Longer life is a potential financial nightmare for Singaporeans
This is the case for more than half of uninsured retirees.
Long life is considered a blessing by many. But for retirees, the cost of living, increasing risks of getting sick, and rising medical costs are their nightmare. Because of this, paying premiums for insurance is often overlooked. This is evident in the survey by the Life Insurance Association of Singapore which found that more than 52% of Singaporeans aged 60 and up are uninsured.
In an interview with Insurance Asia, Raymond Ong, CEO of Etiqa Singapore, said that long life expectancy creates a huge protection gap amongst Singaporeans.
“We see that Singapore has one of the highest life expectancies in the world. Today, one in seven Singaporeans are aged 65 and above, this number will become one in five by 2030,” Raymond explained.
It is not only older Singaporeans that are affected by the longer life expectancy. According to Raymond, with the declining resident crude birth rate at 8.6%, Singapore millennials are becoming the sandwich generation or the generation caught between caring for their ageing parents and raising a family whilst preparing for their retirement.
“Over two-thirds of millennials that did not have adequate insurance coverage [because they] felt that they could not afford to purchase life insurance,” Raymond said, citing Etiqa’s recent survey.
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He warned that without adequate financial coverage, the financial consequences can be devastating for a young family in the event of a death or critical illness of a sole breadwinner.
“The real issue to me is that no matter how stretched a family's budget is, the importance of insurance is often overlooked, and the consequences are only evident when it is too late,” he added.
Focus on customer service
The basic insurance needs of customers do not change much. What needs to be further developed and customised is the way insurers reach out to their customers, Raymond said.
Raymond emphasised that the bulk of customer needs centre on two things: protection and retirement provision. He said this is best served through traditional insurance concepts that involve the pooling of risk amongst a bigger group of customers as well as dollar-cost averaging, which leads to more sustainable and steady long-term returns.
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For the insurance industry’s future, Raymond said groundbreaking works will pop up in the area of data analytics. With data analytics, insurers can efficiently identify and manage risk, reach out to customers with the appropriate offerings, and make certain aspects of insurance coverage more tailored for certain customers.
Insurers are also bound to focus on automation to cater to more tech-savvy customers to do more by way of self-service and improve customer experience by enabling a 24-hour assistance platform.
“The insurance industry has a key part to play in highlighting the importance of insurance protection and retirement provision. As an industry, we fulfil a very important social need of ensuring that the family's financial security is assured in times of need. We must promote the importance of being adequately insured,” Raymond said.