Search This Section
Industry Performance
Showing 1-4 of 4
Date Published: 06.11.2020
Life Insurance industry sees increase in new business in 3Q 2020 compared to 2Q 2020
Industry employment rose by four per cent amid higher national unemployment rates. The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January 2020 to September 2020 (YTD 3Q2020). Singapore’s life insurance industry recorded a total of S$2.99 billion in weighted new business premiums1 for YTD 3Q2020, a decline of two per cent from the same period in 2019. There was a notable 90.6 per cent increase in new business premiums recorded in 3Q2020 compared to 2Q2020. Total weighted premiums recorded in the third quarter reached $1,324.6 million, a significant $629.5 million more than the $695.1 million recorded in the second quarter. This is consistent with Singapore’s economic performance which saw the nation’s Gross Domestic Product (GDP) grow by 7.9 per cent in the third quarter compared to a contraction of 13.2 per cent in the second quarter2 during the Circuit Breaker. Mr. Khor Hock Seng, President, LIA Singapore said, “Barring evolving COVID-19 conditions in other countries, Singapore is moving towards a slow recovery and the life insurance industry remains committed to supporting the population in meeting and maintaining their protection needs. We will continue to monitor the situation and work closely with regulators to get through these challenging times. ” Beyond offering instalment-based payment of deferred premiums, life insurers are also proactively engaging policyholders to right-size their insurance plans to ensure sustainable premium payments in the future.3 Life insurance industry continues to expand its workforce Employment in the life industry rose by four per cent, compared to the corresponding period in 2019, with 357 net new hires. This brings Singapore’s life insurance industry’s workforce to 8,801 employees as at 30 September 2020. New hires have primarily been attributed to insurers expanding their IT and operations teams as well as steady hiring in project and product management roles. In the same period, 15,286 representatives held exclusive contracts with companies that operate a tied-agency force. Continued industry employment comes at a time when Singapore is experiencing a higher resident unemployment rate at 4.7 per cent and overall unemployment rate of 3.6 per cent in September 2020.4 Sales of annual premium products continue to soften Sales of Annual premium (AP) products recorded a 17 per cent drop from the same period last year, amounting to S$1.77 billion in total weighted annual premiums. The downward trend is expected to continue for some time until Singapore’s economy further strengthens. Sales of single premium products continue to increase Cushioning the decreased uptake of annual premium policies, sales of single premium products recorded a 36 per cent year-on-year increase in weighted premiums amounting to S$1.21 billion in total for YTD 3Q2020. a) Single premium par and non-par products comprised 77 per cent of all single-premium sales; single premium linked products made up the remaining 23 per cent b) CPFIS-included products comprised 16 per cent; cash-funded products accounted for the remaining 84 per cent More short-term single premiums products were sold in tranches. These products are simple to understand, and do not require medical underwriting. The current low interest rate environment is another factor behind why such products are popular with consumers. Total sum assured new business continues to increase The total sum assured for new business rose by 13 per cent year-on-year, amounting to S$116.2 billion for YTD 3Q2020. Integrated Shield Plans (IPs) remain a significant component of health insurance 48,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 30 September 2020. In total, 2.81 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 premiums5 for individual health insurance for YTD 3Q2020 amounted to S$273.1 million. Overall, IPs and IP rider premiums accounted for 87 per cent (S$238.3 million) and the remaining 13 per cent (S$34.8 million) comprised of other medical plans and riders. Reduced uptake of retirement policies There was a 25 per cent decrease in the uptake of retirement policies in YTD 3Q2020 compared to the same period last year. A total of 28,781 retirement policies6 were purchased as at 30 September 2020. Accounting for approximately eight per cent of total weighted premiums for YTD 3Q2020, retirement policies totalled S$252.2 million in weighted premiums for the first nine months of 2020. OTHER HIGHLIGHTS FOR YTD 3Q2020 Product Classification Par products accounted for 42 per cent of new sales while non-par products accounted for 38 per cent. Investment-linked products made up the remaining 20 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 35.9 47.7 Bank Representatives 29.8 9.2 Financial Adviser Representatives7 