The general insurance industry in Singapore will skyrocket to $4.2 billion by 2025 according to a forecast by data and analytics firm GlobalData. The forecast also mentioned that the general insurance will grow at a compound annual growth rate of 5 percent, helping the industry reach its predicted potential, compared to the previous $3.2 billion in 2020, in terms of gross written premiums (GWP).
The data and analytics firm mentioned that the reason for this growth is because economic activities resumed, a successful Covid-19 vaccination program and the relaxation of travel restrictions. Manogna Vangari, an insurance analyst at Global Data said that Singapore’s economy is expected to grow by 7 percent in 2021 after suffering a 5.4 percent decline in 2020 because of the pandemic.
She told the media, “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. Economic recovery and the 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.”
Motor insurance is the largest general insurance line in Singapore with a GWP share of 25.8 percent in 2020. The motor insurance line is also expected to grow by 1.2 percent in 2021 after getting stuck at 0.9 percent in 2020 due to travel restrictions and the low sale of motor vehicles. Electric vehicle sales grew by over 80 percent before September and it will contribute to higher demand for motor insurance.
Personal accident and health (PA&H) and property insurance were the second and third-largest general insurance segments and constituted a share of 19 percent and 18.4 percent respectively in 2020. This insurance sector is expected to grow by 3.4 percent in 2021 and 3.8 percent in 2022, primarily driven by the demand for a popular hospitalisation insurance plan – Integrated Shield Plan (IP).
IP plans cover additional hospitalization expenses and benefits like private hospital bills, access to specialist doctors that are not covered under the universal government scheme known as MediShield Life. Reports suggest that around 67 percent of the population has an IP insurance plan, which is offered by seven insurance companies.
Property insurance also saw a rise and is expected to grow by 7 percent in 2021 and will be supported by a recovery in construction output, which is expected to reach $20.3 billion in 2021.