Rethinking insurance for the masses

Whilst the Singapore government's measures provide some relief, finances remain a key concern.

Titled “Onward Together For A Better Tomorrow”, Prime Minister and Minister of Finance Lawrence Wong’s Budget 2025 speech takes on added significance as Singapore celebrates its 60 years of independence, outlining the roadmap for the nation to emerge as a stronger and united society.

Amidst global economic uncertainties due to geopolitical challenges and trade conflicts, Prime Minister Wong’s speech reinforces the nation’s commitment to building a resilient society. The various measures that were announced, including vouchers, handouts, and tax rebates, aims to bolster financial security of citizens to better cope in the year ahead.

Whilst the government's measures provide some relief, finances remain a key concern. According to an AIA Singapore study, only 47% of residents are optimistic about the economy due to concerns on inflation, cost of living, worries over job security, and income levels.

That said, it’s worth noting that more than 4 in 5 are actively planning to manage their finances, with 48% of the respondents citing insurance as a crucial safety net for long-term financial planning. Insurance was also essential to more than half of those surveyed to cope with rising healthcare costs.  This highlights the vital role of insurance in mitigating financial risks and providing long-term security.

This trend is also reflected in recent findings by the Life Insurance Association of Singapore, where the strong growth in the sales of investment-linked plans (ILP) surged 41% year-on-year to S$2.3b in 2024 compared to S$1.6b in 2023. These plans are often seen as a solution for wealth accumulation, as these policies provide life insurance protection while offering higher potential returns.

Insurers are also diversifying their non-life insurance products to meet the changing needs of Singaporeans. Beyond traditional health, motor, and property insurance, we are seeing the emergence of products such as income protection that safeguards against job loss or inability to work, and bill protection which covers essential service provider bills during unforeseen events.

To truly address the needs of the nation who embraces technology and digital innovations, the insurance industry must go beyond traditional products and evolve to become a seamless and essential part of everyday life. This means ensuring widespread access to protection in ways that are accessible, relevant, and embedded into daily transactions.

Embedded insurance is a powerful way to achieve this transformation. According to data from McKinsey, the non-life embedded insurance market in Asia is projected to reach about $170b in 2030. The value of embedded insurance lies in the versatility of such products as these can be developed across multitudes of industry verticals and use-cases and be integrated into the digital experiences that individuals already engage with.

Embedded insurance presents a timely and relevant solution as Singaporeans, who are highly digital-savvy, seek affordable and accessible protection amidst rising living costs. True relevance means covering what matters most—their prized possessions, income, digital assets, major investments, and life and health.

By eliminating barriers like extensive planning and high upfront costs, embedded insurance seamlessly integrates coverage into everyday digital transactions—whether booking tickets to events, shopping online, or using e-wallets. This aligns with the government’s Budget 2025 priorities, which focus on technology innovation and financial security for all. With just a few clicks, consumers can secure relevant coverage instantly through digital platforms and apps, ensuring they stay protected without added complexity.

For Gen Z and millennials, who may be uninsured due to financial instability, shifting spending priorities, and economic uncertainty, embedded insurance offers a frictionless approach that fits their fast-paced, tech-driven habits. By making insurance more intuitive and accessible, it not only provides essential protection but also serves as an early introduction to financial planning. This exposure helps young consumers build financial literacy and integrate insurance into their financial journey from an early stage.

Insurance continues to play an essential role in today’s society, both for long-term wealth accumulation and providing crucial protection. Whilst the life insurance sector holds a positive outlook, there is still a vast opportunity for insurers and insurtech firms to drive innovation and reshape the industry for the masses.

Embedded insurance is at the forefront of this transformation, developing unique products that fit modern lifestyles, cover targeted risks, and reduce premiums to an affordable level. The ultimate goal: a more resilient Singapore, where protection is readily available, consumed “on the go,” and adapted to individual needs.