15 February 17 The Business Times by CLAIRE HUANG
SINGAPORE'S life insurance industry reported growth on all fronts in the fourth quarter of last year, as insurers turned their focus towards narrowing the protection and retirement gap, which in turn drove sales up.
For the three months to end-December, total weighted new business sales, a growth measurement, rose 15 per cent year on year to S$955.3 million on the back of the rise in sales of annual-premium products. (These are policies for which customers pay an annual fee over a long period.)
Weighted new sales of annual-premium products, including whole-life policies, rose 20 per cent year on year to S$661.1 million.
Weighted new sales of single-premium products, such as endowment and savings plans, went up by 4 per cent to S$294.2 million, driven by stronger performances of linked and non-linked plans.
Sales of linked plans or investment-linked products (ILPs) rose 10 per cent to S$67.3 million; that of non-linked plans improved by 3 per cent to S$226.9 million.
Correspondingly, total weighted new business sales for the full year rose 10 per cent to S$3.29 billion.
This, as sales of annual-premium policies, the bulk of the total new sales, increased by 10 per cent to S$2.26 billion.
On the single-premium side, weighted new sales for the year climbed 9 per cent, mainly due to the 15 per cent rise in non-linked plans, which was partly offset by the 7 per cent fall in linked policies' sales.
The focus on protection and retirement needs meant that in FY2016, total sum assured for new business grew 15 per cent to S$117 billion.
Participating policies contributed 52 per cent of total new sales; non-participating plans accounted for 34 per cent and ILPs made up the other 14 per cent.
In particular, new health insurance premiums came up to S$241 million for the year, of which 86 per cent were Integrated Shield Plans (IPs) premiums and IP riders. The remaining amount came from other medical plans and riders.
The Life Insurance Association Singapore (LIA) on Tuesday said more than 50,000 Singapore residents bought private health insurance coverage, mainly through IPs and IP riders. As at end Dec 2016, 2.89 million lives - about one in two individuals here - were covered, bringing total premiums to S$1.42 billion.
Data from LIA also showed that bank distribution continued to dominate, with its total weighted premiums at 38 per cent in 2016.
Tied agents remained on its downward trend at 37 per cent; financial advisers continued to go up to 21 per cent. The remaining four per cent came from other products that are sold without intermediaries, such as direct-purchase insurance and ElderShield.
LIA president Khoo Kah Siang cited two key areas of focus for the industry for the year ahead: keeping a lid on rising healthcare costs and looking at issues surrounding digitalisation.
Specifically on healthcare issues, he said LIA has set up an internal committee to look into implementing the recommendations by the Health Insurance Task Force (HITF), including that of pre-approving treatments for medical coverage.
Revision of the benefit illustration is still a work-in-progress, Dr Khoo said, adding that details would be available in the second half of the year at the earliest.
He said: "We recognise that the economic and global environments are a bit uncertain... Nevertheless, for insurance, we still recognise that there is still a gap in the market and, based on our historical record, we seem to be able to grow despite the challenges.
"So I think we are conservatively positive on the outlook in terms of the industry and we believe we can continue to grow in 2017 and hopefully create more jobs as well."