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Industry Performance
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Date Published: 07.11.2019
Life Insurance industry insures S$1.3 billion more in sum assured for policyholders despite a 4 per cent dip in sales
Employment in the industry rose by 3.6 per cent amid increased overall unemployment rate1 The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January to September 2019 (YTD 3Q2019). Singapore’s life insurance industry recorded a total of S$3 billion in weighted new business premiums2 for YTD 3Q2019, a four per cent decrease from the corresponding period in 2018, in line with the nation’s economic performance3. Against this backdrop, total sum assured for new business continued to increase by one per cent (approximately S$1.3 billion) year-on-year, amounting to S$103.1 billion. “The ongoing economic volatility has inevitably impacted the first three quarters’ performance for the life insurance industry. However, the Association and member companies remain steadfast in our efforts and commitment to provide better protection for customers – reflected by the increased total sum assured. This is especially crucial at a time when there is a growing cohort in the population of older people and increasing rates of chronic medical conditions among both the young and old,” said Mr Khor Hock Seng, President of LIA Singapore. Steady growth for annual premium products, narrowing protection gaps Annual premium policies recorded a four per cent increase from the same period last year, amounting to S$2.1 billion in total weighted annual premiums – mainly attributed to the increase in uptake of participating plans, meeting the protection and saving needs of consumers. Single premium products continue to drop, primarily due to global market volatility4 A 20 per cent decline was recorded on a year-on-year basis for single premium products. For YTD 3Q2019, weighted single premiums amounted to S$889.2 million, of which: a) Single premium par and non-par products comprised 81 per cent; Single premium linked products took the remaining 19 per cent b) CPFIS-included products comprised 10 per cent; Cash-funded products took the remaining 90 per cent Increased uptake of retirement policies The industry recorded a 57 per cent increase in the uptake of retirement policies5 in YTD 3Q2019 compared to a year ago. A total of 38,622 policies were purchased as at 30 September 2019, a significant 14,012 more policies compared to the same period in 2018. Making up about 12 per cent of total weighted premiums for YTD 3Q2019, retirement policies totalled S$356 million in weighted premiums for the first nine months of 2019. Integrated Shield Plans (IPs) remain a significant component of health insurance 53,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 30 September 2019. 2.77 million lives – approximately 69 per cent of Singapore residents – are protected by IPs and riders, which provide coverage on top of MediShield Life. Total new business premiums6 for individual health insurance for YTD 3Q2019 amounted to S$342.3 million. Overall, IPs and IP rider premiums accounted for 90 per cent (S$307.5 million) and the remaining 10 per cent (S$34.8 million) comprised other medical plans and riders. Life insurance industry continues to expand its workforce Employment in the life industry rose by 3.6 per cent as a result of 296 new hires, compared to the corresponding period in 2018, to reach a workforce of 8,444 employees, as of 30 September 2019. Recruitment is focused on data analytics, cyber security, and various insurance business functions as life insurers pursue digital innovation. 14,892 representatives held exclusive contracts with companies that operate a tied agency force as at 30 September 2019, a slight one per cent decrease compared to the corresponding period in 2018. The role of financial advisory representatives in Singapore remains essential in giving personalised advisory based on each individual’s circumstances and protection needs. OTHER HIGHLIGHTS FOR YTD 3Q2019 Product Classification Par products accounted for 50 per cent of new sales while non-par products accounted for 34 per cent. Investment-linked products made up the remaining 16 per cent. Distribution Channels The contribution of new business by the different channels is as follows: Distribution Channel By Weighted Premium (%) By Number of Policies (%) Tied Representatives 34.3 50.0 Bank Representatives 37.1 11.7 Financial Adviser Representatives7 23.3 22.2 Online Direct Channel8 0.2 0.5 Others (products sold without intermediaries, e. g. DPI, ElderShield) 5.1 15.6 Product License Classification As of 30 September 2019, insurers holding “Normal” licenses contributed 98 per cent of new sales, while the “Defined Market Segments” (DMS) insurers9 made up the remaining two per cent of new sales for YTD 3Q2019. Group Insurance: Total Annual Premiums In-Force Total annual premiums in-force for group insurance business rose by 16 per cent compared to the same period a year ago, amounting to S$1.3 billion. Assets The life insurance industry managed assets of some S$229.3 billion, up 12 per cent compared with a year ago. Assets of non-investment linked business accounted