26.0 23.1 Online Direct Channel8 4.1 12.1 Others (products sold without intermediaries, e. g. DPI, ElderShield) 4.2 7.9 Product License Classification As of 30 September 2020, insurers holding “Normal” licenses contributed for 98 per cent of new sales, while “Defined Market Segments” (DMS) insurers9 made up for the remaining two per cent of new sales for YTD 3Q2020. Group Insurance: Total Annual Premiums In-Force Total annual premiums in-force for group insurance business rose by 10 per cent compared to the same period a year ago, totalling S$1.48 billion. LOOKING FORWARD “Life insurers are continuing to accelerate digitalisation efforts to future-proof our businesses. Workforce transformation remains a priority for life insurers to ensure our employees receive the training needed to utilise next-generation technologies such as artificial intelligence, data analytics, and machine learning; leveraging their benefits to improve customer experience and product innovation,” said Mr Khor. – END – Note to Editor: More details of the life insurance industry results for YTD 3Q 2020 available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Sep 2020 S$ Jan – Sep 2019 S$ Change Single Premium 1,210.9 million 889.2 million 36% Linked 282.4 million 166.1 million 70% Non-linked 928.5 million 723.1 million 28% Annual Premium 1,774.7 million 2,149.5 million -17% Total 2,985.6 million 3,038.7 million -2% Comparison with Corresponding Quarter Jul – Sep 2020 S$ Jul – Sep 2019S$ Change Single Premium 587.9 million 357.3 million 65% Linked 124.3 million 63.1 million 97% Non-linked 463.6 million 294.2 million 58% Annual Premium 736.7 million 767.1 million -4% Total 1,324.6 million 1,124.4 million 18% Comparison with Last Quarter Jul – Sep 2020 S$ Apr – Jun 2020S$ Change Single Premium 587.9 million 329.5 million 78% Linked 124.3 million 79.6 million 56% Non-linked 463.6 million 249.9 million 86% Annual Premium 736.7 million 365.6 million 102% Total 1,324.6 million 695.1 million 91% 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 GDP contraction slows to 7% in Q3, propped up by manufacturing’ (Oct 14, 2020) The Business Times. Sharon See. Available at: https://www. businesstimes. com. sg/government-economy/singapore-gdp-contraction-slows-to-7-in-q3-propped-up-by-manufacturing 3 ‘Media release: Life insurance industry announces further initiatives to assist policyholders financially impacted by COVID-19’ (Sep 18, 2020) Life Insurance Association, Singapore. Available at: https://www. lia. org. sg/media/2661/20200918_lia-media-release_further-initiatives-to-assist-policyholders_for-covid-19. pdf 4 ‘Labour market remains soft despite promising signs’ (Oct 31, 2020) The Straits Times. Choo Yun Ting. Available at: https://www. straitstimes. com/singapore/jobs/labour-market-remains-soft-despite-promising-signs 5 With effect from 1 January 2016, 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. 6 These policies are designed to provide regular payouts during policyholders’ retirement years. 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. 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 Louise Lam (Ms. )Ogilvy SingaporeTel : +65 6213 6986 / +65 9739 9863Email: louise. lam@ogilvy. com Amanda Chong (Ms. )Ogilvy SingaporeTel : +65 6213 7781 / +65 8200 5363Email: amanda. chong@ogilvy. com
News Room -
Industry Performance
Date Published: 11.08.2020
Life insurance industry records 13 per cent decline in sales due to COVID-19 pandemic
Supporting Singaporeans through pandemic remains foremost priority for industry; accelerating digital and workforce transformation key to adapting to new normal. The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January to June 2020 (1H2020). Singapore’s life insurance industry recorded a total of S$1.66 billion in weighted new business premiums1 for 1H2020, a drop of 13 per cent from the same period in 2019. The ongoing recession stemming from the COVID-19 pandemic has resulted in demand- and supply-side shocks to the Singapore economy. The life insurance sector was not exempted from subsequent economic repercussions, which has impacted results for the period of April – June 2020 (2Q2020). 1H2020 encompassed both ‘Circuit-Breaker’ and ‘Phase 1’ periods where strict social distancing measures were enforced. As a result, annual premium business recorded a 25 per cent drop from the same period last year. This amounted to a total S$1.04 billion in total weighted annual premiums. Sales for the second quarter was significantly impacted – the amount of premiums collected was only half of the level in the same period last year. The silver lining came in the form of increased single premium sales which helped cushion the impact caused by the decrease in annual premium business. In 1H2020, a 17 per cent year-on-year increase in weighted single premiums amounting to S$622.9 million in total was achieved. a) Single premium par and non-par products