Advertisements

Singapore Life Insurers Target 2025 Growth

by Celia

Singapore’s life insurance industry, buoyed by a strong recovery in 2024, is set to continue its upward trajectory into 2025. Industry experts attribute this optimism to rising demand for sustainable insurance products and ongoing digital transformation within the sector. However, the industry faces hurdles such as escalating healthcare costs, which could pose a challenge for long-term growth.

Dennis Tan, president of the Life Insurance Association of Singapore (LIAS), expressed a positive outlook for 2025, citing continued growth prospects despite macroeconomic uncertainties. “I look forward to a positive 2025 and a good outlook,” Tan said in an interview with Insurance Asia. “The protection gap remains, but there is growing public awareness, with more people taking action to secure their families’ futures.”

Advertisements

Tan noted that premiums for the first nine months of 2024 had already reached 88% of total premiums for 2023, signaling a strong year ahead. Despite challenges such as inflation and geopolitical tensions, the industry has demonstrated resilience, adapting to changing consumer demands.

Advertisements

The industry’s recovery began in the second half of 2023, though premiums for the full year showed a 3.9% decrease compared to 2022, according to LIAS data. The nation’s ageing population remains a key focus for life insurers, with projections indicating that by 2030, one in four Singaporeans will be aged 65 or older.

“This demographic shift is pivotal, and the life insurance industry must continue evolving to meet the needs of an ageing population,” Tan said.

A key challenge for insurers is addressing the rising costs of healthcare, which are expected to increase by 12% in Singapore this year. The broader Asia-Pacific region is also anticipating higher medical costs. Tan highlighted the need for collaborative solutions, noting that addressing medical inflation is not something that can be tackled by one entity alone. “It requires a whole-of-ecosystem partnership,” he said.

In response, Singapore’s life insurers have introduced innovative approaches such as claim-based pricing, which rewards healthy policyholders for maintaining good health. This is seen as a strategy to incentivize healthier lifestyles while managing medical costs.

Government-led initiatives to boost financial literacy and raise consumer awareness have further supported the sector’s growth. “These initiatives empower individuals to take control of their financial planning, benefiting both themselves and their families,” Tan explained.

Looking to the future, the life insurance market in Singapore is expected to expand at an annual rate of 4%, reaching $43.6 billion in gross written premiums by 2029, driven by demographic shifts, increased health awareness, and a rebound in consumer spending, according to research by GlobalData.

Advertisements

Tan remains confident about the industry’s prospects in 2025, citing the lasting impact of the COVID-19 pandemic on public awareness of financial and health protection. “Consumers are more disciplined now, regularly reviewing their insurance needs and seeking adequate coverage for themselves and their families,” Tan said.

However, the industry must navigate the delicate balance between growth and the rising costs of healthcare. Tan emphasized that while the future looks promising, addressing the ongoing challenges of medical inflation will require innovation and continued collaboration across the insurance ecosystem.

Related topics

Advertisements

You may also like

blank

Bedgut is a comprehensive insurance portal. The main columns include commercial insurance, auto insurance, health insurance, home insurance, travel insurance, other insurance, insurance knowledge, insurance news, etc.

[Contact us: [email protected]]

© 2023 Copyright  bedgut.com