The life insurance industry in Singapore recorded a 13% y-o-y decline in sales in the first six months of the year, according to industry results for the period January to June 2020 from Life Insurance Association, Singapore (LIA Singapore).
Singapore’s life insurance industry recorded a total of S$1.66 billion in weighted new business premiums in 1H2020.
The ongoing recession stemming from the COVID-19 pandemic has resulted in demand- and supply-side shocks to the Singapore economy. The life insurance sector was not exempted from subsequent economic repercussions, which has impacted results for the period of April – June 2020 (2Q2020).
Annual premium business in Q2 only half of same period last year
1H2020 encompassed both ‘Circuit-Breaker’ and ‘Phase 1’ periods where strict social distancing measures were enforced. As a result, annual premium business recorded a 25% drop from the same period last year. This amounted to a total S$1.04 billion in total weighted annual premiums.
Sales for the second quarter was significantly impacted – the amount of premiums collected was only half of the level in the same period last year.
Single premium rose 17% y-o-y in 1H2020
The silver lining came in the form of increased single premium sales which helped cushion the impact caused by the decrease in annual premium business.
In 1H2020, a 17% year-on-year increase in weighted single premiums amounting to S$622.9 million in total was achieved.
a) Single premium par and non-par products comprised 75%; single premium linked products made up the remaining 25%
b) CPFIS-included products comprised 16%; cash-funded products took the remaining 84%
More short-term single premiums products were sold in tranches. These products are simple to understand, and they do not require medical underwriting. Representatives were able to bring customers through the sales process electronically and close sales despite the challenging situation.
The total sum assured for new business rose by one per cent year-on-year, amounting to S$65.7 billion in 1H2020.
Mr. Khor Hock Seng, President, LIA Singapore, said: “Since the beginning of the COVID-19 outbreak in Singapore, the life insurance sector has and continues to work closely with the relevant authorities to ensure Singaporeans receive the protection they need during this challenging period.
“Proactive support measures such as the Deferred Premium Payment scheme which allows premium payments to be deferred up to six months, complimentary access to telemedicine services, and supplementary activities to encourage healthy living during the circuit-breaker period are just some of the initiatives put in place to help Singaporeans cope with the changes to their financial situation and lifestyle needs.”
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