comprised 75 per cent; single premium linked products made up the remaining 25 per cent b) CPFIS-included products comprised 16 per cent; cash-funded products took the remaining 84 per cent More short-term single premiums products were sold in tranches. These products are simple to understand, and they do not require medical underwriting. Representatives were able to bring customers through the sales process electronically and close sales despite the challenging situation. The total sum assured for new business rose by one per cent year-on-year, amounting to S$65.7 billion in 1H2020. “Since the beginning of the COVID-19 outbreak in Singapore, the life insurance sector has and continues to work closely with the relevant authorities to ensure Singaporeans receive the protection they need during this challenging period,” said Mr. Khor Hock Seng, President, LIA Singapore. “Proactive support measures such as the Deferred Premium Payment scheme which allows premium payments to be deferred up to six months, complimentary access to telemedicine services, and supplementary activities to encourage healthy living during the circuit-breaker period are just some of the initiatives put in place to help Singaporeans cope with the changes to their financial situation and lifestyle needs,” he added. Integrated Shield Plans (IPs) remain a significant component of health insurance 51,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 30 June 2020. In total, 2.81 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 premiums2 for individual health insurance for 1H2020 amounted to S$173.0 million. Overall, IPs and IP rider premiums accounted for 87 per cent (S$149.9 million) and the remaining 13 per cent (S$23.1 million) comprised other medical plans and riders. Life insurance industry doubles down on workforce transformation efforts Employment in the life industry rose by four per cent, compared to the corresponding period in 2019, with 368 net new hires. This brings Singapore’s life insurance industry’s workforce to 8,650 employees as at 30 June 2020. New hires have primarily been attributed to the expansion of Distribution and Sales teams, as well as project and product management roles. Member companies are working together at the industry-level to provide selected training for their staff. With growing and sustained demand for talent in the technology and digital space, member companies are leveraging on the SG United Traineeships Programmes to provide internship placement opportunities for tertiary students, including career opportunities in data science and digital analytics. Within the same period, 14,787 representatives held exclusive contracts with companies that operate a tied-agency force. Reduced uptake of retirement policies There was a 36 per cent decrease in the uptake of retirement policies in 1H2020 compared to the same period last year, reversing the upward trend in recent years. A total of 16,582 retirement policies3 were purchased as at 30 June 2020. Accounting for approximately nine per cent of total weighted premiums for 1H2020, retirement policies totalled S$148.8 million in weighted premiums for the first six months of 2020. OTHER HIGHLIGHTS FOR 1H2020 Product Classification Par products accounted for 40 per cent of new sales while non-par products accounted for 39 per cent. Investment-linked products made up the remaining 21 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 36.1 48.9 Bank Representatives 30.3 10.0 Financial Adviser Representatives4 26.7 26.3 Online Direct Channel5 2.6 6.0 Others (products sold without intermediaries, e. g. DPI, ElderShield) 4.3 8.8 Product License Classification As of 30 June 2020, insurers holding “Normal” licenses contributed 98 per cent of new sales, while “Defined Market Segments” (DMS) insurers6 made up for the remaining two per cent of new sales in 1H2020. 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, totalling S$1.46 billion. LOOKING FORWARD “In conjunction with the Fourth Industrial Revolution, Singapore is undergoing an unprecedented and indeterminate period of uncertainty caused by the pandemic. Life insurers need to accelerate their digitalisation efforts as these are crucial to maintain business continuity, optimise efficiency, improve customer servicing standards and enable the innovation of new products,” said Mr. Khor Hock Seng, President, LIA Singapore. “To ensure employees benefit from this digital transformation, life insurers are investing in training and upskilling their workforce for the future,” he added. – End – Note to Editor: More details of the life insurance industry results for 1H2020 available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Jun 2020 S$ Jan – Jun 2019 S$ Change Single Premium 622.9 million 531.9 million 17% Linked 158.1 million 103.0 million 53% Non-linked 464.8 million 428.9 million 8% Annual Premium 1,038.0 million 1,382.4 million -25% Total 1,660.9 million 1,914.3 million -13% Comparison with Corresponding Quarter Apr – Jun 2020 S$ Apr – Jun 2019S$ Change Single Premium 329.5 million 307.2 million 7% Linked 79.6 million 54.6 million 46% Non-linked 249.9 million 252.6 million -1% Annual Premium 365.6 million 729.3 million -50% Total 695.1 million 1,036.5 million -33% Comparison with Last Quarter Apr – Jun 2020 S$ Jan – Mar 2020S$ Change Single Premium 329.5 million 293.4 million 12% Linked 79.6 million 78.5 million 1% Non-linked 249.9 million 214.9 million 16% Annual Premium 365.6 million 672.4 million -46% Total 695.1 million 965.8 million -28% 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 With effect from 1 January 2016, 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. 