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Banks continue to dominate in new sales of life insurance in Singapore
BANKS in Singapore continued to be the dominant distribution channel of new sales of life insurance in the first three months of this year, outpacing tied agents and financial advisers.
In the first quarter of 2017, bank representatives contributed to 46 per cent of total weighted or S$377 million new business premiums. Tied agents accounted for 33 per cent or S$264 million of new sales and financial advisers contributed 17 per cent or S$135 million. The remaining 4 per cent or S$35 million came from direct sales for products sold without intermediaries, such as ElderShield.
But in terms of total sum assured of new businesses, tied agents contributed 43 per cent or S$10.5 billion, while financial advisers accounted for 28 per cent or S$6.7 billion. The amount that came from banks was S$6 billion or 25 per cent of the total sum assured. The remaining 4 per cent or S$1.1 billion came from direct sales channel.
Overall, Singapore's life insurance industry started the year on a positive note, recording a 19 per cent year-on-year growth in weighted new business premiums in Q1 to S$811 million, driven by a rise in uptake across both single and annual premium products.
Weighted new business sales in single-premium products rose 30 per cent to S$281.3 million, while that of annual-premium plans went up 14 per cent S$529.7 million.
The Life Insurance Association Singapore (LIA) on Monday said: "Life insurers are providing consumers more options in the form of new products and multiple channels to buy insurance policies from. This is also reflected in increased engagement through activities across the different distribution channels, including tied agents, banks and financial advisers."
LIA also said some 20,000 Singapore residents bought additional health insurance coverage, on top of MediShield Life in Q1.
New health insurance premiums were up 40.4 per cent year on year at S$66 million in Q1. Of these, 90 per cent or S$59 million comprised Integrated Shield Plan (IP) premiums and IP riders. The remaining S$7 million came from other medical plans and riders.
As at end March this year, 2.91 million lives or about one in two individuals here have this private health coverage, up from 2.84 million a year ago.
Patrick Teow, LIA's president, said the encouraging results in the first quarter point to the industry's core focus of bridging Singapore's protection gap.
"Work is underway on a fresh protection gap study this year. Ensuring adequate protection is especially critical at a time of economic uncertainty and rapid demographic shifts in Singapore. Life insurers are increasingly leveraging digitalisation to innovate and respond to these fundamental changes," he said.
Looking ahead, the industry is re-defining "protection" with people-centric initiatives that include championing preventive healthcare for a healthier population because prevention is better and cheaper than cure, Mr Teow added.