The total new business premium grew to S$2.8bn with annual premium products witnessing a “sizeable” 31% growth to S$2.1bn, as per the results declared by the Life Insurance Association today.
Sale of single premium products increased by 20% to S$0.7bn. Of this amount, sales made under the Singapore's central provident fund (CPF) accounted for around 16%, the association said.
The so-called defined market segment (DMS) of Singapore's insurance industry, which is comprised of just six companies, including the likes of Friends Provident International, Generali, Royal Skandia, Transamerica and Zurich International, accounted for 4% of new sales as of Dec-end 2013. Companies with "normal" licenses generated the rest, a percentage that has remained relatively consistent for some time.
The defined market segment is so-called because it caters for a high net worth market that is defined by a minimum premium size, and its members are not permitted to handle CPF business.
For the October-December quarter, the total new business premium rose by 28% to S$740.7m. Both single and annual premium products witnessed nearly the same growth of 27% and 28%, respectively.
“Despite a slight dip in the fourth quarter, we maintained sales momentum to end the year with improved growth over the previous year,” said Khoo Kah Siang, president, Life Insurance Association.
“Annual premium products were the biggest drivers of growth for the year, echoing a more stable market environment and improved consumer sentiment.”
Other key points contained in the data for January-December:
• The total sum assured for new business increased by 5% to reach S$82.9bn.
• New health insurance premiums went up by 145% to S$456m compared to the previous year. The bulk of this about 94% went to integrated shield plans and riders.
• The contribution of new business by different distribution channels remained more or less stable compared with a year ago. Tied agents contributed 46% of the business premium followed by banks and financial advisers whose share stood at 34% and 16%, respectively.
Tied agents continued to be the main channel of distribution both in terms of premium and number of policies.
Outlook
The association expects the growth momentum to continue for the industry in 2014 due to a “more resilient”economic outlook.
However, the recent initiative of Singapore government to launch MediShield Life along with the evolution of direct-to-consumer marketing recommended by the Financial Industry Review panel might impact the industry, Siang said
“The life insurance industry will continue to support government initiatives so every Singaporean can continue to enjoy affordable healthcare services,” Siang said .
“With regards the direct-to-consumer channel, we will be working very closely with the MAS to ensure best outcomes for both consumers and the industry,” he said.
Among its other recommendations, the FAIR panel appointed by the Monetary Authority of Singapore had proposed establishing a direct channel through which consumers can purchase basic insurance products with a nominal administration fee.
New Business Sales, as detailed by Life Insurance Association:
|
|
Jan – Dec 2013 |
Jan – Dec 2012 |
Change |
|
Single Premium |
$0.7bn |
$0.6bn |
20% |
|
Annual Premium |
$2.1bn |
$1.6bn |
31% |
|
Total |
$2.8bn |
$2.2bn |
28% |
|
|
Oct – Dec 2013 |
Oct – Dec 2012 |
Change |
|
Single Premium |
$178.2m |
$138.9m |
28% |
|
Annual Premium |
$562.5m |
$441.4m |
27% |
|
Total |
$740.7m |
$580.3m |
28% |
