The industry body said annual premium products were the key drivers for the growth, but that sales of single premium products also fared well.
During January to March, the weighted new business premium totalled S$698m (£330m, $558m), with single premium product sales rising by 27% and annual premium by 24%.
The positive momentum achieved during the first quarter, follows the 28% growth witnessed by Singapore's insurance industry last year.
“Annual premium products have remained consistent key drivers for industry growth despite continuing shifts in local market sentiment,” said Life Insurance Association president Khoo Kah Siang.
There was a slight 2% dip in the sale of single premium investment linked policies during the period under review, which Khoo attributed mainly to market fluctuations as well as a shift from select high net worth customers to universal life insurance policies.
Participating products that offer bonus or dividend to investors accounted for 60% of the new sales, while non-participating and investment-linked products respectively had a 26% and 14% share.
The so-called defined market segment (DMS) of Singapore's insurance industry, which is comprised of companies like Friends Provident International, Generali, Royal Skandia, Transamerica and Zurich International, accounted for 4% of sales last year, while companies with "normal" licenses generated the rest.
This represents a slight decline in the DMS share, which recently has been averaging around 5%.
The defined market segment caters for a high net worth market that is defined by a minimum premium size, and its members are not permitted, under their licenses, to handle CPF business.
Looking ahead, FAIR readiness
The industry association is optimistic about its performance for the rest of the year with stability returning in both local and global environments, Khoo said, adding that the industry has to be resourceful in addressing customer concerns and expectations.
Commenting specifically on the direct-to-consumer distribution channel recommended by the Financial Advisory Industry Review (FAIR) panel, Khoo said it will be another way in which products can be made available to customers, downplaying any adverse impact on other distribution channels.
The FAIR panel has proposed insurance companies make available to customers a set of “basic insurance” products through a direct channel, without dispensing advice and at a nominal administration charge. Following this, some financial advisers expressed concern this new channel may pose a threat to their profitability.
“I don’t see this significantly impacting the industry. As manufacturers of products, we see it from a consumer’s perspective, who can buy simple products directly from us as they seek professional advice from advisers,” said Khoo who is also the chief executive for Great Eastern.
Chris Gill, deputy president of the industry body and also a general manager (South East Asia) at Friends Provident International echoed similar sentiments and said he does not see any adverse impact of this on the financial advisers.
In terms of contribution of new business by weighted premium, tied agents continue to dominate with 42% share followed by banks with 40% while financial advisers accounted for 14%.
Summary of results:
Weighted new business sales by Singapore’s insurance industry:
|
|
Jan – Mar 2014 |
Jan – Mar 2013 |
Change |
|
Single Premium |
$168.2m |
$132.9m |
27% |
|
Annual Premium |
$530.5m |
$428.9m |
24% |
|
Total |
$698.7m |
$561.8m |
24% |
|
|
Jan – Mar 2014 |
Oct – Dec 2013 |
Change |
|
Single Premium |
$168.2m |
$178.2m |
-6% |
|
Annual Premium |
$530.5m |
$562.5m |
-6% |
|
Total |
$698.7m |
$740.7m |
-6% |
Source: Life Insurance Association of Singapore
*The weighted new business premium figure is calculated as follows: 10% SPI + 100% API, with adjustment for premium payment terms of less than 10 years
