Singapore's general insurance industry growth slows in 2016

SINGAPORE'S general insurance industry's growth slowed in 2016 given the intense competition with more new entrants, among other things.

Total gross premiums for the 12 months was up marginally by 0.6 per cent to S$3.7 billion, slower than the 1.1 per cent rise recorded in 2015, as higher gross premiums in motor, health, fire, personal accident and marine and cargo hull segments were offset by the fall in the work injury and compensation business.

The industry's underwriting profit fell 16.8 per cent year on year to S$258 million, led by margin compression, while loss ratio remained flat at 49.2 per cent last year, compared with 49.9 per cent in 2015.

On the offshore insurance side, gross premiums rose 40 per cent to S$1.9 billion. But underwriting losses worsened by 8.5 per cent to S$19.1 million..

General Insurance Association (GIA) president AK Cher on Tuesday said that against the many uncertainties, the industry still managed to deliver a "fair performance".

In motor insurance, the largest sub-segment at 31.5 per cent and similar to 2015, gross premiums remained flat at S$1.15 billion, up only 0.9 per cent from the previous year, due to improved loss ratios.

Loss ratio for the year improved to 53.9 per cent in 2016 from 55.9 per cent in 2015.

While the motor insurance industry remains profitable, underwriting profit for the year was down 27.7 per cent year on year to S$87.4 million.

New market entrants helped keep motor premiums largely stable last year, and the average motor premium stood at S$1,202, just a touch above 2015's S$1,195.

GIA said that motor premiums this year are "likely to remain flat due to keen competition among existing insurers from newcomers".