SINGAPORE’s life insurance industry recorded nearly S$1.6 billion in weighted new business premiums for the fourth quarter, representing a year-on-year growth of 11.1 per cent.
This was driven by the uptake of annual premium policies, which grew 27.9 per cent to S$1.2 billion for the quarter, said the Life Insurance Association Singapore (LIA) on Thursday (Feb 13).
However, total weighted premiums for single-premium policies fell 26.3 per cent to S$322.6 million in the fourth quarter, the only period last year that saw a decrease in uptake of such policies.
The strong growth in the annual premium business brought weighted new business premiums for the full year to nearly S$5.9 billion, representing a year-on-year growth of 19.7 per cent.
A key driver of growth for last year was investment-linked plans (ILPs), which surged 41 per cent on the year to nearly S$2.3 billion from S$1.6 billion.
LIA noted that “more consumers are leveraging ILPs for wealth accumulation” amid economic uncertainty and rising interest rates as these policies provide life insurance protection while potentially offering higher returns.
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Non-participating products also had an uptick in sales of 19.2 per cent on the year to S$2.2 billion from S$1.8 billion. Sales of participating products, however, dipped slightly by 2.7 per cent to S$1.4 billion.
LIA president Dennis Tan said: “While interest rate volatility and geopolitical uncertainties continued to pose challenges in 2024, the (life insurance) sector has remained resilient and agile.”
He added that the industry’s recovery last year “has set a strong foundation for continued growth”.
LIA noted a 1.8 per cent increase in the number of lives covered by health insurance. As at end-December, about 40,000 more Singaporeans and permanent residents were covered by integrated shield plans (IPs).
Total new business premiums for individual health insurance amounted to S$624.8 million for the full year, representing a year-on-year increase of 41.6 per cent.
IPs and IP rider premiums accounted for 89 per cent (S$556.6 million) of this figure, with the remaining 11 per cent (S$68.2 million) comprising other medical plans and riders.
In 2024, more than S$18 billion was paid out by the life insurance sector to policyholders and beneficiaries, up 33.4 per cent from the year before.
The majority – about S$16.2 billion – was for policies that matured. The remaining S$1.9 billion was for death, disability or critical illness claims.
Tan said the industry remains “cautiously optimistic” about the outlook for this year. He anticipates growth to be driven by increasing consumer awareness of the importance of insurance, rising demand for sustainable insurance products and investments, as well as ongoing digital transformation.
Tan also acknowledged the need to address the persistent challenge of medical inflation, which is driven by a multitude of factors such as an ageing population and escalating costs of advanced medical treatments.
“Ultimately, keeping healthcare premiums affordable is a shared societal responsibility – one that requires collaborative action from insurers, the medical community, policymakers and consumers.”
