Singapore Life Sector Grew 3% in 2008
The life insurance sector in Singapore recorded a 3% growth rate in 2008 as the industry chalked up S$1.71 billion (US$1.11 billion) of new business premiums during the year, according to the Life Insurance Association of Singapore.
During the year, the life sector generated S$995 million annual premium sales, up 21% from 2007. Sales of single premium policies fell 14% to S$7.64 billion in 2008. Of the total, S$2.77 billion or 36% was from the central provident fund investment scheme sector.
Sales were down in the fourth quarter due to tumultuous market conditions. Annual premium sales fell 16% to S$228.8 million and single premium sales fell 69% to S$811 million from the same quarter a year earlier.
According to the LIA, in 2008 the proportion of sales for non-linked products reached 62%, up 30% from that in 2007.
The association also said that in 2008, domestic annuity sales rose 38% to S$554 million, mainly due to “Singaporeans’ growing demand for annuities as a relevant source of retirement income.”
As to distribution, the association said the tied agency channel contributed the majority of new business, with tied financial planners responsible for 61% of new weighted business sales for 2008.
The proportion of new business sold through the bank distribution channel continued to improve. Bancassurance accounts for 27% of the total life insurance sales, up 8% from the previous year.
During the year, licensed financial advisers contributed 8% of total insurance sales in Singapore. Other channels, including direct sales, accounted for the remaining 4%.
Singapore life insurers paid out S$5.12 billion to policyholders or beneficiaries. Among the total, S$359 million came from death, critical illness or disability claims, while the remaining S$4.76 billion was from matured policies.
According to the Monetary Authority of Singapore, as of the third quarter of 2008, the life insurance sector managed S$97.8 billion in assets, representing a drop of 9% from a year earlier. Non-linked business accounted for S$77.7 billion assets, while S$20.1 billion represented the funds held for investment-linked policies.
As of Dec. 31, LIA member companies employed 5,058 office staff and 13,482 representatives.
—Rebecca Ng


Validus Re Sees Asia-Pacific As Key to Diversification
Validus Reinsurance Ltd. [78113] is looking into business opportunities in the Asia-Pacific region through a new representative office in Singapore set up to enhance client knowledge.
The Singapore representative office will play an active role in conducting market research for the region as this is the first time the company will have a presence in the Asia-Pacific, said Steve Bardill, international executive vice president of Validus Re. The new move also demonstrates “how important we view Asia,” he said.
The move to establish a presence in Asia is a major step for the Bermuda-based reinsurer because the company is seeing “positive” business development and high potential for growth in the region in spite of the current economic downturn. Bardill said the financial crisis is rather seen as an opportunity for the company, with its “strong capital base and risk management skills.”
As part of the reinsurer’s business diversification strategy, Validus Re is exploring into opportunities in Asia along with other global markets. The presence in Asia is in line with the reinsurer’s operational goals for strategic growth with the development of new clients. In Asia, insurance penetration is still relatively low, and hence, it offers room for business growth in the region, Bardill said.
The Singapore office will focus on short-tail business classes including marine, property and other specialty lines, said Bardill.
—Iris Lai


SOUTH KOREA’S AIG LIFE INSURANCE, a life subsidiary of American International Group Inc. [18540], has experienced soaring policy lapse and surrender since the financial woes of its parent company became apparent in September 2008. AIG Life saw a 166.1% surge in policy cancellations last September, with a total face value of 1.6 trillion won (US$1.04 billion), according to the Korea Life Insurance Association (BestWire, March 9, 2009).

THE UNFAVORABLE INVESTMENT ENVIRONMENT and economic conditions pulled down premiums generated from the sale of investment-linked individual life insurance products in Malaysia. Sales of investment-linked policies fell 32.6% to 2.48 billion Malaysia ringgits (US$668 million) in 2008 from 3.68 billion ringgits in 2007, according to the Life Insurance Association of Malaysia (BestWire, March 9, 2009).