for S$192.2 billion, while the remaining S$37.1 billion were assets held for investment-linked business. LOOKING FORWARD The life insurance industry will continue to focus efforts on helping consumers narrow their protection gaps, despite the uncertain global economic environment. On top of ongoing education efforts, consumers can look forward to the upcoming official launch of the life insurance calculator, which will be hosted on the LIA Singapore website. The digital calculator aims to help consumers gain a better understanding of their financial protection needs. Other recent initiatives aimed at enhancing policyholders’ claims experience include: Updates to Critical Illnesses (CI) definitions to clearly reflect intent of coverage, as a result of medical advancements and health trends in the past five years.10 Launch of the standard Pre-Authorisation Form to simplify the application process for doctors and bring about consistency of practice among all IP insurers.11 – End – Note to Editor: Industry results of YTD 3Q2019 are available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Sep 2019S$ Jan – Sep 2018 S$ Change Single Premium 889.2 million 1,108.3 million -20% Linked 166.1 million 308.1 million -46% Non-linked 723.1 million 800.2 million -10% Annual Premium 2,149.5 million 2,061.4 million 4% Total 3,038.7 million 3,169.7 million -4% Comparison with Corresponding Quarter Jul – Sep 2019 S$ Jul – Sep 2018S$ Change Single Premium 357.3 million 430.5 million -17% Linked 63.1 million 111.0 million -43% Non-linked 294.2 million 319.5 million -8% Annual Premium 767.1 million 719.8 million 7% Total 1,124.4 million 1,150.3 million -2% Comparison with Last Quarter Jul – Sep 2019 S$ Apr – Jun 2019S$ Change Single Premium 357.3 million 307.2 million 16% Linked 63.1 million 54.6 million 16% Non-linked 294.2 million 252.6 million 16% Annual Premium 767.1 million 729.3 million12 5% Total 1,124.4 million 1,036.5 million13 8% 1 Strong S'pore employment growth in Q3 but highest jobless rate in nearly a decade: MOM data (24 October 2019). TODAY. Available at: https://www. todayonline. com/singapore/new-spore-labour-data-shows-strong-employment-growth-highest-jobless-rate-nearly-decade 2 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. 3 Singapore’s GDP Grew by 0.1 Per Cent in the Third Quarter of 2019 (14 October 2019). Ministry of Trade and Industry Singapore. Available at: https://www. mti. gov. sg/-/media/MTI/Newsroom/Press-Releases/2019/10/Adv_Est3Q19. pdf 4 Singapore economy likely to stay listless over next 18 months (31 October 2019). The New Paper. Available at: https://www. tnp. sg/news/business/singapore-economy-likely-stay-listless-over-next-18-months 5 These policies are designed to provide regular payouts during policyholders’ retirement years. 6 With effect from 1 January 2016, the MediShield Life premiums have been excluded from LIA statistics. New Business premiums refer to the premium due to the new business sold in the year, as well as incremental premiums from any repricing of plans, and change in age-band of the insureds. 7 Financial Adviser (FA) Representatives include representatives of “related FA firms”. A related FA firm is a wholly-owned subsidiary of an insurance company. 8 Online Direct Channel is a new data point from January 2019, and it refers to “any web portal or application in the internet created, developed and maintained or operated by a life insurer, on which a client may purchase a life policy”. 9 DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size. 10 Life insurance industry refines Critical Illness definitions for clarity on intended scope of coverage in light of medical advances in recent years (29 August 2019). LIA Singapore. Available at: https://www. lia. org. sg/media/2163/media-release. pdf 11 Life insurance industry launches standard Pre-Authorisation Form to simplify the pre-authorisation application process for doctors (6 September 2019). LIA Singapore. Available at: https://www. lia. org. sg/media/2173/media-release. pdf 12 Updated, due to revisions made after release of Q2 results 13 Updated, due to revisions made after release of Q2 results Life Insurance Association, Singapore (LIA Singapore) Established in 1962, the Life Insurance Association, Singapore (LIA Singapore) is the not-for-profit trade body of life insurance product providers and life reinsurance providers based in Singapore and licensed by the Monetary Authority of Singapore (MAS). Vision and Mission The vision of member companies is to provide individuals with peace of mind and to promote a society where every person is prepared for life’s changing cycles and for those situations unforeseen. They are committed to being a progressive life insurance industry by collectively enhancing consumer understanding, promoting industry best practices, and through the association fostering a spirit of collaboration and mutual respect with government and business leaders. Values underpinning the association and its members Unified in our resolve to deliver innovative solutions where every individual’s needs are best met. Professional in the way we conduct ourselves and in the counsel we give. Ethical in ensuring our policyholders’ interests are managed with utmost integrity. Fair in how we strive to provide favourable outcomes to both our policyholders and shareholders. Open & honest in all that we do to build an environment of trust and transparency. Proactive in the steps we take to give our people the skills and knowledge to provide sound solutions at all times. For more information, please contact: Pauline Lim (Ms. )Executive Director, LIA SingaporeTel: +65 6438 8900 / +65 9648 6407Email : pauline. lim@lia. org. sg Amanda Chong (Ms. )Ogilvy SingaporeTel : +65 6213 7781 / +65 8200 5363 Email: amanda. chong@ogilvy. com
