What does 2024 hold for Singapore’s Insurance sector
The Singapore insurance sector is predicted to expand by 5.6% in 2024, primarily driven by an increase in demand for health insurance following the pandemic. What are the changes and challenges facing this sector that the majority of us are dependent on in our lifetime? Young or old, from personal accident and health (PA&H) to motor insurance, we highlight the key trends enveloping the insurance sector and what can be expected in 2024 and beyond.
1. Mandatory health insurance for all new and existing foreign workers announced by the Ministry of Manpower in early 2023 has bolstered the growth of PA&H insurance with a CAGR of 6.6% between 2023-2028.
2. Property insurance is projected to grow at a CAGR of 6.2% over 2023-2028. This is primarily driven by the compulsory fire insurance when purchasing homes and the growth in infrastructure and construction projects.
3. Increased regulatory scrutiny on Singapore’s four largest insurers - AIA Singapore, Income Insurance, Prudential Assurance, and Great Eastern Life. These companies are named as too big to fail and can impose a systemic risk to the economy if they were to collapse. A good move indeed to ensure the financial health of these large organizations is in check.
4. The Monetary Authority of Singapore (MAS) will be rolling out guidelines towards ensuring fair and responsible practice for customers by the middle of 2024. The guidelines will include better insurance coverage for people with disabilities and mental health conditions.
5. Upon finalizing the guidelines iterated in point 4 above, Singapore will also review its stance on Article 25(e) of the United Nations Convention on the Rights of Persons with Disabilities (CRPD). The article prohibits discrimination against people with disabilities in terms of the provision of health and life insurance. Currently, Singapore does not mandate private insurance companies to comply with this article and will work towards withdrawing its reservation on Article 25(e) of CRPD.
6.The general insurance industry has outlined a set of guidelines prioritizing customers' interests. This includes mitigating “rolling bad apples”, prohibition of referral and introducer fees, and introducing appropriate incentives and performance indicators beyond financial indicators.
With a rapidly aging population and increasing medical costs, the insurance sector and us ‘the common people’ will inadvertently be affected by the trends and policies taking place around us. The above initiatives are positive changes in the right direction, paving the way for a more trustworthy and responsible practice and industry standard.
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