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Julien Descombes
Japan has effectively made L&H insurance highly accessible
No life and health insurance market fully inclusive INSURANCE PRODUCTS
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lthough Japan’s life and health insurance was deemed accessible, insurers in the industry are found to be weak in terms of upskilling customers and innovating its underwriting spectrum. A study by the Swiss Re Institute noted that Japan has an aggregate inclusion score of 0.66, just behind the United States, based on a study that measured inclusivity of L&H markets on three dimensions: availability, accessibility, and affordability. Japan was reportedly effective in making L&H insurance highly accessible to a broad spectrum of customers, evidenced by its novel
approaches to distribution and a high life insurance penetration rate. Other Asian countries that ranked in Swiss Re's top 10 for inclusive insurers included India in sixth place (0.52) and Indonesia in eighth (0.51). Consumers in advanced markets like Japan experience fewer difficulties accessing their L&H insurance services than those in emerging ones. “This is primarily driven by systemic factors like their financial markets being more established, leading to high levels of financial institution accountholding and credit usage,” Swiss Re stated in its report.
No L&H insurance market is fully inclusive
However, they are somewhat weaker in providing skills development opportunities for insurance professionals, and innovation on the underwriting spectrum, creating a deficit in the availability dimension, Swiss Re said. L&H insurance markets in advanced countries also provide a “wide range of cover types and innovative product options” that suit their consumer’s needs more than those in emerging markets, added Swiss Re. None fully inclusive The Swiss Re Institute report, however, underscored that no L&H insurance market is “fully inclusive.” To make L&H insurance markets in both advanced and emerging countries inclusive, the Swiss Re Institute said that they must perform consumer-focused market research across all segments. This is so that they can understand the needs of underserved customers and make the right strategic partnerships to increase accessibility of consumers to insurance products. “By making L&H insurance more affordable, available, and accessible, individuals and households are better equipped to withstand the financial challenges that occur when a primary breadwinner passes away or when they incur high costs of healthcare treatments,” said Julien Descombes, head of Swiss Re Institute’s life and health products reinsurance.
SINGAPORE’S LIFE INSURANCE INDUSTRY DOWN IN FIRST QUARTER
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he value of weighted new business premiums in Singapore fell by 13.6% in the first three months of 2023 compared to last year, according to data released by the Life Insurance Association of Singapore (LIA). This amounted to a total of US$790m (S$1.05b) in the January to March period. For single-premium products, it also fell to US$267.1m (S$355.7m) in Q1, 46% lower than the value reported in Q4 2022. Amidst the country’s sluggish economic growth during the first quarter of the year and apprehensions about a possible technical recession looming over Singapore in 2023, the decline in demand for singlepremium products can be linked to the turbulent macroeconomic conditions
and mounting interest rates in an intensively competitive market, said LIA. In contrast to the downward trend, the take-up of annual premium products jumped 24.7% QoQ to US$520m (S$692m) in total weighted premiums. In the first quarter of 2023, tied representatives played a pivotal role in obtaining a significant US$9.2b (S$12.3b) sum assured, which accounted for 40.3% of the total sum assured in the period. Financial advisory representatives also made a notable contribution, securing US$7.8b (S$10.4b) in sum assured, which represented 34.1% of the total sum assured for the same period. The insurance industry recorded a total of US$30.5b (S$23b) in sum assured during the first quarter.
Singapore Life Insurance Industry Figures, Q1 2023
Source: LIA Singapore
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