Singapore general insurance industry to skyrocket to $4.2b by 2025
It is expected to grow at a compound annual growth rate of 5%.
The general insurance industry in Singapore will climb as high as $4.2b by 2025 according to a forecast by data and analytics firm GlobalData.
GlobalData predicts that the general insurance will grow at a compound annual growth rate of 5%, reaching $4.2b by 2025 from the previous $3.2b in 2020 in terms of gross written premiums (GWP).
The data and analytics firms attributed the growth to the resumption of economic activities, successful COVID-19 vaccination rollout programs, and relaxation on travel restrictions.
GlobalData Insurance Analyst Manogna Vangari said that the Singaporean economy is expected to pose a strong recovery in 2021 and grow by 7% following the 5.4% decline in 2020.
“The general insurance industry is also expected to return to stable growth in 2021, after a flat growth of 0.2% in 2020, in line with the economic recovery,” Vangari said.
An analysis of GlobalData’s Global Insurance Database reveals that motor insurance was the largest general insurance line in Singapore with a GWP share of 25.8% in 2020. GlobalData expected it to grow by 1.2% in 2021 after stagnating at 0.9% in 2020 due to restrictive traffic movements, and lower vehicle sales, which resulted in lower premium collection in 2020.
Meanwhile, electric vehicles sales grew by over 80% during September 2020–2021, supporting the demand for motor insurance.
Personal accident and health (PA&H) and property insurance were the second and third-largest general insurance segments with a share of 19.0%, and 18.4%, respectively, in 2020.
PA&H insurance provided by general insurers is expected to grow by 3.4% in 2021, and 3.8% in 2022 supported by demand for a popular hospitalisation insurance plan – Integrated Shield Plan (IP).
IP plans cover additional hospitalization expenses, and benefits such as costs of private hospitals, and a wider choice of specialist doctors, that are not covered in the universal government scheme known as MediShield Life. Currently, around 67% of the population has an IP insurance plan, which is offered by seven insurance companies.
Property insurance is expected to grow by 7.0% in 2021 supported by a recovery in construction output, which is expected to reach $20.3b in 2021.
“Economic recovery and gradual opening of international travel are expected to revive the demand for general insurance in 2021. The industry’s growth momentum will consistently pick up over the next five years aided by product innovation, digitalisation, and infrastructure development projects,” Vangari said.