The latest report from GlobalData looks at Property insurance in Singapore.
Singapore property insurers are expected to remain profitable in 2023 due to disciplined underwriting, adequate reinsurance coverage, and growing premiums from compulsory fire insurance, says GlobalData.
According to GlobalData, Singapore’s property insurance industry, in terms of gross written premiums, is projected to grow at a compound annual growth rate (CAGR) of 8.7% from SGD1.0 billion ($0.7 billion) in 2022 to SGD1.5 billion ($1.1 billion) in 2027. The growth of property insurance in Singapore is driven by fire insurance, which is compulsory when purchasing houses from the Housing and Development Board (HDB) and taking home loans. According to HDB, more than 75% of the Singapore resident population lives in flats sold by HDB.
GlobalData’s Insurance Database reveals that the underwriting profit of property insurers in Singapore stood at 28.5% in 2021, and it is expected to remain above 25% in 2022 and 2023.
Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, comments: “Despite the rise in inflation that is leading to higher claims pay-outs, the property insurers in Singapore are expected to remain profitable in 2023 due to adequate reinsurance cover, which helped insurers maintain low levels of the loss ratio and reduce their risk in case of higher claims.”
Property insurers in Singapore ceded 72.6% share of their business to reinsurers in 2021, an increase from 65.8% share in 2017. This trend is expected to continue over the next few years as insurers look to maintain their underwriting profitability.
Sahoo adds: “Disciplined underwriting along with well-diversified portfolios will support insurers’ profitability in Singapore. The top 10 property insurers in Singapore accounted for 67% of the property insurance market in 2021. They generated on average, 41% of their business from property insurance, 19% from liability insurance, 14% from motor, and 14% from non-life PA&H insurance. Such diversification helps in managing risk arising due to loss in any single line of business.”
Sahoo concludes: “While property insurers in Singapore have continued to maintain profitability, high inflation, and growing global economic uncertainty can have an adverse impact on their profitability over the forecast period.”
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