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Industry Performance
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Date Published: 11.11.2021
Life insurance sales registered 38 per cent growth in weighted premiums for the first nine months of 2021
Sales of Single-premium products remained strong; More policies purchased online. The Life Insurance Association, Singapore (LIA Singapore) today announced industry results for the period January to September 2021 (YTD 3Q2021). A total of S$4.11 billion in weighted new business premiums1 was achieved, a positive 38 per cent growth compared to YTD 3Q2020. Sales of single-premium products remained strong Single-premium products recorded a positive increase of 28 per cent in weighted premiums for the third quarter of 2021, when compared against the same period in 2020. This translated into a 68 per cent year-on-year increase in weighted premiums amounting to S$2.03 billion for YTD 3Q2021. a. Single-premium par and non-par products comprised 84 per cent of all single-premium purchases; single-premium linked products made up the remaining 16 per cent. b. CPFIS-included products comprised eight per cent; and cash-funded products accounted for the remaining 92 per cent. Sales of annual premium products slightly dipped in the third quarter Despite a dip of eight per cent in growth when compared against the corresponding quarter in 2020, sales of annual premium products managed to record an increase of 17 per cent, amounting to S$2.07 billion in weighted annual premiums for YTD 3Q2021. Significant growth in number of policies purchased online The number of new policies purchased online continues to increase to 370,528 in YTD 3Q2021 compared to 120,396 in YTD 3Q2020. These are purchases transacted online by customers without financial advisory. Integrated Shield Plans (IPs) remain a key component of health insurance Twenty-five thousand more Singaporeans and Permanent Residents were covered by IPs and riders as at 30 September 2021. 2.84 million lives – approximately 70 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 YTD 3Q2021 amounted to S$268.2 million. Overall, IPs and IP rider premiums accounted for 82 per cent (S$220.8 million) and the remaining 18 per cent (S$47.4 million) comprised other medical plans and riders. Sales of retirement policies continue to increase In terms of policy count, there was a 12 per cent increase in the uptake of retirement policies in YTD 3Q2021 compared to the same period last year. A total of 32,297 retirement policies3 were purchased as at 30 September 2021. Accounting for approximately seven per cent of total weighted premiums for YTD 3Q2021, retirement policies totalled S$295.5 million in weighted premiums for the first nine months of 2021. OTHER HIGHLIGHTS FOR YTD 3Q2021 Product classification Par products accounted for 44 per cent of new sales while non-par products accounted for 32 per cent. Investment-linked products made up the remaining 24 per cent. Distribution channels New business received from the various channels is as follows: Distribution Channel By Weighted Premium (%) By Number of Policies (%) Tied Representatives 32.1 37.3 Bank Representatives 33.2 7.5 Financial Adviser Representatives4 28.7 23.6 Online Direct Channel5 3.5 28.2 Others (products sold without intermediaries, e. g. ElderShield) 2.5 3.4 Product license classification As at 30 September 2021, insurers holding “Normal” licenses contributed 98 per cent of new sales, while “Defined Market Segments” (DMS) insurers6 made up the remaining two per cent of new sales for YTD 3Q2021. Total group insurance premiums in-force Total in-force annual premiums for group insurance business7 rose by 21 per cent compared to the same period a year ago, totalling S$1.79 billion. Manpower in the industry Employment in the life industry dipped slightly compared to the corresponding period in 2020. This brings Singapore life insurance industry’s workforce to 8,728 employees as at 30 September 2021. In the same period, 15,022 representatives held exclusive contracts with companies that operate a tied-agency force. Talent upskilling and acquisition continue to be a priority for member companies as they accelerate their respective digital and workforce transformation initiatives. LOOKING FORWARD Mr Khor Hock Seng, President, LIA Singapore, said, "‘Sustainability in insurance’ is rapidly evolving on many fronts and insurers will need to keep pace by acquiring the