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Singapore general insurance sector falls into red with S$28m underwriting loss
THE general insurance market in Singapore recorded an underwriting loss of S$28 million last year, versus an underwriting profit of S$36.3 million in 2018.
The loss was largely due to a 12.2 per cent or S$159 million increase in total insurance claims paid out last year, the General Insurance Association of Singapore (GIA) said in results released on Tuesday.
The five largest segments – motor, health, property, employer's liability and travel, which make up 70 per cent of the general insurance market – recorded a combined underwriting loss of S$43.4 million in 2019.
Partially offsetting this loss was underwriting profit of S$17.2 million from the personal accident segment.
Gross written premiums for the overall sector grew 7.6 per cent on the year to S$4.1 billion as at Dec 31, 2019.
By segment, motor insurance was the largest contributor to gross written premiums, raking in some S$1.12 billion last year, up 1 per cent from 2018. However, it also weighed down the sector's overall underwriting performance, by incurring a 7.6 per cent or S$41.3 million increase in total claims paid out. The motor insurance segment posted an underwriting loss of S$17.4 million, versus a profit of S$9.2 million in the previous year.
There was a shift in vehicle ownership in Singapore in 2019, with vehicle population at its highest since 2013, fuelled mainly by a spike in private-hire cars, the GIA said.
"This meant that the sector was insuring a vehicle population with higher risk profiles, as private-hire cars are driven more frequently on the road," the association noted. This was reflected in the total number of accident reports last year, which increased by 1.4 per cent from 2018.
As for health insurance, the second-largest general insurance segment in Singapore, underwriting loss narrowed to S$11.2 million last year, compared to a S$44.2 million loss in the year prior.
The upward trend in health insurance claims continued, with an 8.1 per cent or S$22.6 million increase in payouts to policyholders requiring medical treatments last year. Gross written premiums for the segment rose about 14.3 per cent to S$666.8 million, from S$583.3 million a year ago.
The employers' liability insurance segment was buoyed by a sustained growth in employment for the construction sector last year, which led to an 8.9 per cent increase in gross written premiums.
The sector paid S$8.29 million more in work injury compensation amid a 5 per cent rise in the number of non-fatal injuries, even though the number of workplace fatalities fell to a record low last year, the GIA said.
On Tuesday, the association appointed a new management committee at its annual general meeting. It elected Craig Ellis as president and Christian Sandric as vice-president.
Mr Ellis said that Singapore's general insurance sector is "determined to overcome" the unprecedented challenge of the coronavirus outbreak together, and will double its efforts to support the community, GIA members, partners and all stakeholders.
"We will ensure that general insurance protection remains accessible for everyone," he added.
Notwithstanding the Covid-19 pandemic, one of the GIA's focus areas this year is to form a new centralised investigation bureau, which will build on the association's insurance fraud-prevention initiatives.
The association will also drive innovative changes for the sector through the newly formed market development committee.