According to GlobalData, Singapore’s general insurance industry is set to grow at a compound annual growth rate (CAGR) of 7.2% from SGD4.7bn ($3.5bn) in 2021 to SGD6.6bn ($5.1bn) in 2026, in terms of gross written premium (GWP).
Analysts noted that growth is expected to remain high over the next five years, led by private health insurance and increased demand for property insurance from large infrastructure projects.
The industry is projected to grow by 7.9% in 2022 and 6.7% in 2023, driven by strong uptake of property insurance, which registered the highest growth of 14.1% in 2021, GlobalData added.
Rokkam Eswara Jyothi, Insurance Analyst at GlobalData commented that Singapore’s low general insurance penetration indicates high growth opportunity. The county reported a 0.8% insurance penetration last year, which compares to South Korea’s 5.1%, Japan’s 1.8%, China’s 1.2%, and Hong Kong’s 1.6%.
Motor insurance is the largest general insurance line in Singapore, accounting for a 24.6% share of GWP in 2021. GlobalData expects the motor insurance segment to register a moderate growth of 2.7% in 2022, due to a decline in motor vehicle sales following a tax increase by up to 5.9% this year.
Property insurance is the second largest general insurance line in Singapore, accounting for a 19.5% share of GWP in 2021. Property Insurance is expected to grow by 9.9% in 2022, mainly supported by increased construction activity in the country. Projected demand of new infrastructure also indicates a positive picture which is expected to continue until 2028.
Personal accident and health (PA&H) insurance was the third largest general insurance line in Singapore, accounting for an 18.6% share in terms of GWP in 2021. PA&H insurance is expected to grow at a CAGR of 7.5% over 2021-26, driven by increased awareness for financial planning and protection.
Jyothi added: “Healthcare inflation, which has been on the rise during the last few years, has resulted in a high cost of claims for insurers. To maintain profitability, insurers will be prompted to increase their premiums for health and accident insurance policies.”
He concluded: “Singapore’s general insurance industry is projected to recover backed by higher per capita income, and growing household spending that will drive the demand for household and commercial property, automobiles, and private health insurance.”
Liability, Financial lines, Marine, aviation, and transit (MAT), and Miscellaneous insurance accounted for the remaining 37.3% share in 2021.