necessary expertise and resources. Multiple efforts at the insurance industry-level are in progress to curate and provide training courses for our workforce on the different aspects of sustainability and for different levels of employees. COVID-19 has served to greatly accelerate insurers’ digitalisation journey. Again, insurers will continue to focus on equipping our workforce to embrace digitalised processes and new ways of working. " – End – Note to Editor: Details of the life insurance industry results for YTD 3Q2021 are available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Sep 2021 S$ Jan – Sep 2020S$ Change Single Premium 2,034.3 million 1,210.9 million 68% Linked 329.9 million 282.4 million 17% Non-linked 1,704.4 million 928.5 million 84% Annual Premium 2,072.4 million 1,774.7 million 17% Total 4,106.7 million 2,985.6 million 38% Comparison with Corresponding Quarter Jul – Sep 2021 S$ Jul – Sep 2020S$ Change Single Premium 752.9 million 587.9 million 28% Linked 122.1 million 124.3 million -2% Non-linked 630.8 million 463.6 million 36% Annual Premium 675.2 million 736.7 million -8% Total 1,428.1 million 1,324.6 million 8% Comparison with Last Quarter Jul – Sep 2021 S$ Apr – Jun 2021S$ Change Single Premium 752.9 million 742.2 million 1% Linked 122.1 million 101.1 million 21% Non-linked 630.8 million 641.1 million -2% Annual Premium 675.2 million 704.4 million -4% Total 1,428.1 million 1,446.6 million -1% 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. 7 With effect from January 2021, data reported includes premiums from the Dependants’ Protection Scheme (DPS). Great Eastern Life is sole insurer appointed by the Government to manage the DPS. It is being managed as a group scheme. 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 SingaporeEmail : pauline. lim@lia. org. sg Louise Lam (Ms. )Ogilvy SingaporeTel: +65 6213 6986 / +65 9739 9863 Email: louise. lam@ogilvy. com
News Room -
Industry Performance
Date Published: 12.08.2021
Strong 61 percent growth of life insurance sales in 1H 2021 as consumers adapt to COVID-19 environment
Single-premium products continue to drive growth; More new policies purchased online. The Life Insurance Association, Singapore (LIA Singapore) today announced industry results for the period January to June 2021 (1H2021). A total of S$2.68 billion in weighted new business premiums1 was achieved, a strong 61 per cent growth compared to 1H2020. As a recap, during the same period last year, sales were at depressed levels due to the COVID-19 circuit breaker measures, which included the prohibition of face-to-face physical meetings. Mr Khor Hock Seng, President, LIA Singapore, said, “The strong showing of business results seen in the life insurance industry in the first half of this year reflects a level of stabilisation of Singapore’s economy from the immediate impact of COVID-19 in 1H2020. The growth in uptake of life insurance also seems to show that more people are placing greater importance on providing for their long-term financial and healthcare needs in the midst of an evolving pandemic environment. ” Significant uptake of single-premium products Single-premium products recorded a 106 per cent year-on-year increase in weighted premiums amounting to S$1.28 billion for 1H2021. a. Single-premium par and non-par products comprised 84 per cent of all single-premium purchases; single-premium linked products made up the remaining 16 per cent. b. CPFIS-included products comprised eight per cent; and cash-funded products accounted for the remaining 92 per cent. Strong uptake of annual premium products Annual premium products recorded an increased uptake of 35 per cent from the same period last year, amounting to S$1.40 billion in weighted annual premiums. Significant growth in number of policies purchased online The number of new policies purchased online continues to increase to 203,351 in 1H2021 compared to 32,952 in 1H2020. These are purchases transacted online by customers without financial advisory. Integrated Shield Plans (IPs) remain a significant component of health insurance Forty-three thousand more Singaporeans and Permanent Residents were covered by IPs and riders as at 30 June 2021. 