Singapore’s Insurance Industry Grows
By Thomas | Published November 05, 2010
There are more signs that the Asian economy is leading the way in global financial recovery, with the Singaporean life insurance industry announcing robust earnings during the third quarter of 2010, including a 17 percent growth in new insurance sales during the first nine months of this year.
The not-for-profit Singaporean trade body – Life Insurance Association (LIA) – which is licensed by the Monetary Authority of Singapore – released figures for the first 9 months of 2010. The figures demonstrated an increase in life insurance sales of 17 percent over the same period last year, with total insurance premiums registering SGD$1.125 billion (US$878 million) up from SGD$963 million (US$751 million).
The strong performance by the life insurance industry in Singapore comes as the Island and the Asian region enjoys healthy economic conditions and increasing demand for life insurance protection as the economy stabilizes.
LIA President, Mr Tan Hak Leh, commenting on the sales growth said: “The strong showing came largely on the back of robust annual premiums sales during the period under review,” adding “We are optimistic that the trend will continue with the year ending on a high note.”
Over the nine month period Singapore’s life insurance market, generated annual premiums amounting to SGD$763.7 million (US$595 million), which is a 22 percent improvement in sales so far this year; the Singaporean life insurance market has seen improvements in this sector of business in each of the three successive quarters in 2010.
The single premium sector within the Singaporean life-insurance market also experienced a significant increase with total sales reaching SGD$361.9 million (US$282.2 million) reflecting a total improvement of 7 percent year-on-year.
A total of SGD$115 million (US$89.7 million) was generated by health insurance sales in the third quarter of 2010 representing an 8 percent increase over the same period last year. The health insurance sector in Singapore has been affected by rising healthcare costs across the island nation, with residents recognizing and acting on the potential need for medical protection. The majority of new Singaporean health insurance sales were generated through integrated plans and rider policies, which accounted for 85 percent of total health insurance sales.
In September 2010, there were a total of 2.32 million people in Singapore covered by private health insurance amounting to a total of SGD$719 million (US$561 million) in premiums.
The positive position for Singapore’s insurance industry follows UK-based insurance giant Aviva reporting an 80 percent growth in its Singaporean insurance operations in the third quarter of 2010, accounting for SGD $984 million (US$ 769 million) in premium income for the group. Recognizing the increasing demand for health insurance in Singapore, Aviva adopted a rigorous marketing campaign, which paid dividends for the British based insurers.
Local based insurer Great Eastern is one of the market leaders within Singapore’s insurance industry. The Great Eastern Group reported a profit of SGD$ 442.1 million (US$ 344.7 million) for the third quarter of this year compared to SGD$368.3 million (US$287.2 million) during at the same period in 2009. Great Eastern results were driven by strong sales of regular premium protection products, which were 30 percent higher than last year because of the strong performance achieved through their Singaporean distribution channels. However, Manulife reported a less positive position in the Singaporean insurance market, largely due to the collapse of partnership arrangements with a local distribution channel; this was offset by more positive results in the Asian region generally where sales totaled US$293 million for the third-quarter of this year.
Singapore’s insurance industry is home to some of the major multi-national insurers such as AXA, China Life Insurance, Manulife, Prudential, Zurich, Ace and Allianz. It is one of the most mature insurance sectors in the Asian region, with strong foundations and a solid economy, which has stabilized since the 2007-2008 global financial crises. The results in 2010 have provided insurers with strong premium returns. The growing demand for Singaporean protection products offers particular scope for insurers in the healthcare sector due to the need for individuals to cover rising medical costs.
Insurance Companies Mentioned:
Great Eastern is the oldest and most established life insurance group in Singapore and Malaysia. With $50.9 billion in assets and 3.8 million policyholders, it has two successful distribution channels – the tied agency force and bancassurance. The Company also operates in China, Indonesia, Vietnam and Brunei.
Manulife (International) Limited is a member of the Manulife Financial group of companies. Manulife Financial is a leading Canadian-based financial services group serving millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners.
Europe’s fourth largest insurance company, with more than 300 years of experience in the global insurance industry, Aviva is committed to the safety and satisfaction of its customers. They sell a broad range of insurance products including motor and property insurance, protection and health insurance, business insurance, life insurance and pensions