Singapore's new insurance premiums fall 5.2% in 2022

Rising interest rates and inflation dented demand for life insurance products.

Singapore’s insurance industry saw a drop in premiums in 2022 as the slowing economy, rising interest rates, and inflation hurt demand for life insurance products.

The industry reported a total of S$5.1b in weighted new business premiums during the whole year, according to data released by The Life Insurance Association, Singapore (LIA Singapore). This is 5.2% lower than in 2021.

“Global headwinds and slowing economic growth coupled with geopolitical uncertainty, rising interest rates and elevated inflationary pressures continue to impact overall demand for life insurance products,” said Khor Hock Seng, president, LIA Singapore.

Khor added that despite these challenges, the Lion City’s life insurance industry continues to recover and “demonstrate resilience as more individuals place greater emphasis on ensuring they are well-protected. This can be seen from an increase in demand for regular premium non-par products, such as term and health insurance, he said.

Total new weighted business premiums rose 16% in 2022 compared to 2021, growing 16.4% or by S$118.9m in Q4.

ALSO READ: Almost half of Singaporeans believe they won't be able to retire comfortably

Single premium products fell 28.8% in weighted premiums, translating to a 9.2% year-on-year dip. In total, weighted premiums for this segment totalled S$2.35b in 2022, a 28.8% decreased from 2021.

The fall may be attributed to the rising interest rates and a volatile macroeconomic environment which impacted consumers' investment choice and preference across various financial products in the market, LIA Singapore said.