2.85 million lives – approximately 70 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 1H2021 amounted to S$176.8 million. Overall, IPs and IP rider premiums accounted for 82 per cent (S$144.7 million) and the remaining 18 per cent (S$32.1 million) comprised other medical plans and riders. Recovery in uptake of retirement policies In terms of policy count, there was a 34 per cent increase in the uptake of retirement policies in 1H2021 compared to the same period last year. A total of 22,137 retirement policies3 were purchased as at 30 June 2021. Accounting for approximately seven per cent of total weighted premiums for 1H2021, retirement policies totalled S$198.2 million in weighted premiums for the first six months of 2021. OTHER HIGHLIGHTS FOR 1H2021 Product Classification Par products accounted for 46 per cent of new sales while non-par products accounted for 32 per cent. Investment-linked products made up the remaining 22 per cent. Distribution Channels New business from the different channels is as follows: Distribution Channel By Weighted Premium (%) By Number of Policies (%) Tied Representatives 31.9 38.6 Bank Representatives 32.9 7.7 Financial Adviser Representatives4 28.4 25.4 Online Direct Channel5 3.9 24.2 Others (products sold without intermediaries, e. g. ElderShield) 2.9 4.1 Product License Classification As at 30 June 2021, insurers holding “Normal” licenses contributed 98 per cent of new sales, while “Defined Market Segments” (DMS) insurers6 made up the remaining two per cent of new sales for 1H2021. Total group insurance premiums in-force Total in-force annual premiums for group insurance business rose by 20 per cent compared to the same period a year ago, totalling S$1.75 billion. Manpower in the industry Employment in the life industry dipped slightly compared to the corresponding period in 2020. This brings Singapore life insurance industry’s workforce to 8,589 employees as at 30 June 2021. In the same period, 14,893 representatives held exclusive contracts with companies that operate a tied-agency force. LOOKING FORWARD Mr Khor Hock Seng, President, LIA Singapore, said, “The life insurance industry will continue to focus on meeting our sustainability (ESG) commitments and workforce transformation goals for the year ahead. ” “The LIA, as a Strategic Partner of the Green Finance Industry Taskforce (GFIT), is working together with the general insurance and reinsurance sectors to build the industry’s capacity for the progressive adoption of local best practices and international standards. We are also working on industry initiatives to future-proof our workforce as technology and digital tools impact the way we do our jobs. ” – End – Note to Editor: More details of the life insurance industry results for 1H2021 available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Jun 2021 S$ Jan – Jun 2020S$ Change Single Premium 1,281.4 million 622.9 million 106% Linked 207.8 million 158.1 million 31% Non-linked 1,073.6 million 464.8 million 131% Annual Premium 1,397.2 million 1,038.0 million 35% Total 2,678.6 million 1,660.9 million 61% Comparison with Corresponding Quarter Apr – Jun 2021 S$ Apr – Jun 2020S$ Change Single Premium 742.2 million 329.5 million 125% Linked 101.1 million 79.6 million 27% Non-linked 641.1 million 249.9 million 157% Annual Premium 704.4 million 365.6 million 93% Total 1,446.6 million 695.1 million 108% Comparison with Last Quarter Apr – Jun 2021 S$ Jan – Mar 2021S$ Change Single Premium 742.2 million 541.6 million 37% Linked 101.1 million 109.1 million -7% Non-linked 641.1 million 432.5 million 48% Annual Premium 704.4 million 692.8 million7 2% Total 1,446.6 million 1,234.4 million8 17% 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. 7 Updated, due to revisions made after release of Q1 results 8 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 SingaporeEmail : pauline. lim@lia. org. sg Louise Lam (Ms. )Ogilvy SingaporeEmail: louise. lam@ogilvy. com
News Room -
Industry Performance
Date Published: 11.05.2021
Uptake of life insurance grew 29 per cent in Q1 2021 as consumers adapt to COVID-19 environment
