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Life insurance industry helps more individuals meet their protection and investment needs as industry continues to report steady growth in the third quarter of 2016
Approximately 10,000 more Singapore residents get additional health insurance coverage mostly through Integrated Shield Plans and riders
Singapore, 08 November 2016
The Life Insurance Association Singapore (LIA Singapore) today announced industry results for the period January to September 2016 (YTD 3Q2016).
Overall, the life insurance industry in Singapore continues to report steady progress with an eight percent increase in total weighted new business premiums1 for YTD 3Q2016 compared to the same period in 2015. Total weighted new business premiums amounted to S$2,331 million for the first three quarters of the year.
A new addition of data shows the uptake of products that are designed to provide regular payout to policyholders during retirement years, and the information will continue to be reported quarterly. Such plans accounted for approximately five per cent of the total weighted premiums for YTD 3Q2016. A total of 14,519 policies were sold, with approximately S$116 million of weighted new premiums recorded over the first three quarters of 2016.
"LIA Singapore is including the additional data to highlight the importance of planning adequately for retirement in a nation with one of the fastest ageing populations in the world. Individuals aged 65 and above are expected to number approximately 900,000 by 2030.2 The life insurance industry is well-placed to offer choice of solutions that provide a stream of income in the retirement years," said Dr Khoo Kah Siang, President, LIA Singapore.
Compared to YTD 3Q2015, the industry also recorded:
a) an 11 per cent increase to S$730.8 million in weighted single premiums:
- Single premium par and non-par products comprised 78 per cent, the balance 22 per cent were single premium linked products
- CPFIS-included products comprised 13 per cent; Cash-funded products took the remaining 87 per cent
b) a six per cent increase to S$1,600.1 million in weighted annual premium
The total sum assured for new business rose strongly by 15 per cent, totalling S$81 billion as compared to the same period in 2015 as the industry continues in its efforts to help individuals better meet their protection needs.
Approximately 10,000 more Singapore residents get additional health insurance coverage, mostly through Integrated Shield Plans and/or riders.
In all, new health insurance premiums3 totalled S$172 million for YTD 3Q2016, of which IP premiums and IP riders accounted for 85 per cent (S$146 million). The remaining S$26 million was contributed by other medical plans and riders. Approximately one in two individuals in Singapore (2.87 million lives) are covered by health insurance with total premiums amounting to S$1,367 million, as at 30 September 2016.
Dr Khoo added, "The continuing increase in the number of lives covered by IPs and IP riders show Singapore residents' growing appreciation of the necessity for health insurance and the choice of additional benefits provided by IP plans and IP riders.
As it remains a priority of IP insurers to continue providing choice and affordable coverage for all, we will study and further deliberate on recommendations of the Health Insurance Task Force (HITF) that are pertinent to industry.
In as much as life insurers need to play their part, unless collective and specific efforts are made by all the different parties, Singapore will not be able to effectively tackle escalating healthcare costs that are beyond the usual incremental increase, and therefore escalating health insurance claims."
Other key recommendations from the HITF include the publication of medical fee benchmark as well as IP plan design to include pre-authorisation to provide clarity to the policyholder-patient on the level of coverage they have for treatments before they proceed with any medical procedures. The purpose of these recommendations is to curb over-treatment and/or over-consumption which, in turn, are expected to mitigate the inflation of healthcare claims.
Following the move of Mr Philip Seah to a different role within Prudential Asia, Mr Patrick Teow, Chief Executive Officer of AIA Singapore, has been elected to act as his replacement as Deputy President of LIA Singapore4. The appointment is effective until the next Annual General Meeting scheduled for March 2017.
OTHER HIGHLIGHTS FOR YTD 3Q2016
Par products accounted for 53 per cent of new sales while non-par products accounted for 33 per cent. Investment-linked products made up the remaining 14 per cent.