News Room -
Industry Performance
Date Published: 06.08.2019
Annual premium business continues to be a pillar of growth despite overall dip amid subdued economy
Protection gap calculator to be launched in second half of year as part of long-term efforts to bridge Singapore’s Mortality and Critical Illness (CI) protection gaps The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January to June 2019 (1H2019). Singapore’s life insurance industry recorded a total of S$1.97 billion in weighted new business premiums1 for 1H2019, a two per cent decrease from the corresponding period in 2018, in the midst of the nation’s slowing second quarter growth2. Stable uptake of annual premium products focused on long-term protection Annual premium policies recorded a seven per cent increase from the same period last year, amounting to S$1.44 billion in total weighted annual premiums. The steady growth augurs well in helping to narrow the protection gaps in Singapore. Decrease in uptake of single premium products due to subdued economy Impacted by global market uncertainty and economic slowdown3, the uptake of single premium policies continued on a downturn from the previous quarter. On a year-on-year basis, a 22 per cent decline was recorded. For 1H2019, weighted single premiums amounted to S$531.9 million, of which: a) Single premium par and non-par products comprised 81 per cent; Single premium linked products took the remaining 19 per cent b) CPFIS-included products comprised nine per cent; Cash-funded products took the remaining 91 per cent Retirement policies continue on an upward trend By policy count, the industry recorded a 78 per cent increase in the uptake of retirement policies in 1H2019 compared to a year ago. These policies are designed to provide regular payouts during policyholders’ retirement years. A total of 25,757 policies were purchased as at 30 June 2019, a significant 11,252 more policies compared to the previous year in which 14,505 policies were purchased. Making up about 12 per cent of total weighted premiums for 1H2019, retirement policies totalled S$236 million in weighted premiums for the first six months of 2019. Retirement policies accounted for only six per cent of total weighted premiums in 1H2018. Integrated Shield Plans (IPs) remain a significant component of health insurance 60,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 30 June 2019. 2.76 million lives - approximately 68 per cent of Singapore residents - are protected by IPs and riders, which provide coverage on top of MediShield Life. Total new business premiums4 for individual health insurance for 1H2019 amounted to S$221.4 million. Overall, IPs and IP rider premiums accounted for 89 per cent (S$197.3 million) and the remaining 11 per cent (S$24.1 million) comprised other medical plans and riders. Talent pool continues to expand, meeting consumers’ advisory needs and supporting digital transformation The life insurance industry added 611 hires last year to reach a workforce of 8,282 employees as at 30 June 2019. Recruitment continued to be focused on data analytics, cyber security, customer service and marketing as life insurers pursue digital innovation and operations. 15,117 representatives held exclusive contracts with companies that operate a tied agency force as at 30 June 2019, 352 more than the corresponding period in 2018. The role of financial advisory representatives in Singapore remains essential in giving personalised advisory based on each individual’s circumstances and protection needs. Protection Gap Study (PGS) qualitative findings Following the quantitative PGS which revealed that people in Singapore have a mortality protection gap of 20 per cent and critical illness (CI) protection gap of 80 per cent, LIA Singapore embarked on a qualitative study to deep dive and better understand the barriers to bridging these protection gaps. Findings include: Types of protection gaps Mortality CI Reasons to why people are not having their protection needs met Cash savings for protection: People prefer liquidity (savings) to insurance (protection) Intangible and long-term: People perceive insurance premium payments as a loss rather than a gain of insurance coverage Social safety nets: In general, people have expectations that others, such as family or the government, will be able to provide help and support Financial (over-)confidence: People perceive themselves as financially savvy Wider financial context: Insurance is often not a priority for many, and has to compete with many other purchase decisions Consumer trust: People are cautious about seeking insurance because of experiences and perceptions about the industry “Our qualitative study findings revealed that there are several perception barriers that are preventing people from getting their protection needs met. Through ongoing public education efforts as well as the upcoming digital protection calculator, we seek to help individuals here understand the importance of taking a long-term view and having their protection needs adequately met, so that they and their loved ones can have peace of mind. Individual life insurers here will also continue to introduce more innovative and accessible protection policies, helping to bridge the protection gaps and contributing to a more resilient Singapore,” said Mr Khor Hock Seng, President of LIA Singapore. OTHER HIGHLIGHTS FOR 1H2019 Product Classification Par products accounted for 53 per cent of new sales while non-par products accounted for 31 per cent. Investment-linked products made up the remaining 16 per cent. Distribution Channels The contribution of new business by the different channels is as follows: Distribution Channel By Weighted Premium (%) By Number of Policies (%) Tied Representatives 33.7 51.4 Bank Representatives 38.8 12.2 Financial Adviser Representatives 22.4 21.3 Online Direct Channel5 0.2 0.5 Others (products sold without intermediaries, e. g. DPI, ElderShield) 4.9 14.6 Product License Classification As at 30 June 2019, insurers holding “Normal” licenses contributed 98 per cent of new sales, while the “Defined Market Segments” (DMS) insurers6 made up the remaining two per cent of new sales for 1H2019. Total Sum Assured There was a year-on-year decrease of total sum assured for new business of two per cent, amounting to S$64.9 billion. Group Insurance: Total Annual Premiums In-Force Total annual premiums in-force for group insurance business rose by 14 per cent compared to the same period a year ago, amounting to S$1.3 billion. Assets Contributing to Singapore’s position as a leading global financial centre7, the life insurance industry managed assets of some S$221.6 billion, up 10 per cent compared with a year ago. Assets of non-investment linked business accounted for S$185.0 billion, while the remaining S$36.6 billion were assets held for investment-linked business. Looking Forward The life insurance industry maintains a conservative outlook for the rest of the year, against the backdrop of an uncertain global and local economy. The Association will continue efforts that support Singapore’s progress, particularly in workforce transformation, driving innovations to support industry growth, and bridging the mortality and CI protection gaps. – End – Note to Editor: Industry results of 1H2019 are available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Jun 2019S$ Jan – Jun 2018 S$ Change Single Premium 531.9 million 677.7 million -22% Linked 103.0 million 197.1 million -48% Non-linked 428.9 million 480.6 million -11% Annual Premium 1,440.1 million 1,341.7 million 7% Total 1,972.0 million 2,019.4 million -2% Comparison with Corresponding Quarter Apr – Jun 2019S$ Apr – Jun 2018S$ Change Single Premium 307.2 million 395.4 million -22% Linked 54.6 million 97.7 million -44% Non-linked 252.6 million 297.7 million -15% Annual Premium 759.6 million 696.4 million 9% Total 1,066.8 million 1,091.8 million -2% Comparison with Last Quarter Apr – Jun 2019S$ Apr – Mar 2019S$ Change Single Premium 307.2 million 224.7 million 37% Linked 54.6 million 48.3 million 13% Non-linked 252.6 million 176.4 million 43% Annual Premium 759.6 million 680.5 million8 12% Total 1,066.8 million 905.2 million9 12% 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 Singapore growth forecast risks sharper downgrade as Q2 GDP scrapes in at 0.1% (12 July 2019). The Business Times. Available at: https://www. businesstimes. com. sg/government-economy/singapore-growth-forecast-risks-sharper-downgrade-as-q2-gdp-scrapes-in-at-01 3 Singapore economic growth to slow down amid weaker global prospects: MAS (26 April 2019). Yahoo Finance. Available at: https://sg. finance. yahoo. com/news/singapore-economic-growth-slow-amid-weaker-global-prospects-mas-063313954. html 4 With effect from 1 January 2016, the MediShield Life premiums have been excluded from LIA statistics. New Business premiums refer to the premium due to the new business sold in the year, as well as incremental premiums from any repricing of plans, and change in age-band of the insureds. 5 Online Direct Channel is a new data point from January 2019, and it refers to “any web portal or application in the internet created, developed and maintained or operated by a life insurer, on which a client may purchase a life policy”. 