Strong popularity of single-premium products a key growth driver; significant increase in new policies purchased online. The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January 2021 to March 2021 (1Q2021). Singapore’s life insurance industry recorded a total of S$1.25 billion in weighted new business premiums1 for 1Q2021, a positive 29 per cent growth compared to 1Q2020, which was prior to the COVID-19 circuit breaker measures. Mr Khor Hock Seng, President, LIA Singapore, said, “Despite the headwinds induced by COVID-19, the life insurance industry has seen continuous and promising growth. While the pandemic continues to pose challenges for our customers and organisations, it also prompted many to reconsider and better plan for their long-term financial and healthcare needs. ” “Life insurers in Singapore will be pro-active in supporting the community to better meet their protection needs, working closely with the government and relevant stakeholders to best manage the situation and fall-out caused by COVID-19. ” Significant growth in number of policies purchased online The number of new policies purchased online continues to increase to 88,565 in 1Q2021 compared to 4,662 in 1Q2020. This has been made possible as member companies press on to digitalise their processes from end to end. Significant uptake of single-premium products Single-premium products recorded an 85 per cent quarter-on-quarter increase in weighted premiums amounting to S$541.6 million in total for 1Q2021. a) Single-premium par and non-par products comprised 80 per cent of all single-premium purchases; single-premium linked products made up the remaining 20 per cent. b) CPFIS-included products comprised 10 per cent; and cash-funded products accounted for the remaining 90 per cent. Stable uptake of annual premium products Annual premium products recorded an increased uptake of five per cent from the same period last year, amounting to S$708.2 million in total weighted annual premiums. Integrated Shield Plans (IPs) remain a significant component of health insurance Twenty thousand more Singaporeans and Permanent Residents were covered by IPs and riders as at 31 March 2021. In total, 2.82 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 1Q2021 amounted to S$96.3 million. Overall, IPs and IP rider premiums accounted for 84 per cent (S$81.3 million) and the remaining 16 per cent (S$15.0 million) comprised other medical plans and riders. Slowdown in uptake of retirement policies In terms of policy count, there was a two per cent dip in the uptake of retirement policies in 1Q2021 compared to the same period last year. A total of 11,457 retirement policies3 were purchased as at 31 March 2021. Accounting for approximately eight per cent of total weighted premiums for 1Q2021, retirement policies totalled S$97.8 million in weighted premiums for the quarter. OTHER HIGHLIGHTS FOR 1Q2021 Product classification Par products accounted for 46 per cent of new sales while non-par products accounted for 30 per cent. Investment-linked products made up the remaining 24 per cent. Distribution channels New business from the different channels is as follows: Distribution Channel By Weighted Premium (%) By Number of Policies (%) Tied Representatives 31.3 39.4 Bank Representatives 32.2 7.5 Financial Adviser Representatives4 27.4 26.2 Online Direct Channel5 5.1 21.6 Others (products sold without intermediaries, e. g. ElderShield) 4.0 5.3 Product license classification As of 31 March 2021, insurers holding “Normal” licenses contributed 98 per cent of new sales, while “Defined Market Segments” (DMS) insurers6 made up the remaining two per cent of new sales for 1Q2021. Total group insurance premiums in-force Total in-force annual premiums for group insurance business rose by 16 per cent compared to the same period a year ago, totalling S$1.62 billion. Manpower in the industry Employment in the life industry remained stable compared to the corresponding period in 2020, with 40 new hires. This brings Singapore life insurance industry’s workforce to 8,708 employees as at 31 March 2021. In the same period, 14,945 representatives held exclusive contracts with companies that operate a tied-agency force. LOOKING FORWARD Mr Khor Hock Seng, President, LIA Singapore, said, “Life insurers have identified two key priorities for the year ahead; increasing the adoption of sustainable investing and future-proofing our workforce. ” “As a Strategic Partner of the Green Finance Industry Taskforce (GFIT), the LIA will initially focus on capacity building for the insurance industry, in close collaboration with other insurance sectors. ” “With the digitalisation of insurance well underway, our imperative is to enable our workforce to adapt to these new digital tools. Working through the LIA as an industry, the Institute of Banking and Finance (IBF) has customised training for our staff in growth mindset, design thinking and innovation, to equip them to embrace the evolving nature of their jobs. ” – End – Note to Editor: More details of the life insurance industry results for 1Q2021 available