Singapore life insurance industry registered 3% growth rate in 2008 amidst economic downturn on the back of rising demand for annuities and organized distribution channels.
As per the Life Insurance Association of Singapore, the nation’s insurance industry recorded 3% growth rate in 2008, taking new business premiums to S$1.71 Billion (US$1.11 Billion), as reported by Tmcnet.
Singapore life Insurance industry generated S$995 Million worth annual premium sales in 2008, an increase of 21% since 2007. Single premium policies sales declined 14% to register S$7.64 Billion in 2008. Out of this, the central provident fund investment scheme (CPFIS) generated S$2.77 Billion or 36%. Moreover, domestic annuity sales in 2008 surged 38% to S$554 Million. In 2008, licensed financial consultants contributed 8% of Singapore’s total insurance sales, while other sources such as direct sales comprised the rest of 4%.
According to the Association, strong demand for annuities as an important retirement income source played critical role in the growth of this segment. Regarding distribution, the Association stated that the associated agency channel was responsible for bulk of the new business, and the financial advisers contributed above 50% of new business premium sales in 2008.
Moreover, the life insurance sector has pulled through the economic crisis without much damage and gained from the fast recovery in asset values. The external environment is becoming more aggressive and rates are down. All these factors have a direct impact on the premium results.
Further, the people of Singapore decide on a specific life insurance policy only after thoroughly examining all the salient services offered by the particular insurance agent. Obviously, the main purpose of a life insurance policy is to make certain that clients are fully insured in the event of all medical emergencies so that they can take advantage of the world-class medical services.
As per a Research Analyst at RNCOS, “The life insurance industry in Singapore appears promising as it has tackled the economic crisis by bringing down crediting bonus rates and expenditure levels. But unlike to several neighboring markets, Singapore’s life insurance industry is matured and provides very little scope for growth, leaving very limited space for newcomers.”
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