Singapore's general insurance profit slips on economic slowdown, competition

Increased competition and the economic slowdown hurt underwriting profit of Singapore's general insurance industry in 2015, even as total gross premiums rose.

Total underwriting profit last year fell 17.1 per cent to S$325 million on a 2.6 per cent increase in total gross premiums to S$3.618 billion.

According to the General Insurance Association of Singapore (GIA), the various classes in the industry posted mixed performances depending on how each was affected by the downturn, external headwinds and increased competition from existing and new players.

Nevertheless, GIA president AK Cher said the general insurance sector "achieved a commendable performance despite the turbulence''.

Motor insurance is the industry's biggest class of business, accounting for 32 per cent of gross written premiums. In 2015, motor premiums dipped 4.4 per cent to S$1.141 billion, with S$120.1 million in underwriting profit, down 19.7 per cent from 2014's record S$149.5 million.

The GIA said the lower underwriting profit was partly due to stiffer competition, which led to the lower average motor premium dropping 2.9 per cent to S$1,192.

Looking at 2016, the GIA said it will emphasise the importance of underwriting discipline to its 21 members actively writing the motor business, so as to avoid returning to the previous decade's massive losses.

In 2008, the motor business suffered S$214.1 million in losses, with the industry managing to turn around only from 2011 onwards.