Singapore’s general insurance industry is set to grow by 7.2% by 2026, fuelled by private health and major infrastructure projects.
Forecasts by analytics specialist GlobalData indicate that the industry will grow from US$3.5bn in 2021 to US$5.1bn in 2026. The industry is projected to grow by 7.9% in 2022 and 6.7% in 2023, driven by strong uptake of property insurance, which registered the highest growth of 14.1% in 2021.
GlobalData points to property insurance, Singapore’s second largest general insurance line, which is expected to grow by 9.9% this year. This is mainly propelled by increased construction activity in the country, with contracts worth up to US$23bn likely to be awarded in the sector by the end of 2022. Demand for new infrastructure is expected to continue until 2028.
Major construction projects in the pipeline include phases 2 and 3 of the Cross Island Line, its Punggol Extension and the Downtown Line Extension to Sungei Kadut, as well as the Toa Payoh Integrated Development, at a total cost of US$3.3bn. Other projects under construction include the country’s US$3.3bn Marina Bay Sands Expansion and US$2.4bn East Coast Integrated Depot scheme.
The analytics specialist predicts that personal accident and health insurance, the third largest general insurance line, will grow by 7.5% between 2021 and 2026, driven by increased awareness for financial planning and protection.
“Healthcare inflation, which has been on the rise during the last few years, has resulted in a high cost of claims for insurers,” said Rokkam Eswara Jyothi, insurance analyst at GlobalData. “To maintain profitability, insurers will be prompted to increase their premiums for health and accident insurance policies.”
However, motor insurance – Singapore’s largest general insurance line – is expected to register moderate growth of 2.7% in 2022, due to a decline in vehicle sales following a tax increase by up to 5.9% this year. The tax rise led to a drop in car sales by 34.4% in August 2022 compared to the year before.