By Iris Lai, Hong Kong bureau manager
Singapore's life insurance industry saw a 43% increase in weighted new business to S$315 million (US$228 million) in the first quarter, supported by a rebound in new polices sales.
"Improving consumer sentiments, stronger economic recovery and positive market conditions augur well for the industry," said Hak Leh Tan, president of the Life Insurance Association of Singapore. This growth trend is expected to continue throughout 2010, he said in a statement.
Weighted new business is calculated as 10% of single premium income plus 100% of annual premium income adjusted for premium payment terms of less than 10 years.
Sales of single premium products such as endowment and investment-linked policies rose 56% to A$1.01 billion in premiums for the first three months of 2010. New regular premium policies jumped 40% to A$244 million in premiums, according to the association.
This year's growth should be viewed against the fallout from the global financial crisis in the first quarter of 2009. "The downward slide in sales at that point in time was swift but thankfully short-lived," said Tan. The life insurance sector is "now in that position where we are seeing strong year-on-year growth," he added.
In the first quarter, the overall share of investment-linked products sales in the market increased to 27%, up 5% from the previous year. Sales of linked products are "gaining momentum in tandem with improving market sentiments," said the association.
Health insurance sales amounted A$41 million in this first quarter, up 69% from the previous year. Increasing consumer awareness of medical protection against rising medical costs contributed to growth in new health policies.
The average insured sum was A$42,698 for single premium and A$43,507 for regular premium policies. The association said both figures indicated "Singaporeans are still under-insured."
The life insurance industry managed total assets of A$108.9 billion as of the fourth quarter of 2009, up 18% from a year earlier. Non-linked insurance assets amounted A$85.2 billion and investment-linked assets were A$23.7 billion.
Tied agencies was the major distribution channel for the life insurance sector, accounting for 58% of new business sales. Bancassurance sold 23% of new life business in the first quarter. Licensed financial advisors contributed to 13% of new products sales and direct sales networks accounted for the remaining 6%.
Singapore has 15 life insurance companies including four insurers with a defined market segment, according to Monetary Authority of Singapore. The life association's members employed 4,857 office staff and 13,581 representatives held exclusive contracts with companies that operate a tied agency force.
(By Iris Lai, Hong Kong bureau manager: Iris.Lai@ambest.com)
From insurance news net.com published on May 10, 2010
