Check out Singapore's largest insurers in 2018

Total assets of the 50 largest insurance providers in the city hit S$232b, up by 13.73% from the previous year’s $204b.

Singapore Business Review’s annual survey of the insurance sector revealed that total assets of the 50 largest insurance providers in the city hit $232b, up by 13.73% from the previous year’s $204b.

The country’s five largest insurers are led by The Great Eastern Life Assurance Company Limited with $49b in assets, up from $32b in the previous year. Great Eastern replaced AIA Singapore Private Limited, which fell to second place with $44b in total assets. Meanwhile, Prudential Assurance Co. Singapore, fell down a notch to third place with $37b in total assets. NTUC Income Insurance Co-operative Limited retains its rank at fourth, with $34b in total assets, a $3b increase from last year. Manulife Singapore also maintained its rank at fifth, with a total of $9b in assets. IPs are in the Life Insurance Association, Singapore (LIA Singapore) reported that Singapore’s life insurance industry accumulated $3.17b in weighted new business premiums from January to September 2018, a 15% increase from the same period last year. Of the new business premiums, 92% or $292.2m were traced to IP and IP rider premiums, whilst the remaining 8% or $26.5m was from other medical plans and riders.

Compared to 2017, there are now 70,000 more Singaporeans and Permanent Residents covered by IPs, resulting in a total of 2.7 million individuals covered by IPs in Singapore. According to LIA, this is approximately 68% of all Singapore residents, a number far exceeding the MediShield Life component. Positive trends in the industry mean a better outlook for the $893b protection gap that needs to be bridged in Singapore, as reported by the Association Protection Gap Study in 2017. The protected gap was measured from a 40% mortality and critical illness divide amongst Singapore’s economically active individuals.

“Even though we are experiencing some headwinds due to the trade wars, it is reassuring that more Singaporeans are taking active measures to have their protection needs met. As an industry, we aim to develop more targeted public programmes so that we can continue to narrow the underinsurance gap and help Singaporeans adequately protect their quality of life for themselves and that of their loved ones. There is much more we can do for the betterment of society,” said Patrick Teow, president, LIA Singapore.

Whilst enjoying the benefits brought about by improved life insurance packages, Singaporean residents can also rest in the fact that car insurance in the country is cheaper than those of its counterparts across the world. Whilst many bemoan the costs of owning a car in Singapore, insurance in the city is actually far cheaper at $862 compared to New York’s $4,097, London’s $2,321 and New South Wales’s $1,257. South Korea has lower car insurance than Singapore at $465. 

Meanwhile, the General Insurance Association of Singapore (GIA) also reported flat growth for 1H2018, with a marginal increase in total gross premiums that amounted to $2.07b. Meanwhile, underwriting profits declined in the same period by 94.5% to $3.14m, on the back of increased claims costs across key segments such as motor insurance and work injury compensation (WIC) insurance.

“There is a need for greater collaboration between our sector and other stakeholders, focusing on areas such as improving efficiencies through digitalisation, as we continue to ensure effectiveness and accessibility of insurance products. This is in keeping with the Industry Transformation Programme, ensuring sustained growth and competitiveness of the economy by working closely with the government and private sectors to address issues within each sector; as well as realising our vision of becoming a global insurance marketplace,” said Karl Hamann, president, GIA.

Despite the trends for motor and WIC insurance in the first half of the year, Singapore’s health insurance segment’s gross premiums increased by 11% to a total of $322.9m amidst persistent healthcare inflation in the country. Underwriting losses for healthcare insurance improved by 9.3% to $12.7m. Other segments seem to be experiencing the same ups and downs that the entire industry is facing.

Boost in workforce
In addition, the growing population of insurance and digital savvy consumers are also resulting in the growth of financial advisors channels, as bancassurance and traditional agents remain dominant in the distribution of life insurance policies.

The sector’s workforce expanded with a net increase of 330 employees and 206 tied representatives in 3Q2018, a 4% and 2% respective increase from the previous quarter.

Greater demand for technology-driven insurance services have also opened up new positions in data analytics, cybersecurity, and business operations, amongst others. Over a period of just twelve months, member companies employed an additional 954 employees to add to a total of 8,001 individuals at the end of the third quarter of 2018.

New threats
Despite the relatively healthy increase in assets, insurers in Singapore still need to prepare for a new battle as giant tech companies such as Grab enters the scene in its latest partnership with Chinese Internet-based insurer ZhongAn Technologies International Group (ZA International). Together, they will make a digital insurance marketplace offering innovative insurance products in a range of categories with fractionalised premiums to users directly through Grab’s mobile app.

Set for launching in Singapore by H1 2019 before being rolled out to other markets, the platform will allow eligible driver-partners to access the insurance under ‘GrabBenefits’ in the drivers’ app.

“The tie-up will address the usual pain points of insurance discovery, unaffordable premiums and payment options by allowing for insurance premium payments to be adjusted and automatically deducted through GrabPay or its affiliate payment partners,” the firms said in a joint statement.

Looking forward
Despite being one of the last industries to fully embrace digital innovation, the insurance sector has made great strides to help realise Singapore’s SmartNation ambition. LIA Singapore expects more digital initiatives to be introduced by the industry players and boost productivity, enhance customer services, and ensure security of data and personal information.

“The industry will not let up in its complementary efforts to ensure that the quality of life in Singapore improves, responding to rapid demographic shifts in Singapore, rising incidences of chronic illnesses and healthcare costs inflation,” Teow added.

Across the region, demand for life insurance will remain stable according to Moody’s, who also reported that asset risk is on the rise due to increasing allocations to higheryielding non-traditional assets and widening currency mismatches. As a result, regulators are implementing changes to enhance both capital and internal risk management whilst also pushing for better capital standards. Moody’s added that the implementation of IFRS 17 will be a key focus for insurers, in an aim to promote transparency for insurance contracts.

“Whilst the changes are expected to be gradual, insurers are stepping up their efforts to improve assetliability management and internal risk management, as well as embed capital analysis in their daily product offerings and asset allocation decisions,” Moody’s reported.