Singapore life insurance new business premiums down by 5.9% in Q3
However, take up for new policies picked up by 12.8% in the quarter.
Singapore’s life insurance weighted new business premiums went down by 5.9% to $$3.87b in the third quarter of 2022 compared to a year ago, a report by the Life Insurance Association of Singapore said.
The take up of new policies, however, increased by 12.8% to 1.48 million in Q3. Online sales of new policies shot up to 603,116 in Q3 2022 compared to 370,528 in YTD 3Q 2021. These online purchases totalled $106m in weighted premiums, accounting for 2.7% of the weighted new business premiums in the quarter.
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Uptake of annual premium products increased by 7.2% in Q3 2022 as compared to Q3 2021, an increase of $48.9m in weighted new business premiums. This narrowed the gap between year-to-date (YTD) Q3 2022 at $1.91b and YTD Q3 2021 at $2.07b.
Single-premium products, however, recorded a decrease of 31.7% in weighted premiums in Q3 as compared to last year. This translated into a 3.9% YoY dip in weighted premiums in the quarter. The decline is primarily attributed to the volatility in the global equity markets that affected investment-linked products and rising interest rates that intensified the competition for shorter-term endowment products with other financial products in the market.
Meanwhile, total new business premiums for individual health insurance for Q3 2022 amounted to $255.8m. Overall, IPs and IP rider premiums accounted for 84.5% ($216.2m) and the remaining 15.5% ($39.6m) comprised other medical plans and riders.
IPs covered about 40,000 more Singaporeans and Permanent Residents from the same time a year ago. In total, 2.88 million lives – approximately 70% of Singapore residents – are protected by IPs, which provide coverage on top of MediShield Life.
Between January to September 2022, the life insurance industry paid out $8.71b to policyholders and beneficiaries, an increase of 14.8% compared to the same period last year. Of this amount, $7.57b was for policies that matured. The remaining $1.14b was for death, total and permanent disability and critical illness claims.
According to Khor Hock Seng, President of LIA Singapore, geopolitical uncertainty, volatile and uncertain macroeconomic environment, and sustained inflationary pressures coupled with rising costs of living have impacted the overall demand for life insurance products in the third quarter of 2022.
“Our immediate priority is to support individuals and families in Singapore as they review their long-term protection and financial priorities, especially in these challenging times. The recent inclusion of a consolidated view of insurance policies on the Singapore Financial Data Exchange (SGFinDex) will also enable us to play a bigger role in helping them in financial planning,” the president added.