Great Eastern Life sees mixed Q2 performance in Singapore, Malaysia

Its performance offers insights for competitors like Prudential and AIA.

Great Eastern Life’s second quarter (Q2 2024) results revealed a mixed performance, with sales falling quarter-on-quarter (QoQ) but maintaining strong year-on-year (YoY) momentum in Singapore, whilst Malaysia rebounded from a weak Q1, Jefferies Equity Research revealed. 

This performance offers insights for competitors like Prudential and AIA, which have significant market shares in both countries and are soon to report their H1 2024 results.

In Singapore, despite a 25% QoQ decline in Total Weighted New Sales (TWNS), YoY sales increased by 38%, with bancassurance and agency channels growing by 9% and 58%, respectively. 

This continued momentum is a positive sign for Prudential, which has experienced similar trends, though it’s worth noting that Great Eastern Life’s figures are more heavily skewed towards savings products, potentially offering them an easier comparison.

In Malaysia, Great Eastern Life's new sales grew by 32% QoQ and 30% YoY, reversing the previous quarter's decline. 

This growth was broad-based across agency, bancassurance, and other channels, with a significant uplift from the Government social protection scheme. 

However, since Prudential and AIA do not benefit from this scheme, their core channel performance will be more telling.

Despite the sales growth, Great Eastern Life’s margins have deteriorated year-on-year, dropping from 46.7% to 39.2%, although this is an improvement from the 31.1% seen in Q1 2024. 

This margin trend aligns with expectations for a slight margin headwind for Prudential in Singapore, driven by rising 10-year yields, which affect the discounting of health and protection cash flows.