The life insurance sector in Singapore experienced a significant decline in the first nine months of the year, with weighted new business premiums falling by 9.7%. This decline, which the Life Insurance Association of Singapore (LIA) attributes largely to a decline in single premium policies due to economic uncertainty, has highlighted the many challenges that the sector has faced this year and the hurdles that lie ahead.
Despite these results, the LIA is looking to the future, especially with a president who is nearing the end of his first year at the helm. Speaking to Insurance Business Asia, LIA Singapore president Dennis Tan (pictured above) discussed his first year at the helm of the association, as well as his priorities as the industry moves into 2024.
“I assumed the role of president in March 2023, and it has indeed been an enlightening journey of continuous growth and learning. Our focus is always on how we can do more and how we can do better,” said Tan.
Tan outlined three key priorities for the life insurance industry that LIA will address.
“The first is to identify and develop key initiatives to address Singapore’s protection needs and financial gaps, using insights from our recent Protection Gap Study. This will enable us to better understand and identify various protection gaps that will help address the current mortality and critical illness protection gaps,” he said.
Next on the list are digitisation efforts, a trend that has been on the rise since the pandemic affected global industries. Tan stressed the need to continue these initiatives to improve the journey for all stakeholders and the general public.
“Finally, one of our key priorities is to support Singapore’s sustainability agenda through sustainable investments and green solutions,” he said. “We remain optimistic about the role and value of the life insurance sector as we seek to be agile in addressing the challenges posed by emerging technologies, economic uncertainties and Singapore’s rapidly ageing population.
“Three areas in which we are redoubling our efforts are: helping consumers obtain more adequate protection to bridge their mortality and CI gaps; supporting Singapore’s efforts to drive the sustainability agenda to promote healthy lifestyles across all groups; and leveraging technology and driving innovation to enhance the consumer experience and drive efficiencies,” said Mr Tan.
Bridging Singapore’s protection gap
Tan said member companies continue to introduce innovative policies that cater to the needs of the country’s ageing population, especially in light of serious conditions such as dementia and Parkinson’s disease.
“They are also offering plans that extend coverage to age 100, ensuring comprehensive protection for the older generation. Product innovation remains a priority for the industry,” he said.
As healthcare costs rise and medical inflation continues, Mr Tan also emphasised the importance of ensuring that consumers have adequate coverage against unforeseen situations or illnesses. He reiterated LIA Singapore’s commitment to working with member companies to improve consumer understanding of insurance policies.
“At the same time, life insurers will continue to develop and introduce innovative products to meet the different protection needs of consumers at different stages of their lives,” he said.
“The life insurance industry continues to encourage consumers to adopt healthy lifestyles by offering incentives such as free health screenings, premium discounts for claim-free periods and rewards for achieving certain health goals. Such programmes from our member companies are becoming increasingly popular among Singaporeans as they seek more accessible ways to live healthy lives,” said Tan.
Supporting a green agenda and further digitalisation
LIA’s efforts go beyond ensuring the well-being of Singaporeans. Tan said the association recognises that the insurance industry has a role to play as an asset owner and contributor to responsible investment.
“The Singapore government continues to invest in promoting sustainable practices and investments,” he said. “For example, MAS recently announced that it is working on a pilot scheme to help insurers invest in sustainability-related infrastructure projects in Asia. As a strategic partner of the Green Finance Industry Taskforce (GFIT), LIA Singapore will continue to work with key partners to promote sustainable investments and develop greener financial solutions in the long term.”
Earlier this year, the association also established a Sustainability Sub-Committee to map industry initiatives and provide feedback to relevant stakeholders in line with recognised standards.
“In late September, we also submitted industry views on the recent public consultation on the Sustainability Reporting Advisory Committee’s (SRAC) recommendations to advance climate change reporting in Singapore,” said Tan.
In addition to their initiatives to support the green agenda, Tan said life insurers in the country are proactively embracing digital innovations to enhance their digital ecosystems.
“Member companies are implementing cutting-edge technologies such as digital customer identification, e-signatures, smart underwriting and claims automation, reflecting the life insurance industry’s commitment to modernisation,” he said.
Consumers and intermediaries are also part of this digital transformation, Tan says, with everyone in the industry benefiting from further digitisation efforts.
“More people are choosing to buy simple insurance products online, signalling a shift in consumer preferences and willingness to use technology to complement the usual face-to-face interactions. In response, insurers are leveraging digital tools to provide a seamless and convenient experience for their customers,” he said.
“Looking ahead, digitalisation will continue to be a key driver in the life insurance sector, speeding up processes, optimising operations through automation, and providing efficient and personalised financial advice to consumers,” Tan said.
