Harnessing opportunities
[SINGAPORE] By most measures, Singapore is a mature, saturated market for insurance. Yet, as wealth grows and an ageing demographic becomes more entrenched, there is no shortage of opportunities for insurers.
Rising levels of wealth, for instance, raise the need for income and asset protection, as well as mechanisms for multi-generational wealth planning which insurance instruments lend themselves to.
Longevity is yet another trend. By next year, Singapore will be classified as “super aged”, where more than one in five people will be aged 65 or older. Longer lives intensify the need not just for health and disability protection, but also for savings and investments to fund decades in retirement.
Swiss Re, in a survey of 12,000 consumers across 12 Asian markets, found strong interest in life and health products. But it also found barriers to purchase, including high prices, lack of awareness and knowledge, and product irrelevance.
Swiss Re estimated that the health protection gap in Asia reached US$258 billion in premium equivalent in 2024. The gap has increased by 21 per cent since the survey was last conducted in 2017.
At the same time, the mortality protection gap has risen by 35 per cent to US$132 billion in premium equivalent terms, since 2017. “Household incomes and therefore protection needs have surged, but insurance uptake has not kept pace. These unmet insurance needs call for more targeted, inclusive insurance solutions,” said Swiss Re.
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This edition of Future of Insurance highlights the opportunities in long-term care, intergenerational wealth structuring among high-net-worth families, and retirement planning.
In long-term care, Singlife group chief executive Pearlyn Phau writes that the firm has sought to create an ecosystem of support, not only for those suffering severe disability, but also for their caregivers.
“Long-term care is not a distant risk, but a reality that can upend daily life without warning… True peace of mind comes from knowing care needs will be met, and that is the real value insurance must deliver in an ageing society.”
In the high-net-worth market, expectations are high around the intergenerational transfer of some US$5.8 trillion in wealth likely to occur between 2023 and 2030. Sun Life Singapore chief executive Christopher Albrecht writes that families typically recognise the need for the frameworks necessary for investment management and governance.
But families are less prepared for the personal impact, that is, “the disruption caused by grief, leadership voids, family disputes and the sudden liquidity crunch that can accompany the passing of a patriarch or matriarch”.
Insurance, he writes, can deliver liquidity when it is most needed, resolve estate disputes and ensure continuity.
As for retirement, HSBC has found in its survey of affluent Singaporeans that nearly half would like to take “mini retirements” or career breaks lasting between six and 12 months on average. Such “intentional pauses” typically last longer than a sabbatical, and may lead to significant life changes such as a career switch.
But careful planning will be needed to realise this. HSBC Life’s framework, writes chief executive Harpreet Bindra, is built on accumulation strategies that capture market upside and protect the downside, flexible income strategies, as well as inflation-indexed retirement income.
A common enabler cited by all the CEOs is the promise of digital innovation and artificial intelligence to raise efficiencies, enhance services and develop insight into issues such as longevity – all of which raise the potential of new solutions that fit current and emerging needs.
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