Growth moderated from 7.3% in 2024 as fund management lagged; banking driven by domestic credit intermediation.
By Wei Chen·April 7, 2026·4 min readOrionmano Industries
Growth moderated from 7.3% in 2024 as fund management lagged; banking driven by domestic credit intermediation.
Singapore's finance and insurance sector expanded 4.3% in 2025, a moderation from 7.3% growth in 2024, driven by banking and insurance while fund management faced headwinds from global equity markets. The deceleration reflects a normalization after the post-pandemic rebound, with the Monetary Authority of Singapore (MAS) having projected 4%–5% annual growth under the Financial Services Industry Transformation Map (ITM) 2025.
Sector Overview and Macro Context
The finance and insurance sector's 4.3% full-year expansion in 2025 marked a significant easing from the 7.3% recorded in 2024, according to data from the Ministry of Trade and Industry cited by FPA Financial. The moderation was anticipated under the MAS Financial Services ITM 2025, launched in September 2022, which projected the sector to grow by an average of 4% to 5% per annum during 2021–2025 and create 3,000–4,000 net jobs annually.
Broader business sentiment in Singapore showed signs of stabilization in late 2025. The Singapore Business Federation's National Business Survey Q4 2025 edition reported the Business Sentiment Index rising 1.2 points to 53.4, ending a six-month decline. Insurance and banking were among the sectors with the strongest performance, and growth confidence across businesses rose to 57.7, the highest level recorded in 2025.
The accommodative financial conditions cited by MAS provided a supportive backdrop for credit intermediation and insurance activity, even as global equity market volatility weighed on fund management returns.
Banking grew 4.4% in 2025, supported by sustained credit intermediation amid accommodative financial conditions. Domestic credit strengthened materially: loans to residents rose 6.1%, driven by a turnaround in lending to the manufacturing sector, which had contracted in prior periods. This was partially offset by weaker loans to business services, a segment that had been a traditional driver of Singapore's corporate lending.
Consumer lending, including housing loans, picked up during the year, reflecting improved household confidence and the impact of stable interest rate conditions. Externally, loans to non-residents increased 3.4%, supported by stronger lending to the Americas, indicating sustained demand for Singapore-based credit intermediation from international counterparties.
The banking segment's 4.4% growth places it slightly below the sector average, although its absolute contribution to value-added remains the largest among the sub-segments given its scale.
Insurance and Auxiliary Services
Auxiliary financial services expanded 5.0% in 2025, the fastest growth rate among the major sub-segments, led mainly by payment players that benefited from higher regional spending. This category includes payment processing firms, financial advisory services, and other fee-based intermediaries that have expanded alongside Singapore's role as a regional payments hub.
The insurance segment was supported by strong performance in life insurance, which benefited from sustained demand for savings and protection products amid demographic shifts. In the general insurance market, domestic gross written premiums rose 8.4% year-on-year to S$6.1 billion (US$4.76 billion) in 2025, according to data from the General Insurance Association of Singapore. However, net incurred claims for the domestic segment increased 8.7% year-on-year to S$1.8 billion (US$1.40 billion), reflecting rising medical costs and claims frequency.
Looking ahead, GlobalData projects Singapore's general insurance industry will grow at an annual rate of 6.4% in 2025, reaching S$8.1 billion in gross written premiums by 2029, supported by regulatory developments, economic expansion, and increasing demand for private health insurance driven by an ageing population—those aged 65 and above are expected to constitute 24.1% of the population by 2030.
Fund Management and Market Headwinds
Fund management grew 5.1% for the year, as accommodative financial conditions and improving sentiment boosted net inflows. However, the segment was weighed down by the pullback in global equity markets in November 2025, which compressed asset valuations and dampened performance fees. Growth in fund management was more subdued compared to banking and insurance, reflecting weaker global market conditions that constrained both inflows and mark-to-market returns.
Despite the near-term headwinds, fund management remains a structurally significant sub-sector for Singapore, particularly as asset managers continue to establish regional hubs in the city-state. The 5.1% growth rate, while below the 2024 pace, still exceeded the sector-wide average of 4.3%, indicating that net inflows remained positive even amid market turbulence.
The broader outlook for Singapore's financial services sector remains constructive. MAS expects the finance and insurance sector to remain supported by broadly accommodative financial conditions, while embedded finance—projected to grow 7.1% in 2025 to reach US$8.48 billion—and regulatory initiatives like the ITM 2025 could sustain growth at 4–5% annually through 2030.