6 DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size. 7 Singapore and Hong Kong remain among top global financial centres (15 September 2018). Insurance Business Asia. Available at: https://www. insurancebusinessmag. com/asia/news/breaking-news/singapore-and-hong-kong-remain-among-top-global-financial-centres-111368. aspx 8 Updated, due to revisions made after release of Q1 results 9 Updated, due to revisions made after release of Q1 results Life Insurance Association, Singapore (LIA Singapore) Established in 1962, the Life Insurance Association, Singapore (LIA Singapore) is the not-for-profit trade body of life insurance product providers and life reinsurance providers based in Singapore and licensed by the Monetary Authority of Singapore (MAS). Vision and Mission The vision of member companies is to provide individuals with peace of mind and to promote a society where every person is prepared for life’s changing cycles and for those situations unforeseen. They are committed to being a progressive life insurance industry by collectively enhancing consumer understanding, promoting industry best practices, and through the association fostering a spirit of collaboration and mutual respect with government and business leaders. Values underpinning the association and its members Unified in our resolve to deliver innovative solutions where every individual’s needs are best met. Professional in the way we conduct ourselves and in the counsel we give. Ethical in ensuring our policyholders’ interests are managed with utmost integrity. Fair in how we strive to provide favourable outcomes to both our policyholders and shareholders. Open & honest in all that we do to build an environment of trust and transparency. Proactive in the steps we take to give our people the skills and knowledge to provide sound solutions at all times. For more information, please contact: Pauline Lim (Ms. )Executive Director, LIA SingaporeTel: +65 6438 8900 / +65 9648 6407Email : pauline. lim@lia. org. sg Amanda Chong (Ms. )Ogilvy SingaporeTel : +65 6213 7781 / +65 8200 5363 Email: amanda. chong@ogilvy. com
News Room -
Industry Performance
Date Published: 09.05.2019
Life insurance industry records modest one per cent growth for the first quarter of 2019
The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January to March 2019 (1Q2019). Singapore’s life insurance industry recorded a total of S$937.2 million in weighted new business premiums1 for 1Q2019, a one per cent growth from the same period in 2018, in line with the nation's growth outlook for the quarter2. Sustained uptake of annual premium products mitigates decreasing uptake of single premium products There was continued steady increase in the uptake of annual premium policies in the first quarter, which rose by 11 per cent from the corresponding period in 2018, amounting to S$712.5 million in total weighted annual premiums. The industry’s uptake of single premium policies recorded a 20 per cent decline year-on-year, primarily due to subdued global and local economic growth3. For 1Q2019, weighted single premiums amounted to S$224.7 million, of which: a) Single premium par and non-par products comprised 78 per cent; Single premium linked products took the remaining 22 per cent b) CPFIS-included products comprised 10 per cent; Cash-funded products took the remaining 90 per cent Uptake of CPFIS-included products reduced this quarter, following the phased reduction of sales charge and wrap fees. Announced in March last year, the first phase came into effect in October 2018, with the second phase to take effect in October 20204. Continued steady increase in uptake of retirement policies By policy count, the industry recorded an 84 per cent increase in the uptake of retirement policies in 1Q2019. These policies are designed to provide regular payouts during policyholders’ retirement years. 12,213 policies were purchased, a significant 5,582 more policies compared to the previous year in which 6,631 policies were bought as at end March 2018. This also continues from last quarter’s year-on-year 48 per cent increase in the uptake of such policies with a total of 38,120 policies purchased in YTD 4Q20185. Making up about 12 per cent of total weighted premiums for 1Q2019, retirement policies totalled S$109 million weighted premiums for this quarter. Integrated Shield Plans (IPs) are still a significant component of health insurance 62,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 31 March 2019. 2.74 million lives - approximately 68 per cent of Singapore residents - are now protected by IPs and riders, which provide coverage on top of MediShield Life. Total new business premiums6 for individual health insurance for 1Q2019 amounted to S$97.3 million. Integrated Shield Plans (IPs) and IP rider premiums accounted for 86 per cent (S$83.8 million) and the remaining 14 per cent (S$13.5 million) comprised other medical plans and riders. Industry’s digital transformation supported by expanding talent pool The life insurance industry added 715 hires last year to reach a workforce of 8,309 employees as at 31 March 2019 with recruitment concentrated in areas of data analytics, cyber security, customer service and marketing as life insurers pursue digital innovation and business expansion. The role of financial advisory representatives in Singapore remains essential, giving counsel and customising recommendations based on each individual’s circumstances and protection needs. 