3 These policies are designed to provide regular payouts during policyholders’ retirement years. 4 Financial Adviser (FA) Representatives include representatives of “related FA firms”. A related FA firm is a wholly-owned subsidiary of an insurance company. 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. 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 Louise Lam (Ms. )Ogilvy SingaporeTel : +65 6213 6986 / +65 9739 9863Email: louise. lam@ogilvy. com Amanda Chong (Ms. )Ogilvy SingaporeTel : +65 6213 7781 / +65 8200 5363Email: amanda. chong@ogilvy. com
News Room -
Industry Performance
Date Published: 22.05.2020
Life Insurance industry achieves 20 per cent increase in total sum assured for the first quarter of 2020 as uptake of insurance rises prior to the COVID-19 circuit breaker measures
Industry remains focused on long-term efforts to ensure a digitally trained workforce. The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January to March 2020 (1Q2020). Singapore’s life insurance industry recorded a total of S$965.8 million in weighted new business premiums1 for 1Q2020, a 10 per cent increase from the same period in 2019. Overall, single premium business recorded a 31 per cent quarter-on-quarter increase in weighted single premiums, amounting to S$293.4 million for 1Q2020, attributed to insurers’ new product launches and associated promotional activities. a) Single premium par and non-par products comprised 73 per cent; single premium linked products made up the remaining 27 per cent b) CPFIS-included products comprised 16 per cent; Cash-funded products took the remaining 84 per cent Annual premium policies recorded a steady three per cent increase from the same period last year. This amounted to S$672.4 million in total weighted annual premiums. In tandem with the growth in single and annual premium policies, total sum assured for new business rose by a strong 20 per cent quarter-on-quarter, amounting to S$34.6 billion for 1Q2020. Mr Khor Hock Seng, President, LIA Singapore said: “The industry continues to make headway in bridging protection gaps in the first quarter as more consumers take action to secure their financial future in view of COVID-19’s drastic impact on global and local markets2. However, with circuit breaker measures, climbing unemployment and an impending recession3, the life insurance industry may see the knock-on effect in the coming quarters. ” “Singapore’s life insurance industry remains resilient, united, and committed to providing support for customers and our workforce during these challenging times. We will continue working closely with regulators to facilitate support measures effectively and efficiently,” he added. Support measures provided by Singapore’s life insurance industry for customers amid COVID-19 include: - For policyholders in financial difficulties, a grace period of up to six months to make payment on premiums if the policy premium due date or policy renewal date falls on any date between 1 April 2020 and 30 September inclusive4 - Health and group insurance coverage extended to cover COVID-19 patients admitted to a Community Care Facility (CCF) or Community Recovery Facility (CRF) for up to 14 days after they are transferred there from a hospital5 - Outpatient telemedicine claims covered by Integrated Shield Plans (IPs) and relevant group insurance plans during this period6 Life insurance industry continues to expand and invest in ensuring a digitally-trained workforce Employment in the life industry rose by four per cent, as a result of 359 net new hires, compared to the corresponding period in 2019. This brings Singapore’s life insurance industry’s workforce to 8,668 employees as at 31 March 2020. In addition, 14,604 representatives held exclusive contracts with companies that operate a tied agency force within the same period. Singapore’s life insurance industry is investing significantly in upskilling employees and financial advisers for an increasingly digitalised Singapore as we go through economic restructuring7. To remain ahead of these rapid changes, member companies are pursuing initiatives to accelerate the implementation of their digital transformation strategies. This includes upskilling employees as well as providing financial advisers with enhanced digital tools to better engage with and serve customers remotely8. Life insurers in Singapore have automated processes which enable the purchase, processing, and general servicing of accounts digitally. Member companies have also enhanced the remote working experience. These have been especially critical amid the COVID-19 pandemic and circuit breaker period. In all these efforts, the industry is ensuring that the confidentiality and security of information is not compromised. Integrated Shield Plans (IPs) remain a significant component of health insurance 57,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 31 March 2020. 