The general insurance industry in Singapore is expected to grow at a compound annual growth rate (CAGR) of 5.0% from SGDb4.4bn ($3.2bn) in 2020 to SGD5.6bn ($4.2bn) in 2025, in terms of gross written premium (GWP), forecasts GlobalData.
According to GlobalData, resumption of economic activities, successful COVID-19 vaccination rollout programs, and relaxation on travel restrictions are expected to support the general insurance industry in Singapore.
Manogna Vangari, Insurance Analyst at GlobalData, comments: “The Singaporean economy is expected to pose a strong recovery in 2021 and grow by 7% following 5.4% decline in 2020. The general insurance industry is also expected to return to stable growth in 2021, after a flat growth of 0.2% in 2020, in line with the economic recovery.”
An analysis of GlobalData’s Global Insurance Database reveals that motor insurance was the largest general insurance line in Singapore with a GWP share of 25.8% in 2020. It is expected to grow by 1.2% in 2021 after stagnating at 0.9% in 2020 due to restrictive traffic movements, and lower vehicle sales, that resulted in lower premium collection in 2020. Electric vehicles sales grew by over 80% during September 2020–2021, supporting the demand for motor insurance.
Personal accident and health (PA&H) and property insurance were the second and third-largest general insurance segments with a share of 19.0%, and 18.4%, respectively, in 2020.
PA&H insurance provided by general insurers is expected to grow by 3.4% in 2021, and 3.8% in 2022 supported by demand for popular hospitalization insurance plan – Integrated Shield Plan (IP).
IP plans cover additional hospitalization expenses, and benefits such as costs of private hospitals, and wider choice of specialist doctors, that are not covered in the universal government scheme known as MediShield Life. Currently, around 67% of the population has an IP insurance plan, which is offered by seven insurance companies.
Property insurance is expected to grow by 7.0% in 2021 supported by a recovery in construction output, which is expected to reach SGD28.0bn ($20.3bn) in 2021.
Vangari concludes: “Economic recovery and gradual opening of international travel are expected to revive the demand for general insurance in 2021. The industry’s growth momentum will consistently pick up over the next five years aided by product innovation, digitalization, and infrastructure development projects.”