SINGAPORE - Consumers here seem to be snapping up new insurance policies, going by fresh figures released by the Life Insurance Association (LIA).
According to statistics released by the 23-member association yesterday, its members raked in 28 per cent more premiums from the sale of life and health insurance policies last year, compared to 2012, going by a weighted measuring scale.
Weightage differed depending on the length of premium payment periods. The measurement found that premiums grew from $2,176 million in 2012 to $2,789 million last year.
The rise came mostly from more takings in the health insurance category, which surged 145 per cent, from $186 million in 2012 to $456 million last year.
This, announced the LIA, was due to firms adjusting their premiums upwards "in line with the upward revision to the benefits and premium rate of the basic MediShield" by the Government in March last year.
Integrated Shield plans and their riders, that formed 94 per cent of newly bought policies in 2013, combine basic MediShield with higher levels of hospitalisation benefits to cover Class B1 and Class A wards or private hospitals.
Claims inflation from escalating medical costs also contributed to the sharp increase in total health insurance premiums. Total premiums paid for life insurance also went up 17 per cent year-on-year.
Explaining the general growth, Dr Khoo Kah Siang, president of LIA, said: "Annual-premium products were the biggest drivers of growth for the year, echoing a more stable market environment and improved consumer sentiment."
During the media briefing held at LIA's headquarters in Anson Road yesterday, Dr Khoo also gave an update on a recommendation made by Financial Advisory Industry Review (Fair) in its January 2013 report.
In the report, presented to the Monetary Authority of Singapore (MAS), Fair asked that the LIA and MAS work with each other to launch a website to give consumers comparisons of different insurance policies.
Another recommendation was for consumers to be given the option to bypass agents and buy policies directly from firms at a nominal administrative charge.
Dr Khoo said that LIA is working to implement both recommendations, but that it was "not so straightforward". Comparing one policy to another, for instance, takes time. Discussions are still ongoing on the best way to compare the policies, he said.
When asked if he felt that the Government's provision of universal medical coverage under the new MediShield Life programme would affect the bottom lines of insurance firms, he said no, adding: "I believe there will still be a need for private insurers to provide enhanced coverage."
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