Sales of single-premium life insurance policies grow 28% in Q4

SINGAPORE — Life insurers chalked up a 28 per cent rise in single-premium policies in the fourth quarter, providing a boost to growth performance for the sector.

Helped by policies paid for with Central Provident Fund monies, new sales of single-premium products jumped to S$281.9 million from S$219.8 million in the corresponding period a year ago, said the Life Insurance Association Singapore (LIA) yesterday.

New sales of the annual premium segment showed a 1 per cent growth for the October to December period, at S$550.3 million from S$544.5 million a year ago. Overall weighted new business sales for the fourth quarter were at S$832.2 million, 9 per cent higher compared with a year ago.

For the full year, single-premium and annual-premium products were at S$940.8 million and S$2.1 billion, up year-on-year by 9 per cent and 7 per cent respectively, bringing total overall weighted new business sales for the full year to S$3 billion. The total sum assured for new business increased by 14 per cent to S$101.2 billion for 2015 compared with a year ago.

Launched in April last year, DPI products — commission-free life insurance policies that offer basic protection — have drawn approximately S$550,000 of weighted new premiums, or 646 policies, as of the end of December, said LIA.

“The life insurance industry saw healthy growth across all types of businesses and provided new protection cover totalling S$101.2 billion compared to 2014, which represents a 14 per cent increase in new business sum assured.

“2015 has been a purposeful year for life insurers in Singapore as we focused on implementation of the key Financial Advisory Industry Review (FAIR) initiatives — compareFIRST, Direct Purchase Insurance (DPI) products and Balanced Scorecard for financial adviser representatives,” said Dr Khoo Kah Siang, who is the president of LIA Singapore.

As of the end of last year, the life insurance industry paid out a total of S$5.97 billion to policyholders and beneficiaries.

Of this amount, S$5.20 billion was for policies that matured. The remaining S$771 million was for death, critical illness or disability claims, said LIA. Tied representatives continue to be the main channel of distribution for life insurance in Singapore, added the association.

The health insurance business fell by 13 per cent last year compared with 2014, with new health insurance premiums totalling S$231 million, of which 88 per cent went to Integrated Shield Plans (IPs) and IP riders. LIA said that the performance in 2014 had carried the impact of insurers’ pricing revisions in March 2013.

Approximately one in two individuals in Singapore, or 2.83 million lives, have health cover, with total premiums amounting to S$1.75 billion as of the end of last year.

“This reflects steady growth over the years, with an increase from 2.75 million insured lives and total premium of S$1.58 billion over the corresponding period in 2014,” said the association.

Insurers said they expect further growth as they work together with the authorities in complementing MediShield Life plans, which replaced the old MediShield scheme in November last year. For this year, the industry said it will continue to monitor and fine-tune the implementation of FAIR initiatives to ensure that the objectives and outcomes are aligned.

“Insurers that issue Integrated Shield Plans (IPs) have been working closely with the Ministry of Health to implement MediShield Life … For insurers with IPs, the key priority remains to work on achieving more effective management of ever-rising healthcare costs in Singapore, if health insurance is to remain largely affordable,” said Dr Khoo.

Dr Khoo added that the details of the standard class B1 Integrated Shield plan will be announced soon.