The total weighted new business premium for July to September was $751m compared with $562m, a year ago. Sales of annual premium products grew 33% while that of single premium products rose 36%.
Over a nine-month period too, the industry recorded a 27% jump in the new business premium, hitting the $2bn mark. Single premium and annual premium product sales rose 17% and 31%, respectively during the period.
"We’ve seen three straight quarters of growth this year," said Khoo Kah Siang, president, Life Insurance Association.
"Growth in both annual premium and single premium products is indicative of encouraging market sentiment and strong consumer confidence in life insurance," Siang added.
Participating products accounted for 53% of new sales, while non-participating products represented 31%.
During a press conference, Chris Gill, deputy president of the LIA highlighted the gradual decline in share of sales of investment-linked products from 22% in 2011, to 19% and 16% in 2012 and 2013, respectively.
"This is the reflection of consumer behaviour and uncertain economic environment, but the confidence is coming back,” Gill said.
The so-called defined market segment of Singapore’s insurance industry, which is comprised of six companies, including the likes of Friends Provident International, Generali, Royal Skandia, Transamerica and Zurich International, accounted for 4% of sales in the first nine months of 2013. Companies with "normal" licenses generated the rest, a share that has remained relatively consistent for some time.
The defined market segment is so-called because it caters for a high net worth market that is defined by a minimum premium size, and its members are not permitted, under their licences, to handle CPF business.
Other key indicators as detailed by LIA for January to September:
- The total sum assured for new business increased by 4% to reach $59bn
- New health insurance premiums shot up by 132% in the first nine months to $320m compared to the same period last year.
- Tied agents continued to be one of the main channels of distribution for new business. By policy count and weighted premiums, tied agents contributed 61% and 45% of the business respectively
- Banks accounted for 34% of weighted premium sales and 15% of the total number of policies sold
- Financial advisers contributed 17% of weighted premium sales and 10% by policy count.
- Up to September-end, industry paid total claims of $5.86bn to policy holders and beneficiaries.
Outlook and FAIR response
In light of a more optimistic economic outlook, the industry is expecting the uptrend in new sales growth into the close of the year, LIA said.
In the wake of the MAS’s Financial Advisory Industry Review, Khoo said the association and its members will collaborate with the regulator to implement the recommendations in a practical manner so as to improve the quality of advice provided by the financial advisers and enhance transparency and information on key aspects of products so that consumers can make informed choices.
This can be achieved through structured training programmes, and fair and equitable rewards structure that is linked to the services they provide to their customers, the association said.
Click here to read the latest on the FAIR review https://ia-live.onyx-sites.io/news/tax—regulation/singapore-ifas-welcome-regulator-response
