The Singaporean life insurance industry is estimated to grow by 13.3% in 2022, in terms of gross written premiums (GWP), despite the prevailing global economic woes and geopolitical tensions, says GlobalData, a leading data and analytics company.

According to GlobalData’s Global Insurance Database, the life insurance GWP market in Singapore is forecast to grow at a compound annual growth rate (CAGR) of 10.2% over 2021-26 as compared to the 11.1% CAGR recorded during the period 2017-21. The growth will be primarily driven by a sustained rise in demand for single premium linked and non-linked life insurance products due to their attractive returns, a strong demand for traditional life products, and personalization of products and services.

Manogna Vangari, Insurance Analyst at GlobalData, comments: “Better returns on investment-linked life insurance (ILI) products as compared to bank savings products have supported the demand for life insurance. ILI products have witnessed more than 30% growth in 2021 and is expected to grow by 9.8% in 2022. This trend is expected to continue in 2023, which will help the Singaporean life insurance segment to remain resilient despite worsening economic conditions.”

Traditional term life and whole life insurance are also expected to witness high growth of 11.2% and 20.6% in 2022, respectively, supported by increased awareness about financial planning and protection following the COVID-19 pandemic as well as increased customization of these products. Increasing liquidity constraints due to a volatile economy have led to the introduction of subscription-based, customized insurance offerings. They aim at meeting the changing financial demands of the customers by offering flexibility to modify coverages or add-on options based on the changes in their lifestyle with no lock-in periods.

Manogna continues: “The pandemic-driven change in consumer demand and their purchasing behaviour has prompted insurers to focus on personalization of products and services.”

Insurers are also investing in technologies like chatbots to resolve queries instantly and provide effective customer services. For example, AIA Group plans to shift 90% of its operations to the cloud by the end of 2022 to reduce its operational expenses. Prudential Singapore is experimenting with machine learning-based solutions to automate the claims approval process to improve underwriting by reducing fraudulent claims and increasing efficiency.

Manogna concludes: “Singapore’s life insurance industry growth will remain strong over the next five years. However, recurrent COVID-19 waves and a sluggish economy could cause some challenges for insurers in the near term.”