Etiqa set for growth after being named HDB fire insurer in Singapore

The company is banking on the city-state’s 1.11 million flats to boost fire insurance sales.

Etiqa Insurance expects revenues from the residential fire segment to increase by as much as 20% after it was appointed as the official insurer of Singapore’s Housing Development Board (HDB).

The unit of the Kuala Lumpur-headquartered insurer is banking on the existing 1.11 million HDB flats and a state plan to build 100,000 more until 2025 to boost growth in the coming years. Last year, Etiqa Insurance Singapore’s revenue from fire insurance jumped 40.9% year on year to $2.1m (RM9m).

“The strategic launch of new flats makes the potential for take-up in the next five years very promising,” Jazzreal Wong, head of Direct Business at Etiqa Insurance Singapore, told Insurance Asia.

Last year, HDB flats — housing estates built and managed by the Singapore government that are usually cheaper than condos — increased 1.7% to 1.11 million from a year earlier, the fastest since 3.4% in 2018.

“We are expecting between 10% and 20% growth for the entire residential fire class, including that of the HDB fire insurance scheme,” Wong said.

Starting 16 August 2024, Etiqa will provide basic fire insurance coverage to newly sold HDB flats, charging premiums for a five-year term at $0.85 (S$1.11) to $5.11 (S$6.68), depending on the flat type. Existing HDB flat owners will be covered by their fire insurance policies until these expire.

The plan only covers the cost of reinstating damaged internal structures and fixtures, as well as areas built and provided by HDB.

Residential fire incidents in Singapore rose 3.7% year on year to 970 last year, according to data from the Civil Defense Force. Most of the fires were caused by unattended cooking and electrical problems, Wong said.

Fires caused by battery-powered e-bikes have also been increasing since 2022, she said. “For a relatively smaller country like Singapore, the residential fire risk is a lot more common than we think,” she added.

The fire insurance market in Singapore is highly competitive, with about 61 general insurers offering similar products. Wong said the company’s "competitive rates, digital capabilities, and service commitment" set them apart. 

Etiqa’s home insurance, which can be added to the fire insurance plan, has earned high consumer ratings.

Still, Wong said there are challenges, including the lack of understanding about fire insurance. The company’s website details the differences between its fire insurance policies and the broader home insurance market.

Etiqa, a member of the Maybank Group,  has also beefed up its customer service to help clients understand technical insurance terms before and after they buy a policy, she added.