Singapore life insurance records lower 2022 sales as single-premium sales dip in Q4
Chelsea Ong
SALES of single-premium products fell 28.8 per cent on year in weighted premiums in the fourth quarter of 2022, according to data released by the Life Insurance Association, Singapore (LIA) on Monday (Feb 13).
This resulted in a 9.2 per cent year-on-year decline in weighted premiums throughout 2022 to S$2.35 billion. LIA said this may be attributed to rising interest rates and a volatile macroeconomic environment.
Such conditions could have impacted consumers’ investment choice and preferences across various financial products in the market, it added.
Nonetheless, there was a boost in take-up for annual premium products in Q4, which LIA believes was driven mainly by an increasing interest in protection products.
Total weighted new business premiums in the annual premium product category grew 16 per cent year on year in Q4.
Meanwhile, total weighted new business premiums for individual health insurance increased by 13.5 per cent in Q4 compared with the previous year.
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In all, a total of S$5.1 billion in weighted new business premiums was recorded from January to December, down 5.2 per cent from 2021.
Total weighted new business premiums for individual health insurance stood at S$360.2 million in 2022, which LIA noted is consistent with 2021. Integrated shield plans (IPs) and IP rider premiums accounted for 85 per cent of these premiums, with the remaining 15 per cent coming from other medical plans and riders.
Par products accounted for 40 per cent of total weighted new business premiums in 2022, while non-par products accounted for 35 per cent. Investment-linked products made up the remaining 25 per cent.
Khor Hock Seng, president of LIA, noted that regular premium non-par products, such as term and health insurance, are increasing in demand as individuals place greater emphasis on ensuring they are well-protected.
LIA estimated that about 70 per cent of Singapore residents are protected by IPs and IP rider premiums, which provide coverage on top of MediShield Life. Some 40,000 more Singaporeans and permanent residents were covered by IPs and IP riders by the end of 2022 from the same time a year ago.
Between January and December, there was a year-on-year increase in claims payouts of 10.6 per cent to S$11.7 billion in the fourth quarter to policyholders and beneficiaries. The majority of the payouts were for policies that had matured, which amounted to S$10.1 billion. The remaining S$1.6 billion was for death, total and permanent disability, and critical illness claims.
Employment in the life insurance industry rose by 8.4 per cent to 9,402 employees as at Dec 31, compared with the previous year. Around 14,352 representatives held exclusive contracts with companies that operate a tied-agency force.
The industry is expected to face several challenges, such as a volatile macroeconomic environment brought about by sustained inflationary pressures and external geopolitical uncertainties, said Khor.
“Despite these, the industry will remain resilient and continue to ensure the seamless use of digital tools and solutions to enhance the digitalisation journey and experience for consumers,” he added.
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