked 45.7 million 53.0 million -14%
  Non-linked 170.2 million 151.4 million 12%
Annual Premium 466.2 million 445.0 million 5%
Total 682.1 million 649.4 million 5%
Comparison with Last Quarter Jan Mar 2016
S$

Oct – Dec 2015
S$

Change
Single Premium 215.9 million 281.9 million -23%
  Linked 45.7 million 61.0 million -25%
  Non-linked 170.2 million 220.9 million -23%
Annual Premium 466.2 million 550.3 million -15%
Total 682.1 million 832.2 million -18%

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   DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size.

  Source: MAS