Banking and life insurance buoy expansion as fund management weakens; MAS signals continued support in 2026.

Growth Moderates in 2025

Singapore's finance and insurance sector expanded by 4.3% in 2025, easing from the 7.3% growth recorded in 2024, according to full-year data from the Ministry of Trade and Industry (MTI) as cited in FPA Financial's February 2026 market view. The moderation reflects a return toward trend growth after a stronger 2024, with the sector remaining broadly resilient despite headwinds that weighed on specific segments. The 2025 figure represents a near-halving of the prior year's pace, though the absolute level of activity remained elevated by historical standards.

Growth Rate (%)Source: Orionmano Industries

The sector's performance was consistent with the broader pattern observed across the year: MTI data cited by FPA showed that growth through the first three quarters of 2025 had already reflected the moderating trend, with the full-year figure confirming the deceleration. The 4.3% expansion places Singapore's financial services sector among the more resilient components of the domestic economy, though the slowdown signals that tailwinds from the post-pandemic recovery cycle have diminished.

Banking and Insurance Drive Expansion

Growth in 2025 was concentrated in banking and insurance, with the fund management segment delivering a markedly more subdued performance. Banks benefited from sustained credit intermediation activity amid accommodative financial conditions, maintaining healthy lending volumes even as net interest margins compressed in a lower-rate environment. The insurance segment was supported by robust performance in life insurance, which contributed materially to the sector's overall expansion.

In the domestic general insurance market, gross written premiums rose 8.4% year-on-year to S$6.1 billion (US$4.76 billion), according to data from the General Insurance Association (GIA) of Singapore. Combined gross written premiums for the domestic and offshore segments grew 3.7% to S$11.2 billion. The domestic general insurance segment posted solid underwriting performance: underwriting profit surged 32% year-on-year to S$289 million (US$225.42 million), up from S$219 million in 2024. This improvement occurred despite a 8.7% rise in net incurred claims to S$1.8 billion, driven by higher motor and property claims. Motor insurance claims alone rose 11% year-on-year even as accident numbers remained stable, as road traffic fatalities reached a 10-year high. Property claims increased following a 3% rise in fire incidents to 2,050 cases, alongside several large-scale property losses.

The fund management segment, by contrast, was weighed down by the pullback in global equity markets in November 2025. That drawdown dampened asset valuations and reduced appetite for new mandates, contributing to the overall growth moderation. The divergence between banking and insurance on one hand, and fund management on the other, highlights the idiosyncratic nature of the sector's 2025 performance.

Regulatory Support and Market Outlook

The Monetary Authority of Singapore expects the finance and insurance sector to remain supported by broadly accommodative macroeconomic and financial conditions in 2026, according to FPA Financial's February 2026 report. A low-interest-rate environment is projected to continue sustaining credit demand and insurance product uptake, though it may further pressure fund management margins.

Several regulatory measures implemented in 2024 are now embedded in the operating framework. In November 2024, MAS introduced a streamlined insurance product approval process intended to reduce time-to-market for new offerings. The Cybersecurity (Amendment) Bill, passed in May 2024, tightened data security and digital resilience requirements across the financial sector. In July 2024, MAS issued updated Fit and Proper Criteria guidelines to strengthen competency and integrity standards within the insurance industry. These measures collectively aim to foster consumer confidence and market stability.

Cross-border merger and acquisition activity in Singapore's insurance sector, which had been elevated in prior years, slowed notably in 2025. However, domestic restructuring increased as incumbent players sought to consolidate market positions. Notable examples include Liberty's restructuring of its Asia-Pacific insurance business, with the transfer of its Singapore operations from Liberty Insurance Pte Ltd to Liberty Specialty Markets effective 1 January 2026, alongside the creation of a combined Liberty brand in Asia. Smaller-scale business reorganisations were also undertaken by Allianz and RGA in Singapore, as reported by Chambers and Partners.

Business sentiment in the finance and insurance sector improved in the fourth quarter of 2025. The Singapore Business Federation's National Business Survey Q4 2025 reported that the Business Sentiment Index rose 1.2 points to 53.4, ending a six-month decline. Insurance and banking were among the sectors showing the strongest improvement on the growth confidence measure, which rose to 57.7, the highest level recorded in 2025. Sector-level policy sentiment was also strongest in insurance and banking, alongside IT.

Looking ahead to 2026, accommodative macroeconomic and financial conditions should continue to underpin sector growth. However, potential headwinds remain. Global market volatility could further affect fund management performance, and cross-border M&A activity may remain subdued if geopolitical uncertainties persist. The trajectory of the sector will depend on the interplay between domestic demand resilience and external financial conditions.