Monetary Authority of Singapore tells insurers to remain vigilant

In a speech by Mr Low Kwok Mun, the Executive Director stressed the need for insurers to strengthen their risk management capabilities and corporate governance.

During the Life Insurance Association of Singapore Annual General Meeting Luncheon held 3 March 2010, Mr Low Kwok Mun said, "Compared with a year ago, the outlook for the Singapore insurance industry is now very different. The volume of new business has since rebounded to levels before the financial crisis and asset values have largely recovered. While global financial markets continue to recover, we should remain vigilant against the risks that remain in both the global financial system and wider economic environment. Life insurers should continue to fine-tune their risk management systems and take pre-emptive measures against potential stresses in the markets."

He urged the industry to review how the protection gap can be addressed to better meet the needs of consumers and improve the transparency of the sale of life insurance products.

"In 2009, when the investment markets were underperforming, life insurers had adapted their business strategies to focus on selling term life and health insurance products. Such protection plans are needed to address the significant protection gap amongst Singaporeans," he said.

Health insurance sales in 2009 increased 31 percent to S$146 million compared with 2008 while total new business premiums dropped 20 percent to S$7.7 billion last year.