Accommodative financial conditions, including a 1.7 ppt drop in the 3M SORA, supported credit growth and insurance demand.

The finance and insurance sector expanded 3.7% year-on-year in Q4 2025, driven by robust banking credit growth and strong general insurance demand under progressively accommodative financial conditions. Trade-related and finance & insurance sectors were the key contributors to Singapore's Q4 2025 GDP performance, according to advance estimates from the Ministry of Trade and Industry. The sector contributed 13.8% to Singapore's GDP by expenditure in 2024, underscoring its structural importance to the economy.

Q4 2025 Sector Performance and Key Drivers

The finance and insurance sector's 3.7% year-on-year growth in Q4 2025 was led primarily by banking and insurance segments. Full-year 2024 GDP growth for the sector was 5.4% year-on-year, maintaining the strong momentum observed through 2025. Banking growth remained resilient, with total assets expanding at a compound annual growth rate of 6.8% over 2021–2024, as stated by Managing Director Chia Der Jiun in remarks on the MAS Annual Report 2024/2025. The trade-related and finance & insurance sectors were the primary contributors to Q4 2025 GDP, with the former benefiting from continued recovery in the global electronics cycle and front-loading of production ahead of anticipated trade restrictions.

General Insurance Outlook: 6.3% CAGR to 2030

The general insurance industry in Singapore is projected to grow at a compound annual growth rate of 6.3%, increasing from SGD 6.7 billion in 2026 to SGD 8.6 billion in 2030 in terms of gross written premiums (GWP), according to GlobalData. The market is estimated to have registered an annual growth rate of 6.7% in 2025, driven by economic expansion, rising demand for health insurance products, higher auto insurance premiums, and resilient property values.

Personal accident and health (PA&H), motor, property, and liability insurance combined accounted for 81.3% of general insurance GWP in 2025. Property insurance, the third-largest line with an estimated 19.1% share, is supported by investment in public infrastructure projects including the expansion of the rail network by 360 kilometers by 2030 and road projects such as the Changi Northern Corridor, North-South Corridor, and Tampines Walking and Cycling Town. Motor insurance, expected to account for 20.6% of GWP in 2025, is fuelled by a 25% increase in vehicle sales during January–September 2025 compared to the same period in 2024, driven by strong demand for battery electric vehicles under the government's Electric Vehicle Early Adoption Incentive scheme. Premium rates have also increased, supporting motor insurance growth of 6.7% in 2025 and a projected 6.2% in 2026.

Gross Written Premium (SGD B) (SGD B)Source: Orionmano Industries

Banking Sector Resilience and Credit Expansion

The banking sector remained resilient through 2025, supported by sound asset quality, strong capital buffers, ample liquidity and solid profitability. The overall non-performing loan (NPL) ratio declined for a fifth consecutive quarter to 1.2% in Q2 2025, with all major segments registering lower NPL ratios compared to a year ago. The sector is well capitalized: the capital adequacy ratio (CAR) stood at 18.2% and Tier 1 CAR at 16.7% in Q3 2025, well above minimum regulatory requirements, according to the ASEAN+3 Macroeconomic Research Office (AMRO).

Resident credit growth was underpinned by lending to trade-related sectors, which were in turn buoyed by front-loading of exports and strong global demand for electronics linked to AI-related products, as noted in the Monetary Authority of Singapore's (MAS) Financial Stability Review 2025. Household loans climbed steadily, underpinned by strong demand for housing and bridging loans, partly due to lower interest rates. Banking sector total assets grew at a 6.8% CAGR over 2021–2024, consistent with the sector's resilience.

Accommodative Financial Conditions as a Catalyst

Domestic interest rates fell sharply during 2025, diverging from U.S. interest rates. As of October 2025, the 3M compounded Singapore Overnight Rate Average (SORA) had fallen by 1.7 percentage points from end-2024, and 10-year government bond yields declined by 1.0 percentage point over the same period. Declining interest rates, coupled with a rise in the stock market index, contributed to easing financial conditions, according to AMRO.

This accommodative environment has directly benefited corporate Singapore. Singapore corporates have strengthened their financial positions over the past year, with leverage risk remaining contained and improvements in debt-servicing capacity underpinned by resilient corporate earnings and a more accommodative financing environment, as stated in the MAS Financial Stability Review. The overall banking financial vulnerability index level remained benign, with liquidity and maturity risks staying low in 2025. Banks maintained healthy liquidity positions and stable loan-to-deposit ratios, while credit to non-bank entities expanded at a healthy pace, supported by strong growth in loans to resident borrowers.

The easing of financial conditions has been a catalyst not only for credit demand but also for insurance product uptake, as lower borrowing costs reduce policy lapses and encourage new policy acquisition across motor, property, and health lines. Continued easing and sustained demand for insurance and banking services are expected to support the sector's growth trajectory into 2026, though risks from global tariff uncertainties and property sector vulnerabilities remain under monitoring by regulators and market participants.