Growth moderated from 7.3% in 2024 amid subdued fund management; overall economy expanded 5% in 2025.

Sector Growth Moderates But Remains Resilient

Singapore’s finance and insurance sector grew 4.3% in 2025, decelerating from the 7.3% recorded in 2024, according to the FPA Financial Services Market View published in February 2026. The expansion was driven primarily by banking and life insurance segments, supported by accommodative financial conditions and sustained credit intermediation. The overall Singapore economy grew 5.0% in 2025, easing from 5.3% in the prior year, with the Ministry of Trade and Industry (MTI) citing manufacturing, wholesale trade, and finance and insurance as the main growth drivers.

Year-on-Year Growth (%)Source: Orionmano Industries

The sector's performance underscores its resilience even as year-on-year growth moderated. The FPA report attributes the deceleration primarily to weaker global market conditions affecting fund management activity.

Banking Segment: Credit Intermediation Under Accommodative Conditions

Banks benefited from sustained credit intermediation activity amid accommodative financial conditions throughout 2025, the FPA report notes. This environment supported lending growth and balance sheet expansion across the banking sector.

The banking sector's longer-term trajectory is evident in asset growth figures. According to Chambers and Partners' Banking & Finance 2025 guide, total assets in Singapore's banking sector grew at a compound annual rate of 6.8% from 2021 to 2024. This period of sustained expansion has reinforced Singapore's standing as a resilient regional financing hub.

Private credit initiatives have also gained momentum. The Singapore government announced in its February 2025 Budget a SGD1 billion Private Credit Growth Fund, designed to provide additional financing options for high-growth local enterprises. This followed a late-2024 announcement by a major entity establishing a wholly-owned private credit operation with an initial SGD1 billion portfolio comprising direct investments and credit funds.

Insurance Segment: Record Life Insurance Premiums Drive Growth

The life insurance segment posted record performance in the first half of 2025. The Life Insurance Association, Singapore (LIA Singapore) reported on 13 August 2025 that the industry achieved S$2.99 billion in weighted new business premiums for H1 2025, an increase of 7.7% compared with the same period in 2024. This marked the highest first-half total since before the pandemic.

Annual premium policies saw particularly strong uptake, with a 22% increase in H1 2025 versus H1 2024, reflecting sustained consumer demand for long-term protection and savings products. Group Life & Health premiums grew 15% from Q2 2024 to Q2 2025, reaching S$2.76 billion, with Accident and Health accounting for 74.1% of that total.

The Monetary Authority of Singapore's (MAS) November 2025 Financial Stability Review corroborates this picture. The direct life insurance sector experienced an increase in new business premiums for H1 2025 compared with the prior-year period, driven primarily by sales of investment-linked policies. The Review also notes that the direct general insurance sector reported solid gross premium growth for H1 2025, with favourable underwriting results and investment income. Industry profit levels remained stable over recent quarters, and the reinsurance sector has remained resilient with steady gross premiums and positive underwriting results.

Fund Management and Broader Industry Sentiment

In contrast to banking and insurance, the fund management segment experienced more subdued activity in 2025, according to FPA. This reflected weaker global market conditions, particularly the pullback in global equity markets in November 2025, which weighed on performance and investor sentiment.

Broader business confidence indicators, however, painted a more optimistic picture for financial services. The Singapore Business Federation's National Business Survey Q4 2025 edition, as reported by Insurance Asia, showed the Business Sentiment Index rising 1.2 points to 53.4 in Q4 2025, ending a six-month decline. Insurance and banking were among the sectors showing strongest improvement. Growth confidence across businesses rose from 55.4 to 57.7—the highest level recorded in 2025—with insurance and banking sectors again highlighted for the strongest improvement on that measure.

Looking ahead, MAS expects the finance and insurance sector to remain supported by broadly accommodative macroeconomic and financial conditions, including a low-interest-rate environment, into 2026. The FPA report notes that the low-rate environment will continue to shape business conditions, with implications for net interest margins, investment returns, and consumer demand for insurance products. The sector’s ability to sustain growth will depend on how institutions navigate these conditions while prioritising transaction security and meeting evolving customer needs.