15,384 representatives held exclusive contracts with companies that operate a tied agency force as at 31 March 2019, 567 more than the corresponding 14,817 in 2018. “Talent transformation is a top priority for the life industry in these immediate years, and we will reference insights from the recent study on manpower in the financial services sector jointly commissioned by the Institute of Banking and Finance (IBF) and the Monetary Authority of Singapore (MAS)7 to develop key initiatives. Our workforce needs to acquire new tech skills and new ways of doing their jobs, to transform how life insurance companies interact with consumers and serve customers” said Mr Khor Hock Seng, President of LIA Singapore. Upcoming release of Protection Gap Study (PGS) qualitative findings The industry recently completed the qualitative research of the PGS, where five consumer segments were identified based on their wants, motivations, considerations and challenges. More details will be shared in the first half of the year. OTHER HIGHLIGHTS FOR 1Q2019 Product Classification Par products accounted for 56 per cent of new sales while non-par products accounted for 26 per cent. Investment-linked products made up the remaining 18 per cent. Distribution Channels The contribution of new business by the different channels is as follows: Distribution Channel By Weighted Premium (%) By Number of Policies (%) Tied Representatives 32.2 52.4 Bank Representatives 40.6 13.3 Financial Adviser Representatives 22.3 20.0 Online Direct Channel 0.1 0.5 Others (products sold without intermediaries, e. g. DPI, ElderShield) 4.8 13.8 From 1Q2019, a new data point will be included, namely, Online Direct Channel, which refers to “any web portal or application in the internet created, developed and maintained or operated by a life insurer, on which a client may purchase a life policy”. Product License Classification As at 31 March 2019, insurers holding “Normal” licenses contributed 98 per cent of new sales, while the “Defined Market Segments” (DMS) insurers8 made up the remaining two per cent of new sales for 1Q2019. Total Sum Assured There was a quarter-on-quarter decrease of total sum assured for new business of four per cent, amounting to S$28.9 billion. Group Insurance: Total Annual Premiums In-Force Total annual premiums in-force for group insurance business rose by 13 per cent compared to the same period a year ago, amounting to S$1.25 billion. Assets Contributing to Singapore’s position as a leading global financial centre9, the life insurance industry managed assets of some S$209.4 billion, up three per cent compared with a year ago. Assets of non-investment linked business accounted for S$175.5 billion, while the remaining S$33.9 billion were assets held for investment-linked business. Looking Forward A season of gentler growth presents a window of opportunity for the industry to strengthen deep expertise and build up new capacities to better serve consumers and bridge their protection gaps, by: Transforming the workforce for the future, working closely with relevant parties to attract talent and upskill our current workforce; Driving innovation to demystify life insurance, and using advanced technologies to make life insurance products more accessible; and Enhancing public education to help bridge the protection gap. – End – Note to Editor: Industry results of YTD 1Q2019 are available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Mar 2019S$ Jan – Mar 2018S$ Change Single Premium 224.7 million 282.3 million -20% Linked 48.3 million 99.3 million -51% Non-linked 176.4 million 183.0 million -4% Annual Premium 712.5 million 642.8 million 11% Total 937.2 million 925.1 million 1% Comparison with Last Quarter Jan – Mar 2019S$ Oct – Dec 2018S$ Change Single Premium 224.7 million 308.2 million -27% Linked 48.3 million 62.1 million -22% Non-linked 176.4 million 246.1 million -28% Annual Premium 712.5 million 761.1 million -6% Total 937.2 million 1,069.3 million -12% 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 Steady labour market in Q1 despite slowdown (27 April 2019). The Straits Times. Available at: https://www. straitstimes. com/singapore/manpower/steady-labour-market-in-q1-despite-slowdown 3 Singapore economic growth to slow down amid weaker global prospects: MAS (26 April 2019). Yahoo Finance. Available at: https://sg. finance. yahoo. com/news/singapore-economic-growth-slow-amid-weaker-global-prospects-mas-063313954. html 4 Second phase of CPFIS fee cuts deferred to Oct 1 next year (12 March 2019). The Straits Times. Available at: https://www. straitstimes. com/business/economy/second-phase-of-cpfis-fee-cuts-deferred-to-oct-1-next-year 5 Life insurance industry recorded four per cent growth in 2018 (12 February 2019). LIA Singapore. Available at: https://www. lia. org. sg/news-room/industry-performance/2019/life-insurance-industry-recorded-four-per-cent-growth-in-2018/ 6 With effect from 1 January 2016, the MediShield Life premiums have been excluded from LIA statistics. New Business premiums refer to the premium due to the new business sold in the year, as well as incremental premiums from any repricing of plans, and change in age-band of the insureds. 