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SINGAPORE'S life insurance industry marked a second consecutive quarter of recovery with $426 million of total weighted new business premiums in the third quarter, placing the industry near levels before the global recession.
While this is a tad lower than the weighted new business premiums of $444.8 million in the third quarter of last year, it is a jump of 40 per cent from the second quarter and 94 per cent from the first quarter.
The strong quarter-on-quarter recovery came on the back of a 106 per cent surge in single premium sales to $1.85 billion in the third quarter from the preceding quarter. Almost 90 per cent of the single premium policies were bought using cash.
'New business sales over the last six months is a shot in the arm for our industry, which has had to contend with a number of hurdles impacting recent earnings,' said Darren Thomson, president of the Life Insurance Association (LIA).
He noted that the third-quarter sales suggest that consumer confidence is returning and that they are ready to invest in a broad range of life insurance products as part of their portfolio.
Annual premium sales was a shade lower at $274.3 million in the third quarter compared to $277.1 million a year ago, but represented a 15 per cent increase from the second quarter.
CPF Investment Schemes (CPFIS) accounted for $201 million or 10 per cent of total single premium sales in the third quarter - a 22 per cent increase over the preceding quarter.
For the first nine months this year, the weighted new business premiums slipped 33 per cent from a year ago to $950 million, as the sector took a hit from the global financial crisis.
Non-linked products were popular with consumers, accounting for 80 per cent of all life insurance sales up to the third quarter of this year. Health insurance for the first nine months rose 26 per cent year-on-year to $106 million.
As at end-September, the industry paid out a total of $3.72 billion to policyholders or beneficiaries. Of this figure, $296 million was in respect of death, critical illness or disability claims, while the remaining $3.42 billion was on policies that matured.
According to LIA, the average death benefit worked out to about $47,027 per policy in the third quarter of 2009, the highest in recent memory.
While this suggests that policyholders are progressively raising their coverage and indicates a narrowing protection gap, 'this figure nonetheless shows that Singaporeans are still significantly under insured', LIA said.
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