at https://www. lia. org. sg/news-room/industry-performance/ In Summary New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Mar 2021 S$ Jan – Mar 2020S$ Change Single Premium 541.6 million 293.4 million 85% Linked 109.1 million 78.5 million 39% Non-linked 432.5 million 214.9 million 101% Annual Premium 708.2 million 672.4 million 5% Total 1,249.8 million 965.8 million 29% Comparison with Last Quarter Jan – Mar 2021 S$ Oct – Dec 2020S$ Change Single Premium 541.6 million 624.7 million -13% Linked 109.1 million 83.0 million 32% Non-linked 432.5 million 541.7 million -20% Annual Premium 708.2 million 772.8 million -8% Total 1,249.8 million 1,397.5 million -11% 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, 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. 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 9863 Email: louise. lam@ogilvy. com
News Room -
Industry Performance
Date Published: 09.02.2021
Life Insurance industry closes 2020 with a positive three per cent growth, compared to a year ago
Growth driven by increased consumer demand for short-term single premium policies. Industry employment rose by four per cent, bucking national trend. The Life Insurance Association, Singapore (LIA Singapore) today announced a set of industry results for the period January 2020 to December 2020 (YTD 4Q2020). Singapore’s life insurance industry recorded a total of S$4.38 billion in weighted new business premiums1 for YTD 4Q2020, a positive three per cent growth, compared to 2019. There was a rebound in the second half of the year after the initial fallout from COVID-19 which affected policy uptake most significantly in the second quarter of the year. Mr Khor Hock Seng, President, LIA Singapore said, “The foremost priority for life insurers this year is to ensure that individuals, families and companies continue to have their healthcare, financial, and service needs met as we continue to experience fallout from the global pandemic. We are working closely with the relevant government agencies to constantly review the situation and support national initiatives. ” Efforts by the industry to provide support for customers amid COVID-19 include: Providing complimentary COVID-19 coverage to Integrated Shield Plans (IPs) and IP rider policyholders2, Implementing two windows of Deferred Premium Payment (DPP) scheme3 to allow affected policyholders more time to pay their premiums, Pro-actively engaging policyholders to consider right-sizing policies on DPP with a holistic review of policy coverage and premium commitment to ensure sustainability going forward, and Extending IP coverage to COVID-19 vaccination complications resulting in hospitalisation4. Tremendous growth in uptake of policies online The uptake of new policies purchased online saw a significant increase to 206,679 in 2020 compared to 9,971 in 2019. Most of the policies purchased online were single premium products such as short-term non-par endowment plans, par whole life plans, and universal life plans. Contributing factors leading to increased uptake of such policies online include: Simple online purchasing process, Simple and easy to understand features, Short-term commitment period, especially appealing to consumers amid uncertain financial security, and Reasonable returns, which are attractive to consumers seeking safe assets amid a low interest rate environment and uncertain economy. Single premium products continue to shine Sales of single premium products recorded a 47 per cent year-on-year increase in weighted premiums amounting to S$1.84 billion in total for YTD 4Q2020. a. Single premium par and non-par products comprised 80 per cent of all single-premium sales; single premium linked products made up the remaining 20 per cent b. CPFIS-included products comprised 12 per cent; cash-funded products accounted for the remaining 88 per cent Strong uptake of single premium products cushioned the decreased uptake of annual premium policies for the year. Sales of annual premium products remain slow Sales of annual premium products recorded a 15 per cent drop from the same period last year, amounting to S$2.55 billion in total weighted annual premiums. 