2.80 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 premiums9 for individual health insurance for 1Q2020 amounted to S$101.8 million. Overall, IPs and IP rider premiums accounted for 87 per cent (S$88.2 million) and the remaining 13 per cent (S$13.6 million) comprised other medical plans and riders. Slight dip in the uptake of retirement policies While there was an increase in uptake of protection products, there was a slight four per cent decline in the uptake of retirement policies in 1Q2020 compared to the same period last year. A total of 11,713 retirement policies10 were purchased as at 31 March 2020. Accounting for approximately 11 per cent of total weighted premiums for 1Q2020, retirement policies totalled S$107 million in weighted premiums for this quarter. OTHER HIGHLIGHTS FOR 1Q2020 Product Classification Par products accounted for 48 per cent of new sales while non-par products accounted for 32 per cent. Investment-linked products made up the remaining 20 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 32.5 51.6 Bank Representatives 38.6 12.9 Financial Adviser Representatives11 24.0 24.8 Online Direct Channel12 0.6 1.6 Others (products sold without intermediaries, e. g. DPI, ElderShield) 4.3 9.1 Product License Classification As of 31 March 2020, insurers holding “Normal” licenses contributed 98 per cent of new sales, while the “Defined Market Segments” (DMS) insurers13 made up the remaining two per cent of new sales for 1Q2020. Group Insurance: Total Annual Premiums In-Force Total annual premiums in-force for group insurance business rose by 12 per cent compared to the same period a year ago, amounting to S$1.4 billion. LOOKING FORWARD “We maintain a conservative outlook as the life insurance sector continues to navigate headwinds brought forth from economic instability. The COVID-19 pandemic and ensuing lockdown measures across the world have caused a domino effect resulting in a global economic downturn. Until a vaccine is discovered, it is difficult to gauge how long the headwinds will last,” concluded Mr Khor Hock Seng, President of LIA Singapore. – End – Note to Editor: More details of the life insurance industry results for 1Q2020 available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Mar 2020 S$ Jan – Mar 2019 S$ Change Single Premium 293.4 million 224.7 million 31% Linked 78.5 million 48.3 million 63% Non-linked 214.9 million 176.4 million 22% Annual Premium 672.4 million 653.1 million 3% Total 965.8 million 877.8 million 10% Comparison with Last Quarter Jan – Mar 2020 S$ Oct – Dec 2019S$ Change Single Premium 293.4 million 358.4 million -18% Linked 78.5 million 71.3 million 10% Non-linked 214.9 million 287.1 million -25% Annual Premium 672.4 million 856.5 million -21% Total 965.8 million 1,214.9 million -21% 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 COVID-19 Consumer Survey Singapore. Swiss Re (29 April 2020). Available at: https://www. swissre. com/dam/jcr:5235c471-991f-4857-bd29-5973cfaa8270/covid19-infographic-apac-singapore. pdf 3 'MAS expects more job losses, wage cuts as economy deals with ‘large abrupt shock’ from COVID-19’. CNA (28 April 2020). Available at: https://www. channelnewsasia. com/news/singapore/covid-19-mas-more-job-losses-wage-cuts-large-abrupt-shock-12683068 4 Refer to the LIA Singapore announcement ‘Measures by Life Insurers to Support Customers Financially Impact by COVID-19’ (31 March 2020) for more details: https://www. lia. org. sg/media/2485/lia-media-release-on-covid-19-support-31mar2020. pdf 5 Refer to LIA Singapore announcement 'Health and group insurance to extend daily hospital cash benefit cover to patients in Community Card Facilities and Community Recovery Facilities’ (5 May 2020) for more details: https://www. lia. org. sg/media/2550/200505_lia-gia-release_extend-daily-hospital-cash-benefit-cover. pdf 6 Refer to LIA Singapore announcement 'Health and group insurance to extend daily hospital cash benefit cover to patients in Community Card Facilities and Community Recovery Facilities’ (5 May 2020) for more details: https://www. lia. org. sg/media/2550/200505_lia-gia-release_extend-daily-hospital-cash-benefit-cover. pdf 7 May Day Message 2020 by PM Lee Hsien Loong (30 April 2020) Available at: https://www. pmo. gov. sg/Newsroom/PM-Lee-Hsien-Loong-May-Day-Message-2020 8 Refer to announcement by the Monetary Authority of Singapore (MAS) ‘MAS Urges Customers to Minimise Visits to Premise of Financial Institutions’ (17 April 2020) on circuit breaker measures impacting the industry: https://www. mas. gov. sg/news/media-releases/2020/mas-urges-customers-to-minimise-visits-to-premises-of-financial-institutions 9 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. 