Life insurance sales jump 20% in Q2

SINGAPORE – Life insurers chalked up a 20 per cent rise in weighted new business premiums in the second quarter, driven by an increased take-up of single premium non-linked products such as endowment policies, as consumers sought stability amid increased volatility in the investment market.

For the three months ended June, life insurers booked a total of S$844.9 million in weighted new business premiums, compared with the S$703.3 million achieved in the corresponding period a year earlier, the Life Insurance Association Singapore (LIA Singapore) said yesterday.

Compared to the second quarter last year, the industry recorded a 54 per cent increase in weighted single premiums to S$282.1 million, driven by non-linked plans, which more than doubled to S$230.2 million.

In comparison, weighted new business single premiums for linked products fell 25 per cent year-on-year to S$51.9 million. The industry also recorded an 8 per cent year-on-year increase to S$562.8 million in weighted annual premiums.

The shift in preference from single premium investment-linked products to non-linked products — which are geared towards protection and savings and include endowment, whole life and universal life policies — comes as consumers become more risk averse amid the current market volatility, LIA Singapore said, adding that there was also an increase in the uptake of Integrated Shield Plans (IPs) and IP riders.

For the whole of last year, weighted new business sales for single premium linked products rose 22 per cent versus 6 per cent for non-linked products. In comparison, for the first half of this year, that for linked products has plunged 20 per cent while non-linked plans increased 51 per cent.

“We are encouraged by the strong first half results which reflects the industry’s ability to adapt and introduce innovative products for policyholders in today’s fast-changing macro-economic environment,” said Dr Khoo Kah Siang, President of LIA Singapore. “The results also show that Singaporeans recognise the value of health insurance and we, as an industry, are committed to ensuring that medical coverage remains affordable for all.”

In the first half of 2016, total weighted new business premiums increased 13 per cent year-on-year to S$1.52 billion. New health insurance premiums, excluding MediShield Life premiums, totalled S$106 million, of which 84 per cent were IP premiums and IP riders, while the remaining 16 per cent consisted of other medical plans and riders.

As of end-June, 2.86 million individuals are covered by health insurance with total premiums amounting to S$1.32 billion.

“The life insurance industry is expected to be resilient amidst continuing economic challenges and uncertainties faced by major economies and a sluggish domestic economy as individuals should be seeking to ensure that they are adequately protected and remain protected as a priority in managing their finances,” said LIA Singapore.