Singapore aims to become an insurance hub in Asia. The finance and insurance sector’s gross domestic product has steadily increased in recent years. The insurance industry is regulated by the Monetary Authority of Singapore (MAS) under the Insurance Act. It divides the insurance business into two categories: life insurance and general business or non-life insurance. The number of insurance companies has been increasing, especially in the last three years, with captive and direct insurers leading the industry.
Life & non-life insurance in Singapore
Life insurance policies ensure that the beneficiary receives payment in the event of the policyholder’s death or terminal illness. On the other hand, non-life insurance covers a multitude of other areas, including motor, property, employers’ liability, and marine hull. The penetration rate of life insurance is the highest out of the insurance business categories, reaching 7.5 percent. Over the past few years, the value of annual life premiums has been growing steadily, peaking at almost 25.5 billion Singapore dollars in 2021. In the same year, the number of new life insurance policies reached a significant peak, due to the COVID-19 crisis period. According to the General Insurance Association of Singapore (GIA), this can be explained by the consumers’ desire to protect their assets against changing risks due to the pandemic. As for non-life insurances, motor insurance companies lead the sector in terms of gross written premiums, with a value of about 1.07 billion Singapore dollars.
Shift in consumer behavior
A shift is occurring in consumer preferences in recent years. Driven by the COVID-19 impact, this shift has accelerated the digital transformation of the sector. Insurance buying tendencies are increasingly shifting toward digital channels, with a growing preference for websites and mobile apps, while traditional channels are experiencing a decline. In a market where millennials may be disinterested in these products, whether it be due to price or because they feel they haven’t reached that stage of life yet, new insurance technology tools could help companies reach this demographic. Singapore, in its drive to become a regional industry leader, has established the Global-Asia Insurance Partnership (GAIP). This partnership brings together leading insurance companies, regulators and academics to address structural protection gaps and future risks such as cyber risks and climate change-related issues. The platform aims to produce research, policy recommendations, and innovations for the region. In July 2021, Great Eastern Life launched Singapore’s first green life insurance product, while Singlife with Aviva started a collaboration with CO2 Connect to develop a new green motor insurance for electric vehicles since November 2022.
