Singapore sales of single-premium products totaled S$640.9 million in weighted new business premiums for the first three quarters of the year.

SINGAPORE: Sales of single-premium life insurance products rose 23 per cent in the first three quarters of this year, totaling S$640.9 million in weighted new business premiums, the Life Insurance Association Singapore (LIA) said on Thursday (Nov 6).

Of the total, 14 per cent were CPF-funded policies. This is largely due to increased uptake in participating and non-participating products, the LIA said.

Overall, weighted new business premiums reached S$2.02 billion, down 1 per cent from the same period in 2013. Weighted annual premium sales was the largest contributor to new business, totaling S$1.38 billion, despite registering a 9 per cent dip over the same period in 2013.

The life insurance industry paid out S$5.33 billion to policyholders and beneficiaries as at end-September. Of this, S$439 million was for death, critical illness or disability claims, and the remaining S$4.89 billion for policies that matured.

Approximately one in two individuals in Singapore – a total of 2.74 million people – have health insurance cover, with paid-up premiums amounting to S$1.5 billion as at end-September.

Source: Channel News Asia

Life insurance may lower its returns bar

A projected annual investment returns figure that has been used to market life insurance products for more than 11 years might be coming down.

From July this year, the figure could drop from its current 5.25% by possibly half a percentage point to 4.75%.

Furthemore, an annual review might take place on this figure in line with the push to improve standards in the financial advisory industry.

The change will not affect the actual values of existing or future insurance policies. But it will give a more realistic picture of how life insurance policy cash values grow over time.

Source: Business Times

Protection gap for Singaporeans narrows by half from 5 years ago

Singaporeans are now better insured against the death of their family's breadwinners, as the protection gap of working adults in Singapore has narrowed by half from five years ago, according to a study commissioned by the Life Insurance Association (LIA).

Findings from the study undertaken by consultancy firm Towers Watson show that the average protection gap for a working adult in Singapore narrowed by half, from 7.6 times of one's annual income in 2006 (based on a study by the Nanyang Technological University) to 3.7 times in 2011. Based on the assumption of an average annual salary of $65,500, this translates to an average of around $242,500 per person.

• avg. protection needed for a working adult is approximately 10x of her annual salary, or around $626k. Of this, insurance coverage accounts for half $319.5k, while CPF savings account for 10%, with the remaining amount as the protection gap.
• Protection gap biggest for the 55-59 year old individuals. 

Read full story: http://www.businesstimes.com.sg/premium/singapore/insuring-breadwinners-families-better-protected

LIA Press Statement in response to MAS' Mystery Shopping Survey Findings

The Life Insurance Association Singapore (LIA) provides guidelines on the sales advisory process for life insurance products as well as the requirement for certain product disclosure documents. In the sales advisory process, insurance advisers are required to offer a choice of fact-find options, namely, full advice, partial advice, product advice or no advice.
  
Proportions of sales based on full or partial fact-find process have increased. In 2011, 74 per cent of life insurance policies purchased were based on full (10 per cent) or partial (64 per cent) fact-find as selected by the clients.

We note the specific findings of the MAS mystery shopping survey and the shortcomings, which require the industry's further attention.

The LIA supports the recommendation for industry to undertake mystery shopping exercises. We see this as a further initiative to enhance the effectiveness of the life insurance sales advisory process.

A recent consumer survey commissioned by the Life Insurance Association also provides insight. Door-to-door interviews of 800 respondents representing Singapore’s demographics were conducted between November 2011 and January 2012 by an independent market research company.

A majority of Singaporeans and permanent residents perceive the Singapore industry well and trust the life insurance representatives who serve them.

• 72 per cent are “Very Satisfied” and “Satisfied” with the life insurance industry as a whole.
• 69 per cent of Life Insurance Users rely on only one trusted agent.
• 92 per cent of Life Insurance Users who went through a full/partial fact-find in the past 3 years say they benefited from the process.

The LIA survey shows that consumers who have an on-going relationship with a representative are generally well served.
   
Both LIA and member companies will continue to support MoneySENSE initiatives as well as contribute in various ways toward raising financial literacy levels among Singaporeans.
 
Tan Hak Leh
President, LIA

Source: http://www.lia.org.sg/node/3200