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The Life Insurance Industry Just Announced Its Latest Results. Here Are 3 Interesting Trends That We Found

More people are now buying non-participating life insurance policies.

Just yesterday, the Life Insurance Association Singapore (LIA) announced industry-wide results from 1H2017.

As with all reports, there are tons of information about the industry that can extracted from the article. You can find the full results and announcement on their website.

We highlight three interesting observationd from their latest set of results. Whether you are a professional from the industry or a consumer, we think these are insights worth knowing.

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#1 Non-Participating Policies Are Becoming More Popular

For those of you who are not familiar with the term, “non-participating”, what it refers to are policies where policyholders do not participate in the fund, and hence, are not entitled to any additional profits that the fund makes.

For example, term life insurance policies are a type of non-participating policy since policyholders only receive payout if an insured event occurs, and not when the insurance fund generates returns from their premiums.

With all things being equal, non-participating policies tend to be cheaper compared to participating and investment linked policies (ILPs), since premiums paid goes directly into buying insurance coverage provided, rather than for part of the premiums to go into a fund that is invested for returns.

Over the past two years, it appears that Singaporeans are starting to shift towards non-participating policies. This can be observed from the increase in premiums from new business over the past two years.

Year New Business – Total Weighted Premiums (Non-Participating) Growth (%)
1H2015 $342 million
1H2016 $481 million 40.6%
1H2017 $542 million 12.7%

In contrast, growths from both participating and investment-linked policies were slower.

Year New Business – Total Weighted Premiums (Participating) Growth (%) New Business – Total Weighted Premiums (Linked) Growth (%)
1H2015 $739 million $272 million
1H2016 $836 million 13.1% $206 million -24.3%
1H2017 $886 million 6.0% $253 million 22.8%


Whether this increase is due to a change in consumers’ desired preference, or a change in focus from insurance companies and their agents is anyone guess.

It will be interesting for us to continue watching if this growth remains sustainable, or whether it will tail off in subsequent years.

#2 Retirement Products Continue To Enjoy Decent Growth

Given the high cost of living in Singapore, it should be no surprise that retirement related products offered by insurance companies continue to enjoy good growth.

Thus far in 2017, 10,680 retirement-related policies amounting to about $84 million in total weighted premiums have been sold. This number looks strong when compared to 2016, where a total of 17,927 policies were sold for the entire year.

These plans account for approximately 5% of total weighted premiums for 1H2017.


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#3 Financial Advisors Are Growing In Market Share

We wrote about this trend during our coverage last year that Financial Advisors (FAs) are growing in market share. Thus far in 1H2017, this trend appears to have continued.


From 51,000 policies sold in 1H2015, FAs now account for about 91,000 policies sold as of 1H2017. This is about a 78% increase in total policies sold over the past two years.

In contrast with tied agents, who can only advise on the products of the company he or she represents, FAs are agents that represents Financial Adviser (FA) firms and who can advise on the products of several life insurers that the FA has distribution agreements with.

While tied agents continue to remain as the biggest distribution channel for insurance companies, FAs are slowly but steadily taking a bigger pie of the insurance market.

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