10 These policies are designed to provide regular payouts during policyholders’ retirement years. 11 Financial Adviser (FA) Representatives include representatives of “related FA firms”. A related FA firm is a wholly-owned subsidiary of an insurance company. 12 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”. 13 DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size. 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: 06.02.2020
Life Insurance industry achieved 0.4 per cent growth in 2019 uplifted by sustained trajectory of annual premium business
Industry continued expanding workforce and increasing take-up of retirement policies amid a challenging macroenvironment last year The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January to December 2019 (YTD 4Q2019). Singapore’s life insurance industry recorded a total of S$4.3 billion in weighted new business premiums1 for YTD 4Q2019, a 0.4 per cent increase from the corresponding period in 2018. Total sum assured for new business continued to increase, recording a seven per cent growth year-on-year, amounting to S$149.5 billion. The industry’s continued growth is set against the backdrop of the nation’s muted economic growth for the year2 which was the slowest in a decade. The industry continued to make headway in narrowing the protection gap in Singapore with an increase in uptake of annual premium policies which recorded a seven per cent increase from the same period last year. This amounted to S$3.0 billion in total weighted annual premiums. However, primarily due to global market volatility, there was an overall 12 per cent decline in single premium business with weighted single premiums amounting to S$1.2 billion for the year. 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 There is increasing recognition and actions taken by consumers, encouraged by the industry and government, to take more pro-active efforts in planning for retirement. The industry recorded a 34 per cent increase in the uptake of retirement policies3 in YTD 4Q2019 compared to a year ago based on policy count. A total of 51,040 policies were purchased as at 31 December 2019, a significant 12,920 more policies compared to the same period in 2018. Making up about 11 per cent of total weighted premiums for YTD 4Q2019, retirement policies totalled S$469 million in weighted premiums for the year. Life insurance industry continues to expand its workforce Employment in the life industry rose by six per cent as a result of 441 new hires, compared to the corresponding period in 2018, to reach a workforce of 8,448 employees, as of 31 December 2019. Among new types of jobs being created in the industry, expertise in digitalisation transformation remains highly sought after. 14,844 representatives held exclusive contracts with companies that operate a tied agency force as at 31 December 2019, a four per cent decrease compared to the corresponding period in 2018. The role of financial advisory representatives in Singapore remains essential in providing personalised advisory based on each individual’s circumstances as well as protection, investments, and savings needs. The Association is also exploring ways to support the industry’s workforce transformation as expertise in digitalisation remains highly sought after. Integrated Shield Plans (IPs) remain a significant component of health insurance 58,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 31 December 2019. 2.79 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 premiums4 for individual health insurance for YTD 4Q2019 amounted to S$465.7 million. Overall, IPs and IP rider premiums accounted for 90 per cent (S$419.7 million) and the remaining 10 per cent (S$46.0 million) comprised other medical plans and riders. All IP insurers have rolled out new rider policies with mandatory co-payment of 5% or more from April 2019. This feature will encourage consumers and providers to choose cost-effective treatments, and reduce the buffet syndrome which arises when there is no out-of-pocket cost. The new riders will also have a cap on the co-payment amount each year for treatments they are pre-authorised or provided by doctors on IP insurer’s respective approved panel. IP insurers may also set a co-payment cap of S$3,000 or more per policy year. Consumers continue to have access to IP insurers existing rider plans. New policyholders will be informed that they will be transited to the new riders