7 IBF-MAS study identifies skills for more competitive financial sector workforce (23 April 2019). Available at: https://www. ibf. org. sg/newsroom/Lists/Press-releases/Attachments/48/NewsRoomAttachment_636916572446336553. pdf 8 DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size. 9 Singapore and Hong Kong remain among top global financial centres (15 September 2018). Insurance Business Asia. Available at: https://www. insurancebusinessmag. com/asia/news/breaking-news/singapore-and-hong-kong-remain-among-top-global-financial-centres-111368. aspx Life Insurance Association, Singapore (LIA Singapore) Established in 1962, the Life Insurance Association, Singapore (LIA Singapore) is the not-for-profit trade body of life insurance product providers and life reinsurance providers based in Singapore and licensed by the Monetary Authority of Singapore (MAS). Vision and Mission The vision of member companies is to provide individuals with peace of mind and to promote a society where every person is prepared for life’s changing cycles and for those situations unforeseen. They are committed to being a progressive life insurance industry by collectively enhancing consumer understanding, promoting industry best practices, and through the association fostering a spirit of collaboration and mutual respect with government and business leaders. Values underpinning the association and its members Unified in our resolve to deliver innovative solutions where every individual’s needs are best met. Professional in the way we conduct ourselves and in the counsel we give. Ethical in ensuring our policyholders’ interests are managed with utmost integrity. Fair in how we strive to provide favourable outcomes to both our policyholders and shareholders. Open & honest in all that we do to build an environment of trust and transparency. Proactive in the steps we take to give our people the skills and knowledge to provide sound solutions at all times. For more information, please contact: Pauline Lim (Ms. )Executive Director, LIA SingaporeTel: +65 6438 8900 / +65 9648 6407Email : pauline. lim@lia. org. sg Amanda Chong (Ms. )Ogilvy SingaporeTel : +65 6213 7781 / +65 8200 5363 Email: amanda. chong@ogilvy. com
News Room -
Industry Performance
Date Published: 12.02.2019
Life Insurance industry recorded four per cent growth in 2018
Annual premium business undergirds overall growth for the year. The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January to December 2018 (YTD 4Q2018). Singapore's life insurance industry recorded growth of four per cent in weighted new business premiums1 compared to the same period in 2017. This amounted to S$4.23 billion for YTD 4Q2018. Sustained sales of annual premium products The continued growth is attributed primarily to the continued uptake and stable performance of annual premium policies which accounted for a total weighted annual premiums of S$2.82 billion for YTD 4Q2018. This reflects an increase of seven per cent from the corresponding period in 2017. Dip in sales of single premium plans The combination of turbulent markets late last year combined with regulatory requirement to reduce the sales charge for purchases of CPF Investment Scheme (CPFIS) products contributed to a three per cent dip in the uptake of single premium plans compared to YTD 4Q2017. Weighted single premiums amounted to S$1.42 billion for the year of which: a) Single premium par and non-par products comprised 74 per cent; Single premium linked products took the remaining 26 per cent b) CPFIS-included products comprised 16 per cent; Cash-funded products took the remaining 84 per cent Changes to the CPFIS significantly impacted the last quarter of 2018 which saw single premium CPFIS-included products recording S$29 million in weighted premiums, a decline of 62 per cent compared to the previous quarter. This follows from the Government announcement made in March 20182 on the removal of sales charges for products offered under CPFIS. Taking effect on 1 October 2018, sales charges for purchases of CPF Investment Scheme (CPFIS) products were halved from three per cent to 1.5 per cent. Sales charges will be removed entirely from 1 October 2019. These adjustments are being introduced to reduce the cost of investment for CPFIS members, as well as target the scheme to members with knowledge and time to invest, and are prepared to take investment risk, according to the statement made in Parliament. Continued demand for protection products and health coverage Life insurers continued to make progress in supporting individuals in Singapore bridge their protection gap with annual increase of total sum assured for new business achieving year-on-year growth of seven per cent to reach close to S$140 billion in YTD 4Q2018. Integrated Shield Plans (IPs) continued to be a significant aspect of life insurance in Singapore. IPs and IP rider premiums accounted for 92 per cent (S$388.3 million) of total new business premiums3 for individual health insurance which totalled S$424.0 million for the full year. The remaining eight per cent (S$35.7 million) came from uptake of other medical plans and riders. An additional 64,000 more Singaporeans and Permanent Residents were covered by IPs, as at the end of December 2018. There are now 2.73 million lives - approximately 68 per cent of Singapore residents - with IP coverage to complement coverage provided under MediShield Life. Uplift in purchase of policies for retirement By policy count, the industry recorded a notable year-on-year increase of 48 per cent in the uptake of retirement policies designed to provide regular payouts to policyholders during their retirement years. 