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Singapore Insurance Report Q1 2012
Business Monitor International, Jan 2012, Pages: 90
In world terms, Singapore ranks as a medium-sized market for (re)insurance that, in spite of being well developed by most metrics, will likely to grow quite rapidly through the forecast period. There are essentially three components to the sector. The first is a mature domestic non-life business – the Singapore insurance funds – in which premiums are growing at single digit rates. The second is a rapidly developing offshore non-life (re)insurance business. The non-life (re)insurers who are operating in/through Singapore are significant beneficiaries of the overall economic growth of Southeast Asia. The third is the dynamic life insurance segment, which has much in common with its counterpart in Hong Kong.
In both city-states, life insurance premiums continue to grow strongly thanks to ‘demand-related’ and ‘supply-related’ factors. High income levels, high savings rates, widespread understanding of the benefits of life insurance and low interest rates from bank deposits ensure that households’ demand for life insurance products continues to flourish. The importance of both Hong Kong and Singapore as regional business centres also underpins demand for group life products. Supply comes mainly from the local subsidiaries of world-class multi-national insurance companies. In both cases, the leading player is the subsidiary of a leading local commercial bank – HSBC Insurance in the case of Hong Kong and OCBC’s Great Eastern in the case of Singapore. However, although both HSBC Insurance and Great Eastern would rank as extremely substantial life insurers in any market, they do not exercise crushing domination of their respective life segments. There remains the opportunity for other life companies to develop businesses through the introduction of innovative new products and/or focused distribution strategies.
Data for Q311 confirms that, from the point of view of the life insurers, the main catalyst for growth has been a surge in sales via banks – bancassurance is booming. Most life companies are also taking steps to boost the productivity of their agency networks. Some are introducing innovative new products. From the point of view of clients, life insurance is a very attractive conduit for savings at a time when interest rates are low and financial markets are volatile. Group life products have been growing strongly in popularity. The main risk remains volatility in global financial markets – a factor over which the insurers have little control.
The development of the non-life segment will depend partially on consumer confidence and partially on the desire of corporate planners at multinational companies to move operations to Singapore, in order to take advantage of the excellent business environment. Global reinsurers already dominate the offshore insurance funds of the non-life segment.
Business Monitor International's Singapore Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Singapore's insurance industry.
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