with co-payment from 1 April 2021.5 Following recommendations put forth by the Health Insurance Task Force (HITF) in 20166, LIA Singapore and IP insurers continue to take pro-active efforts to keep health and health insurance accessible for Singapore Residents with more initiatives in 2019. This includes the introduction of the LIA Pre-Authorisation Form7, which will help to standardise the process for policyholders to obtain approval from their insurer for a medical treatment and its estimated bill size prior to the actual procedure. The standardised approach serves to guard against unnecessary treatments, any unexpected out-of-pocket payments, and possible denial of claim, and addresses feedback from doctors regarding differing requirements of different insurers for their pre-authorisation application prior to the implementation of the Form from October 2019. IP insurers are gradually rolling out this standardised form, which will be fully implemented by 31 March 2020. Pre-authorisation is an important measure for our healthcare system to bring healthcare cost inflation under control in the long term. LIA is committed to working with providers to improve this process over time. OTHER HIGHLIGHTS FOR YTD 4Q2019 Product Classification Par products accounted for 48 per cent of new sales while non-par products accounted for 35 per cent. Investment-linked products made up the remaining 17 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 34.0 50.7 Bank Representatives 36.0 11.3 Financial Adviser Representatives8 24.7 22.1 Online Direct Channel9 0.2 0.8 Others (products sold without intermediaries, e. g. DPI, ElderShield) 5.0 15.1 Product License Classification As of 31 December 2019, insurers holding “Normal” licenses contributed 98 per cent of new sales, while the “Defined Market Segments” (DMS) insurers10made up the remaining two per cent of new sales for YTD 4Q2019. Group Insurance: Total Annual Premiums In-Force Total annual premiums in-force for group insurance business rose by 18 per cent compared to the same period a year ago, amounting to S$1.4 billion. LOOKING FORWARD “The life insurance industry will continue to take a long-term view to progress Singapore as a thriving insurance hub in the region. We will focus efforts on enhancing the professionalism, culture and conduct in the way we do business, as well as drive more innovations as we invest in grooming the workforce for the future. At the same time, we remain committed to supporting the community with ongoing efforts to help narrow the protection gap, ensure continued accessibility of healthcare, support individuals better prepare for retirement,” said Mr Khor Hock Seng, President of LIA Singapore. – End – Note to Editor: Industry results of YTD 4Q2019 are available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Dec 2019S$ Jan – Dec 2018 S$ Change Single Premium 1,247.6 million 1,416.4 million -12% Linked 237.3 million 370.2 million -36% Non-linked 1,010.3 million 1,046.2 million -3% Annual Premium 3,006.0 million 2,818.3 million 7% Total 4,253.6 million 4,234.7 million 0.4% Comparison with Corresponding Quarter Oct – Dec 2019 S$ Oct – Dec 2018S$ Change Single Premium 358.4 million 308.2 million 16% Linked 71.3 million 62.1 million 15% Non-linked 287.1 million 246.1 million 17% Annual Premium 856.5 million 761.1 million 13% Total 1,214.9 million 1,069.3 million 14% Comparison with Last Quarter Oct – Dec 2019 S$ Jul – Sep 2019S$ Change Single Premium 358.4 million 357.3 million 0.3% Linked 71.3 million 63.1 million 13% Non-linked 287.1 million 294.2 million -2% Annual Premium 856.5 million 767.1 million 12% Total 1,214.9 million 1,124.4million 8% 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’s GDP Grew by 0.8 Per Cent in the Fourth Quarter of 2019 (2 Jan 2020) Available at: https://www. singstat. gov. sg/-/media/files/news/advgdp4q2019. pdf 3 These policies are designed to provide regular payouts during policyholders’ retirement years. 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 COS Factsheet: Keeping Healthcare Costs Sustainable for all Singaporeans (2018) Available at: https://www. moh. gov. sg/docs/librariesprovider5/pressroom/current-issues/cos-2018-media-factsheet---keeping-healthcare-costs-sustainable-for-all-singaporeans. pdf 6 https://www. lia. org. sg/media/1521/managingsingaporehealthinsurancecost_hitf_20161013. pdf 7 https://www. lia. org. sg/news-room/media-releases/2019/life-insurance-industry-launches-standard-pre-authorisation-form-to-simplify-the-pre-authorisation-application-process-for-doctors/ 8 Financial Adviser (FA) Representatives include representatives of “related FA firms”. A related FA firm is a wholly-owned subsidiary of an insurance company. 9 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”. 10 DMS insurers are registered by MAS to conduct only non-CPF business and with minimum policy size. 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