conditions in the first quarter of 2008 with industry body the
Singapore Life Insurance Association (SLIA) reporting new business
premium income of SGD2.993 billion ($2.2 billion), up 52 percent
compared with the first quarter of 2007.
However, the SLIA’s president Mark O’Dell cautioned that
conditions during the remainder of the year may not be as buoyant.
O’Dell’s caution centred on changes to regulations governing the
Central Provident Fund (CPF), a compulsory social security savings
scheme. There are three CPF accounts: Ordinary Accounts which can
be used for expenses such as home purchases and education, Special
Accounts for retirement savings, and Medisave Accounts for hospital
and medical insurance expenses.
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Workers can choose to invest via numerous avenues including
annuities, unit linked insurance products and endowment insurance
products.
Change to the CPF came in the form of a ruling specifying that as
from 1 April 2008 the first SGD20,000 in ordinary and special
accounts have to be held in an interest bearing CPF savings account
whereas before all funds could be placed in investment products.
Most noteably however, the SLIA reported that the CPF sector
accounted for SGD1.72 billion or 63 percent of single premium sales
and 58 percent of total sales in the first quarter of 2008.
Despite his short-term caution O’Dell stressed that there is plenty
of room for growth given that death payouts average only SGD40,000.
Singaporeans are “grossly under-insured,” said O’Dell.