38,120 policies were purchased in YTD 4Q2018, a significant 12,345 more policies compared to last year in which there was a total uptake of 25,775 policies as at end December 2017. Contributing to S$338 million in weighted premiums for YTD 4Q2018, retirement policies accounted for approximately eight per cent of total weight premiums for the year, up from five per cent for YTD 4Q2017. Growing pool of talent driving the industry’s transformation The life insurance industry added 578 hires last year to reach a workforce of 8,007 employees as at end December 2018 with recruitment concentrated on data analytics, cyber security, operations, healthcare and marketing as life insurers pursue business expansion and digital innovations. There were also 15,542 representatives which held exclusive contracts with companies that operate a tied agency force in Singapore. Implementation of all FAIR initiatives The industry also implemented two remaining initiatives under the Financial Advisory Industry Review (FAIR)4 which began in 2012 with the aim of increasing consumers’ understanding of life insurance policies. There are now two new point-of-sale documents to be provided to consumers namely: A “Cover Page” to highlight salient features of the life insurance products; and A bundled disclosure document to highlight that bundled products such as endowment and whole life plans have both insurance protection and investment components, and that consumers have the option of purchasing term life policy and investing the premiums saved. OTHER HIGHLIGHTS FOR YTD 4Q2018 Product Classification Par products accounted for 46 per cent of new sales while non-par products accounted for 35 per cent. Investment-linked products made up the remaining 19 per cent. Distribution Channels The contribution of new business by the different channels is as follows: Distribution channel By weighted premium (%) By number of policies (%) Tied Representatives 38 53 Bank Representatives 35 11 Financial Adviser Representatives 22 20 Others (products sold without intermediaries, e. g. DPI, ElderShield) 5 16 Product License Classification As at 31 December 2018, insurers holding “Normal” licenses contributed 98 per cent of new sales, while the “Defined Market Segments” (DMS) insurers5 made up the remaining two per cent of new sales for YTD 4Q2018. Group Insurance: Total Annual Premiums In-Force Total annual premiums in-force for group insurance business rose by seven per cent compared to the same period a year ago, amounting to S$1.17 billion. Assets Contributing to Singapore’s position as a financial hub in Asia6, the life insurance industry managed assets of approximately S$211.2 billion, up nine per cent compared with a year ago. Assets of non-investment linked business accounted for S$175.3 billion, while the remaining S$35.9 billion were assets held for investment-linked business. Looking Forward “Singapore’s life insurance industry achieved growth despite a challenging end to 2018 with market volatility particularly pronounced in the last quarter. As we remain alert to the repercussions of continuing trade frictions and geo-political challenges, I am confident that life insurers will demonstrate agility and resilience by adapting to the changing environment to deliver solutions to meet Singaporeans’ insurance, investment and savings needs,” said Mr Patrick Teow, President of LIA Singapore. - End - Note to Editor: Industry results of YTD 4Q2018 are available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Dec 2018S$ Jan – Dec 2017S$ Change Single Premium 1,416.4 million 1,463.9 million -3% Linked 370.2 million 395.4 million -6% Non-linked 1,046.2 million 1,068.5 million -2% Annual Premium 2,818.3 million 2,624.3 million 7% Total 4,234.7 million 4,088.2 million 4% Comparison with Corresponding Quarter Oct – Dec 2018S$ Oct – Dec 2017S$ Change Single Premium 308.2 million 563.2 million -45% Linked 62.1 million 173.8 million -64% Non-linked 246.1 million 389.4 million -37% Annual Premium 761.1 million 777.3 million -2% Total 1,069.3 million 1,340.5 million -20% Comparison with Last Quarter Oct – Dec 2018S$ Jul – Sep 2018S$ Change Single Premium 308.2 million 430.5 million -28% Linked 62.1 million 111.0 million -44% Non-linked 246.1 million 319.5 million -23% Annual Premium 761.1 million 719.8 million 6% Total 1,069.3million 1,150.3 million -7% 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 https://www. cpf. gov. sg/members/News/news-categories-info/cpf-changes/2346 3 With effect from 1 January 2016, the MediShield Life premiums have been excluded from LIA statistics. New Business premiums refer to the premium due to the new business sold in the year, as well as incremental premiums from any repricing of plans, and change in age-band of the insureds. 4 http://www. mas. gov. sg/News-and-Publications/Speeches-and-Monetary-Policy-Statements/Speeches/2018/Strengthening-Trust-in-the-Financial-Advisory-industry. aspx 5 DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size. 6 Singapore unveils plan to bolster its status as an Asian financial hub (30 October 2017). AsiaOne. Available at: http://www. asiaone. com/singapore/singapore-unveils-plan-bolster-its-status-asian-financial-hub
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