How life insurers in Singapore are addressing the challenges of 2024:
Tall win Life:insurers in Singapore Is 15% Now.
Dennis Tan (pictured above), president of the Life Insurance Association (LIA), has outlined the organisation’s strategies for tackling the challenges of 2024 after the industry saw a decline in its most recent financial report for the year.
Tan spoke with Insurance Business Asia about his “insightful” first year in leadership in the first section of the interview. Tan now focuses on the key trends for the upcoming year, particularly given how risks and challenges in Singapore’s life insurance market are constantly changing.
D-SII and more stringent oversight:
AIA Singapore, Income Insurance, Prudential Assurance Company Singapore, and Great Eastern Life Assurance Company are the four “systemically important” insurers that Singapore announced earlier this year as part of a new framework.
The designation of these insurers represents a noteworthy advancement, as it will expose these companies, also referred to as domestically systemically important insurers (D-SII), to stricter oversight and higher regulatory requirements.
Tan stated that in the end, this designation will uphold Singapore’s standing as a major global financial centre while serving to advance and safeguard consumer interests.
“Given the sizeable customer base of all four D-SIIs combined, the D-SII framework is a positive step in ensuring the continued stability and resilience of the life insurance industry across more generations to come,” he stated.
“This action will further reduce the possibility of systemic risks that could affect a significant portion of Singapore’s consumer base.”
“The goal set by the Singaporean government is to achieve net-zero emissions by 2050,” Tan said.
The life insurance industry is anticipated to be significantly impacted by this, since insurers will have to make investments in sustainable assets and create new services and products to help with the net-zero transition.
He stated that the process of each member company establishing its own sustainability targets is moving forward.
Popular topic: implementing IFRS 17:
This year, the adoption of the new financial standard, IFRS 17, was another widely discussed topic in the sector.
Tan stated that as the organisation strives for greater uniformity throughout the sector, LIA will keep collaborating with member businesses on its implementation. Tan added that LIA is figuring out how to lessen the impact of the new standard on the companies that will be impacted.
The goal of implementing FIRS 17 is to improve financial statements’ clarity.
of insurers more pertinent, comparable, and open 3 for investors and all other stakeholders, he declared. “To achieve the level of consistency for reporting across all insurers, significant changes are needed, and we anticipate that this will be a continuous process.”
Problem: A decrease in policies with a single premium:
In the half-year results, the life insurance industry in Singapore saw a decline in new business premiums, particularly when compared to the prior period in 2022.
In response, Tan stated that these findings are the result of a decline in single premium policies in the face of macroeconomic uncertainty.
“This is not specific to the life insurance sector, as evidenced by Singapore’s growth projections for the second half of 2023 that have been revised lower due to ongoing inflation, downside risks in the global economy, and ongoing
tensions in geopolitics,” he said. The gross domestic product (GDP) growth estimate for Singapore was revised by the Ministry of Trade and Industry (MTI) in August 2023 from a range of 0.5% to 1.5% to 0.5% to 2.5%.
Positive outcomes were observed.
Tan noted that as the industry redoubles its efforts to safeguard customers, annual premium policies increased by 26.3%.
He anticipates that as long as consumers prioritise their healthcare needs and take action to close protection gaps, this uptake will continue throughout 2023.
Based on the insights obtained from the Protection Gap Study 2022, he said, “the industry is also exploring initiatives and taking actions to better address the protection needs of people in Singapore.”
Tan stated that the study’s findings suggest that product innovations and the streamlining of policy materials can improve the comprehension and applicability of insurance policies.
In order to create customised customer segment-led propositions, product solutions, and distribution strategies targeted at assisting particular groups with medium to high protection gaps, he added, “there is also the adoption of a customer profile and needs-based understanding approach.”
In order to better understand and meet their needs for protection and financial planning, we want to make it easier for undeserved members of the public (like platform workers) to reach accessible touch points, he concluded a rise in the use of AI
Tan has also been monitoring the growing use of artificial intelligence (AI) to enhance technological capabilities.
HDFC Life Share Price:
AI in conjunction with machine learning, predictive modelling, and data analytics
Learning has become one of the most effective tools for underwriters to use in order to analyse large datasets and make better decisions when evaluating risks, he said.
Although the life insurance sector has been using AI to improve operational efficiency for the past ten years, recent advancements in the field’s technology have made it possible for us to use AI more quickly and efficiently.
He claimed that artificial intelligence (AI) is “helping to transform other aspects of the insurance business in addition to improving risk assessment.”
“In the current industry, artificial intelligence (AI) and machine learning are already speeding up the processing of claims, greatly decreasing the time it takes from the submission of claims to settlement.”
According to Tan, this aids businesses in identifying fictitious or dubious claims. AI combined with data analytics, predictive modelling, and machine learning
Tan predicted that as AI continues to advance through more widely used applications throughout the industry, an improved insurance procedure will follow.
According to Tan, targeted marketing and AI-powered lead generation are two examples of how technology can be used to improve customer satisfaction and engagement.
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