Steady premium growth and modest claims experience supported profitability as total weighted new business premiums rose 11.3% to S$6.53 billion.

Industry Combined Ratio Holds at 85–90%

Singapore life insurers maintained combined ratios in the 85–90% range in 2025, according to industry analysis, as favorable mortality and morbidity experience offset the costs of a record expansion in new business. The combined ratio—a key measure of underwriting profitability where a figure below 100% indicates an underwriting profit—remained in a healthy band that reflects disciplined pricing and favorable claims trends across the sector.

The ratio was underpinned by a moderate increase in claims. Death, total permanent disability (TPD) and critical illness (CI) claims rose only 5.5% year-on-year to S$2.05 billion in 2025, according to the Life Insurance Association, Singapore (LIA). This increase trailed the 11.3% growth in total weighted new business premiums, contributing to favorable loss ratios. Total claims payouts across the industry reached S$14.23 billion in 2025, but the vast majority—S$12.17 billion—was for policies that matured, not mortality or morbidity events. This structure of payouts, dominated by maturities rather than claims on risk, supports the industry's ability to maintain combined ratios in the mid-80s to low-90s range even as premium volumes grow.

Annual Premium Business Drives Record New Business Growth

Total weighted new business premiums hit S$6.53 billion in 2025, an 11.3% increase from 2024, marking a record high for the Singapore life insurance sector (LIA, February 2026). The growth was primarily driven by annual premium policies, which rose 13.0% in the fourth quarter of 2025 compared to the same period the prior year. Single premium policies also contributed, reaching S$1,506.1 million in the second quarter of 2025 alone.

The sustained preference for regular-premium products signals that consumers are committing to longer-term protection and savings plans, a shift that provides insurers with more predictable revenue streams and supports stable combined ratios. The LIA attributed the growth to ongoing macroeconomic uncertainty, which has driven Singapore residents to prioritize both protection and wealth accumulation.

Health Insurance Penetration Deepens as Integrated Shield Plans Dominate

Health insurance remains a critical component of the industry's premium base, with Integrated Shield Plans (IPs) continuing to dominate. At end-2025, 3.00 million lives—approximately 71% of Singapore residents—were protected by IPs, which provide optional additional coverage on top of the public MediShield Life scheme (LIA, February 2026).

Premiums for IPs and IP riders grew 19.6% year-on-year in 2025, reaching S$665.6 million for the full year. IP premiums accounted for 90% of total individual health insurance premiums in 2025, while the remaining 10% comprised other medical plans and riders. The strong growth in health insurance premiums, combined with the high penetration rate, provides a stable and growing revenue base for insurers. However, rising medical costs remain a key risk to loss ratios in this line of business, which insurers will need to manage through premium adjustments and claims management protocols.

Mortality and Morbidity Experience Supports Profitability

The direct link between claims experience and the combined ratio is clearest in the mortality and morbidity data. Death, TPD and CI claims totaled S$2.05 billion in 2025, a moderate 5.5% increase from the prior year. This growth rate was less than half the 11.3% rise in total weighted new business premiums, a divergence that directly supported the industry's combined ratio performance.

The overall claims payout picture reinforces this favorable dynamic. Of the S$14.23 billion paid out by the life insurance industry in 2025, only S$2.05 billion was attributable to death, TPD and CI claims. The remaining S$12.17 billion went to policies that matured—a natural and expected liability that does not affect the loss ratio in the same way as risk claims. This structure means that the industry's core underwriting risk—mortality and morbidity—is producing claims growth that is well contained relative to premium expansion.

Investment-Linked Plans Gain Market Share as Savings Demand Rises

The product mix shift toward investment-linked plans (ILPs) has been a defining feature of the 2025 results. ILPs made up 44% of total weighted new business premiums in 2025, up 27.8% year-on-year from S$2,253 million to S$2,880 million (LIA, February 2026). Par products accounted for 24% of total weighted new business premiums, while non-par products accounted for 32%.

The strong demand for ILPs reflects consumer preference for wealth accumulation products that combine insurance protection with investment returns. This shift has implications for the combined ratio: ILPs typically carry lower mortality risk than traditional protection products, as a portion of the premium is directed to investment components. The growing share of ILPs in the product mix may therefore contribute to maintaining favorable loss ratios, even as it shifts revenue composition toward fee-based income rather than pure risk premium.

%Source: Orionmano Industries

Outlook

Forward-looking, sustained demand for wealth accumulation products and stable mortality trends suggest combined ratios could remain in the 80–90% range in 2026. The strong momentum in annual premium business and ILP uptake provides a foundation for continued revenue growth. However, investment volatility—particularly given the market-dependent returns of ILPs—and rising medical costs pose counter-risks that could pressure loss ratios, especially in the health insurance segment. Insurers that maintain disciplined underwriting and pricing will be best positioned to preserve the favorable combined ratio performance achieved in 2025.