The contribution of new business by the different channels of distribution remained consistent as follows:
|Distribution channel||By weighted premium (%)||By number of policies (%)|
|Financial Adviser Representatives||20||14|
|Others (products sold without intermediaries, e.g. DPI, ElderShield)||4||16|
Product License Classification
As at 30 September 2016, insurers holding "Normal" licenses contributed 97 per cent of new sales compared to 94 per cent in YTD 3Q2015. The "Defined Market Segments" (DMS) insurers5 made up the remaining three per cent of new sales for YTD 3Q2016.
As at 30 September 2016, the life insurance industry paid out S$4.52 billion to policyholders and beneficiaries. Of this amount, S$3.90 billion was for policies that matured. The remaining S$619 million was for death, critical illness or disability claims, which represented a 10 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 one per cent compared with a year ago, amounting to S$972 million.
As at end June of 2016, the life insurance industry was managing assets6 of approximately S$167.2 billion, up seven per cent compared with a year ago. Assets of non-investment linked business accounted for S$139.5 billion, while the remaining S$27.7 billion were assets held for investment-linked business.
Manpower in the Industry
As at 30 September 2016, 6,540 staff were employed by member companies and 14,275 representatives held exclusive contracts with companies that operate a tied agency force.
The life insurance industry is actively embracing 'disruption' technologies to enable purchasing and servicing touch points through digital platforms to meet the changing expectations of a more technologically savvy population. In tandem, life insurers are focusing efforts on skilling up the workforce to acquire specialised knowledge and expertise needed to drive and support such developments.
– End –
New Business Sales (Weighted Basis)
|Comparison with Corresponding Period||Jan – Sep 2016
Jan – Sep 2015
|Single Premium||730.8 million||658.9 million||11%|
|Linked||158.8 million||182.9 million||-13%|
|Non-linked||572.0 million||476.0 million||20%|
|Annual Premium||1,600.1 million||1,506.9 million||6%|
|Total||2,330.9 million||2,165.8 million||8%|
|Comparison with Corresponding Quarter||Jul – Sep 2016
Jul – Sep 2015
|Single Premium||232.8 million||271.1 million||-14%|
|Linked||61.2 million||60.6 million||1%|
|Non-linked||171.6 million||210.5 million||-19%|
|Annual Premium||575.4 million||541.9 million||6%|
|Total||808.2 million||813.0 million||-1%|
|Comparison with Last Quarter||Jul – Sep 2016
Apr – Jun 2016
|Single Premium||232.8 million||282.1 million||-17%|
|Linked||61.2 million||51.9 million||18%|
|Non-linked||171.6 million||230.2 million||-25%|
|Annual Premium||575.4 million||562.8 million||2%|
|Total||808.2 million||844.9 million||-4%|
Patrick Teow 刁和庆
Elected Deputy President of LIA Singapore in October 2016, Mr Patrick Teow works closely with the Association’s Management Committee and Secretariat focusing on building a more progressive life insurance industry by enhancing consumer understanding, promoting industry best practices and collaborating closely with regulators, partners and other relevant stakeholders.
Also the Chief Executive Officer of AIA Singapore, Mr Teow is responsible for overseeing and managing AIA's operations in the market from 1 September 2015.
Patrick joined AIA in July 2013 as Chief Executive Officer of AIA Group Agency Distribution. He has been driving the company’s success across multiple markets by boosting productivity levels and creating a strong Premier Agency culture focused on quality and professionalism.
Before making his move to AIA, Patrick spent close to 28 years at Prudential, having taken on the role of Regional Chief Agency Officer for Asia, EVP and Chief Distribution Officer- Prudential Singapore as well as Group Financial Services Director.
Patrick holds professional Chartered Life Underwriter and Chartered Financial Consultant qualifications.
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 Source: Ministry of Health. (19 March 2015). Speech by Mr Gan Kim Yong, Minister for Health, at the SG50 Scientific Conference on Ageing. Retrieved from https://www.moh.gov.sg/content/moh_web/home/pressRoom/speeches_d/2015/speech-by-mr-gan-kim-yong--minister-for-health--at-the-sg50-scie.html
3 With effect from 1 January 2016, the MediShield Life premiums has been excluded from LIA statistics.
4 Refer to Appendix for Mr. Patrick Teow’s biography.
5 DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size.
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