The latest market snapshot from GlobalData;
The Singaporean general insurance industry is set to grow at a compound annual growth rate (CAGR) of 5.8% from SGD5.54 billion ($4.02 billion) in 2023 to SGD7.35 billion ($5.5 billion) in 2028 in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company.
According to GlobalData’s Insurance Database, the general insurance industry in Singapore is expected to grow by 6.9% in 2023 and 5.6% in 2024, supported by investments in infrastructure projects and a rise in the demand for health insurance after the pandemic.
Swetansha Chauhan, Insurance Analyst at GlobalData, comments: “After witnessing high growth in 2021 and 2022, Singaporean general insurance industry growth is expected to slow down from 2023 onwards. Changing economic conditions, rising inflation, and geopolitical uncertainties have led to sluggish growth in all general insurance lines of business, which is expected to slow down the overall industry growth in 2023.”
Personal Accident and Health (PA&H) insurance is the leading line of business in Singapore, which is estimated to account for a 23.9% share of the general insurance GWP in 2023. It overtook the leading position from motor insurance in 2022, which has remained the leading line of business during the last decade. PA&H insurance grew by 32.6% in 2022, primarily driven by heightened demand for health insurance due to an increase in awareness after the pandemic, a rise in medical costs due to inflation, and the relaxation of travel restrictions around the world.
Swetansha continues: “Recent regulatory developments have also supported the growth of PA&H insurance. For instance, on July 1, 2023, the Ministry of Manpower issued mandatory health insurance for all new and existing foreign workers, including migrant domestic workers and those coming on short-term employment pass (S Pass). The government is also providing various subsidies to help employers purchase medical insurance for their foreign workers. PA&H insurance is expected to grow at a CAGR of 6.6% during 2023-2028.”
Property insurance is the second largest line, estimated to account for a 19.1% share of general insurance GWP in 2023. Property insurance in Singapore is driven by fire insurance, which is mandatory when purchasing homes from the Housing and Development Board (HDB) as well as taking home loans.
Property insurance will also benefit from the growth in the construction sector and investments in large infrastructure projects. According to the Building and Construction Authority (BCA), contracts worth up to SGD32 billion ($23 billion) are likely to be awarded in the construction sector in 2023. This will support property insurance, which is forecast to grow at a CAGR of 6.2% over 2023-28.
Motor insurance is the third largest line of business, estimated to account for an 18.4% share of the general insurance GWP in 2023. The motor insurance market in Singapore experienced a decline of 7.9% in 2022, as the year saw a significant drop in vehicle sales, according to the Land Transport Authority. The additional registration fee levied on the purchase of high-end cars was increased in March 2022 from 220% to 320% of the market value of the car, which has increased the price of these vehicles and impacted sales.
Swetansha adds: “Additionally, global supply chain disruptions and an unprecedented increase in the premiums of certificate of entitlement (COE) have also resulted in higher vehicle prices, leading to a decline in vehicle sales. COE represents the right to vehicle ownership for a period of 10 years and contributes a significant portion to the ownership cost of a new car.”
Liability, Financial lines, Marine, aviation, and transit (MAT), and Miscellaneous insurance accounted for the remaining 38.6% of the general insurance GWP in 2023.
Swetansha concludes: “The general insurance penetration in Singapore stood at 0.8% in 2022, which is lower as compared to other countries in the Asia-Pacific (APAC) region such as South Korea (1.5%), Japan (1.8%), China (1.2%), and Hong Kong (1.7%), indicating a huge growth potential for Singaporean general insurers. Higher demand for health insurance, mandatory fire insurance, and increasing premium prices in most general insurance lines due to inflation will support the growth of the country’s general insurance industry over the next five years.”
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