Insurers attained 45% growth in 1Q 2011

The $460 million weighted new business premiums was spurred by robust sales across all products.

According to the Life Insurance Association, weighted regular premiums sales reached $294.0 million in the first quarter of 2011, registering a 35 per cent growth over the same period of last year. Single premium sales fared even better, soaring by 65 per cent over the same period of last year to $166 million. Of this amount, 17 per cent comprised CPF-funded sales.

“Robust growth for the industry has come on the back of strong consumer confidence,” noted Mr Tan Hak Leh, the President of the Life Insurance Association. “The economy is in good shape and we are optimistic that the life insurance industry will remain strong throughout the rest of 2011.”

Health insurance sales continued to fare reasonably well. As at 31 March 2011, a total of 2.38 million lives were covered by health insurance with paid up premiums amounting to $778 million. However, new business health insurance sales dropped by 13 per cent to $35 million compared to the same quarter of last year. The bulk of this - 86 per cent - went to Integrated Shield Plans and riders. “Despite the dip in sales, we are seeing increasing consumer awareness of the need for medical coverage in the face of rising medical costs,” said Mr Tan.

Distribution Channels

Tied agents contributed to nearly half of the new business, bringing in 48 per cent of weighted new business sales for the first quarter of the year.

New business sold through banks gained notable ground, registering 37 per cent of sales for the current quarter, up by 14 percentage points from that achieved in the same period of previous year. This is a record high in five years. Financial Advisers contributed 12 per cent of sales whilst other channels, which include direct sales, made up the remaining 3 per cent.

Product Classification

Of the new sales, participating (“par”) products accounted for 57 per cent while non-par products accounted for 21 per cent. Investment-linked products made up the remaining 22 per cent.

Product License Classification

As at 31 March 2011, 95 per cent of new sales were contributed by insurers holding “Normal” licenses. The “Defined Market Segments” (DMS) insurers, represented by four companies, contributed the remaining 5 per cent.

Claims Payout

Up to end March 2011, the life insurance industry paid out a total of $1.39 billion to policyholders and beneficiaries. Of this, $88 million was in respect of death, critical illness or disability claims whilst the remaining $1.30 billion was for policies that matured.

Fact-Find Experience

During the first quarter of this year, 77 per cent of life insurance applications were completed with a full or partial fact-find, an improvement of 11 per cent over the preceding period. Observing that the fact find experience has been improving since 2010, the industry was heartened to know that consumers appreciate the value and benefit of going through a fact find exercise with their financial advisers when considering appropriate policies for their needs.  

Group Insurance

Total annual premiums in force for group insurance business rose by 9 per cent, amounting to $607 million.

Assets

As at end of 2010, the life insurance industry was managing assets** of approximately $117.7 billion, up 8 per cent compared with a year ago. Assets of non-linked business accounted for $92.9 billion, whilst the remaining $24.8 billion were assets held for investment-linked policies.

** Source: MAS website

Manpower in the Industry

A total of 4,910 office staff were employed by member companies of the LIA and 12,869 representatives held exclusive contracts with companies that operate a tied agency force.