Investment-linked life insurance boosts Singapore’s life insurance industry

ILI products grew by 30% in 2021 and are expected to grow further by 9.8% this year.

Singapore’s life insurance industry will grow by 13.3% in terms of gross written premiums (GWP) in 2022 on the back of better returns on investment-linked life insurance (ILI) products, according to a recent report by GlobalData.

In 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% from 2021 to 2026 as compared to the 11.1% CAGR recorded during the period 2017to 2021. 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, strong demand for traditional life products, and the personalisation of products and services.

According to GlobalData insurance analyst, Manogna Vangari ILI products have witnessed more than 30% growth in 2021 and are expected to grow by 9.8% in 2022. The trend is expected to continue in 2023, which will help the Singaporean life insurance segment to remain resilient despite worsening economic conditions.

Meanwhile, 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.

“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,” Manogna said.