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 320 net new hires. This brings Singapore’s life insurance industry’s workforce to 8,768 employees as at 31 December 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. The demand for digital specialists is expected to continue unabated in the foreseeable future as the industry presses on with digital transformation efforts. In the same period, 15,201 representatives held exclusive contracts with companies that operate a tied-agency force. Integrated Shield Plans (IPs) remain a significant component of health insurance 33,000 more Singaporeans and Permanent Residents were covered by IPs and riders as at 31 December 2020. In total, 2.82 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 4Q2020 amounted to S$377.7 million. Overall, IPs and IP rider premiums accounted for 88 per cent (S$331.2 million) and the remaining 12 per cent (S$46.5 million) comprised of other medical plans and riders. Uptake of retirement policies continues to decrease There was a 23 per cent dip in the uptake of retirement policies in YTD 4Q2020 compared to the same period last year. A total of 39,302 retirement policies6 were purchased as at 31 December 2020. Accounting for approximately eight per cent of total weighted premiums for YTD 4Q2020, retirement policies totalled S$341.4 million in weighted premiums for the year. OTHER HIGHLIGHTS FOR YTD 4Q2020 Product Classification Par products accounted for 44 per cent of new sales while non-par products accounted for 36 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 36.0 44.8 Bank Representatives 29.2 8.7 Financial Adviser Representatives7 26.7 24.7 Online Direct Channel8 4.1 14.2 Others (products sold without intermediaries, e. g. DPI, ElderShield) 4.0 7.6 Product License Classification As of 31 December 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 4Q2020. Group Insurance: Total Annual Premiums In-Force Total annual premiums in-force for group insurance business rose by nine per cent compared to the same period a year ago, totalling S$1.50 billion. LOOKING FORWARD “In 2021, life insurers will continue rallying behind the government’s efforts to bring COVID-19 under control through mass vaccinations. All seven Integrated Shield Plan insurers have extended hospitalisation coverage to policyholders experiencing complications resulting from regulator-approved vaccines10. ” “Digitalisation remains a key focus for life insurers as demand for online services continues to grow exponentially. A Memorandum of Understanding11 was signed between the LIA and Singapore FinTech Association (SFA) in December 2020 to facilitate mutual synergy between the InsurTech, FinTech and life insurance industries, within the push to becoming a Smart Nation,” said Mr Khor Hock Seng, President, LIA Singapore. – End – Note to Editor: Details of the life insurance industry results of YTD 4Q2020 are available at https://www. lia. org. sg/news-room/industry-performance/ IN SUMMARY New Business Sales (Weighted Basis) Comparison with Corresponding Period Jan – Dec 2020S$ Jan – Dec 2019S$ Change Single Premium 1,835.6 million 1,247.6 million 47% Linked 365.4 million 237.3 million 54% Non-linked 1,470.2 million 1,010.3 million 46% Annual Premium 2,547.5 million 3,006.0 million -15% Total 4,383.1 million 4,253.6 million 3% Comparison with Corresponding Quarter Oct – Dec 2020 S$ Oct – Dec 2019S$ Change Single Premium 624.7 million 358.4 million 74% Linked 83.0 million 71.3 million 16% Non-linked 541.7 million 287.1 million 89% Annual Premium 772.8 million 856.5 million -10% Total 1,397.5 million 1,214.9 million 15% Comparison with Last Quarter Oct – Dec 2020 S$ Jul – Sep 2020S$ Change Single Premium 624.7 million 587.9 million 6% Linked 83.0 million 124.3 million -33% Non-linked 541.7 million 463.6 million 17% Annual Premium 772.8 million 736.7 million 5% Total 1,397.5 million 1,324.6 million 6% 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. lia. org. sg/media/2431/media-release-gia-lia-statement-on-health-coverage-for-novel-coronavirus-11-feb-2020. pdf 3 https://www. lia. org. sg/media/2661/20200918_lia-media-release_further-initiatives-to-assist-policyholders_for-covid-19. pdf 4 https://www. lia. org. sg/media/2804/20210125_lia-press-release_covid-19-vaccination-complications. pdf 5 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. 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. 10 https://www. lia. org. sg/media/2804/20210125_lia-press-release_covid-19-vaccination-complications. pdf 11 https://www. lia. org. sg/media/2740/20201207-press-release_sfa-signs-mou-with-lia. pdf 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 9863 Email: louise. lam@ogilvy. com
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