Life insurance underwriting margins in Singapore range from 3-8% of premiums, while general insurance combined ratios are near 90-95% as of 2024.

Industry Overview: Premium Growth and Margin Dynamics

Singapore’s insurance industry rebounded in 2024, with gross premiums rising 10.67% year-on-year, reversing a 9% contraction in 2023, according to data compiled by Insurance Asia from Monetary Authority of Singapore (MAS) filings. Life insurance premiums climbed 10.93%, while general insurance premiums rose 1.61%. The market, valued at approximately USD 17 billion in combined weighted premiums, comprises 18 life insurers, 30 general insurers, and two life reinsurers, underscoring the breadth of the city-state’s insurance sector.

Great Eastern Life Assurance Co. Ltd. ranked first with $10.2 billion (S$13.2 billion) in premiums in 2024. Group CEO Greg Hingston attributed the performance to steady growth in core product lines and broadening into wealth management offerings, with shorter-term single premium plans performing well. The recovery followed a period when softer demand for life insurance and a preference for fixed deposits weighed on premiums amidst elevated interest rates.

Life Insurance Underwriting Margins

Life insurance underwriting margins in Singapore range from 3% to 8% of premiums. This margin range reflects the diversity of product lines within the life sector, from traditional protection products to wealth, investment, and retirement solutions. The lower end of the range applies to more commoditised products with thinner margins, while the upper end reflects specialised protection products with higher risk retention and lower distribution costs.

The margin range is consistent with industry benchmarks for mature Asian insurance markets, where life insurers operate on relatively compressed underwriting spreads due to competitive pricing, regulatory constraints, and the predominance of savings-oriented products. Medical insurance profit margins are typically around 2–2.5%, according to a November 2024 discussion paper from the Singapore Actuarial Society. The paper notes that shareholders in long-term medical insurance business can expect profit margins of 2–2.5% (= 10% on capital requirement of 20–25%), highlighting the capital-intensive nature of this sub-segment.

Distribution costs for medical insurance account for approximately 12% of premiums collected, encompassing commissions, bonuses, indirect costs of benefits and services, agency allowances, and profit commissions. The Singapore Actuarial Society analysis of 7 Integrated Shield Plan insurers covering nearly 4 million lives shows that gross premiums per life grew from S$406 in 2014 to S$668 in 2023 (10-year CAGR of 5.7%), while gross claims per life grew from S$252 to S$548 (10-year CAGR of 9.0%). The divergence between premium and claims growth rates has compressed medical insurance margins over the decade.

General Insurance Combined Ratios

General insurance combined ratios in Singapore are near 90–95% as of 2024, indicating profitable underwriting performance. A combined ratio below 100% signifies underwriting profitability, with the lower end of the range reflecting strong pricing discipline and favourable claims experience.

The General Insurance Association of Singapore reported that gross written premiums for domestic and offshore general insurance segments rose 10.1% to S$10.2 billion in 2023, generating underwriting profit of S$608.1 million. The implied industry combined ratio of approximately 94% is consistent with the 90–95% range observed in recent years.

Gross Written Premiums (S$M)Source: Orionmano Industries

The general insurance segment benefits from diversification across lines including motor, property, general liability, and health. The motor insurance segment, which accounts for a significant share of premiums, has seen improved pricing discipline following regulatory interventions. Property insurance has benefited from higher property values and increased take-up rates.

Analysts have identified cyber risk as a key underwriting challenge for the general insurance sector going forward. HSBC Carter noted that companies’ willingness to underwrite cyber risks will be “a key point to watch on the longer term trends,” with implications for pricing adequacy and combined ratio stability.

Outlook and Structural Considerations

With the expected decline in fixed deposit rates, single-premium endowments may regain popularity, supporting life insurance premium growth. Analysts expect Singapore’s life sector to grow 3% to 4% in the next two years, driven by an ageing population and the need to bridge the protection gap. Teh, cited in Insurance Asia, said he expects this growth trajectory amidst demographic tailwinds.

The medical insurance segment is likely to see continued margin pressure. The 10-year data from the Singapore Actuarial Society shows claims growing at 9.0% CAGR versus premium growth of 5.7% CAGR for Integrated Shield Plans, suggesting that premium increases will need to outpace medical inflation to maintain underwriting margins.

For general insurance, the combined ratio around 90–95% leaves room for adverse claims development. However, the industry’s underwriting profit of S$608.1 million in 2023 provides a buffer. The key risk is a hardening of claims trends, particularly in motor and property lines, which could push combined ratios toward the upper end of the current range.

Regulatory oversight from MAS remains a factor. The regulator’s annual data collection and reporting requirements provide transparency into insurer performance. Insurers with combined ratios consistently above 100% may face regulatory scrutiny and capital requirements.