Insurance in Singapore: Market and IT Overview
Singapore’s insurance market is one of the most developed in the Asian insurance industry, with an insurance density (per capita premium income calculated per total population) of USD 1,957.7.
The Singapore insurance market has a relatively strict market access system. It is estimated that the total IT investment in the Singapore insurance industry was USD 160 million in 2008. As a result of the financial crisis, there should be no sharp rise of IT spending during 2009 and 2010, but the growth rate for spending is expected to increase in 2011 and 2012.
The non-life insurance market exhibits moderate market concentration in Singapore, with the top five insurance companies accounting for two-fifths of the market share. There is sharp competition in the non-life insurance market due to a large number of market players. As of January 2009, there were 61 authorized direct insurers in Singapore, 71% of which are non-life insurance companies, 21% life insurance companies, and the remaining 8% are composite insurance companies. The top five life insurance companies with the highest gross premium income in 2007 accounted for 77% of the market share.
The insurance market in Singapore offers diversified non-life insurance products. Among life insurance products, the investment product category has experienced the fastest growth rate, while traditional insurance products took a very large share among new products of 2008, with over 30% growth and 62% of total premium income. As a result of the financial crisis, people have become more cautious about purchasing investment-linked products, with traditional life insurance products gradually recapturing people’s attention.
Insurance company agents are still the primary sales channel for Singapore life insurance, but their market share has been declining on a yearly basis. The market share for bancassurance has increased, with a growth rate of 27% in 2008; while the market share for other sales channels posted a very fast growth rate.
"Singapore’s booming economy brought about the growth of its national wealth," says Wenli Yuan, senior analyst with Celent’s Asia Research Group and author of the report, "The aging population and establishment of the CPF system are the inherent driving factors for the development of its financial industry, including the insurance industry."
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