The life insurance gross written premiums in Singapore are projected to grow from S$38.7bn in 2019 to S$43.5bn in 2024, according to GlobalData, a leading data and analytics company.

GlobalData has revised Singapore’s life insurance forecast in the aftermath of COVID-19 outbreak. As per the latest data, Singapore’s life insurance industry is expected to grow at a compound annual growth rate (CAGR) of 2.4% during 2019-2024.

The stringent lockdown measures imposed by the government to curb the spread of the pandemic resulted in the decline of economic activity. As a result, the country’s economy was down by 13.2% in the second quarter of 2020 compared to same period last year. Subsequently, life insurance business, which recorded S$1.66bn in weighted new business premiums during H12020, declined by 13% compared to the same period in 2019.

Pratyusha Mekala, Insurance Analyst at GlobalData, comments, “Effective from June 2020, the country gradually eased lockdown restrictions. Positive economic activity and an uptick in labor market activities in the third quarter (Q3) of 2020 are aiding the recovery in demand for life insurance products.”

Singapore life insurance industry recovered 90.6% growth in weighted new business premiums in Q3 2020 over the previous quarter, according to the data published by the Life Insurance Association.

Despite the pandemic, the demand for single premium policies continue to rise, partially backed by online sales. The weighted premiums of single premium policies registered a growth of 36% during January-September 2020, compared to the same period last year. The popularity of short-term single premium policies can be attributed to the higher returns compared to the traditional savings accounts. Furthermore, the absence of medical underwriting process makes these policies popular.

Ms Mekala concludes: “Despite the uncertainty related to the spread of the contagion, the resumption of business activities is expected to support the growth of life insurance business in the second half of 2020. As insurers focus on remote ways to conduct business operations, online sales are expected to become a prominent driver for the life insurance industry.”