SINGAPORE, Aug 26 (Bernama-BUSINESS WIRE) -- The recent agreement to acquire AXA Insurance Pte Ltd (AXA Singapore) by HSBC Insurance (Asia-Pacific) Holdings Ltd (HSBC Insurance) demonstrates the continued growth potential of Singapore’s life insurance segment, according to a new AM Best commentary.
In its new Best’s Commentary, “HSBC’s Acquisition of AXA Singapore Highlights Singapore Life Insurance Growth Prospects,” AM Best states that demand for long-term financial planning and health protection is continuing to support Singapore’s life insurance market prospects. The HSBC Insurance-AXA Singapore deal takes place at a time when the Singapore life market has seen a strong rebound in weighted new business premiums recorded in the first half of 2021. In addition, recent and future life insurance growth is expected to be supported by the city-state’s attractiveness as a home for affluent and high net worth individuals.
Generally, AM Best is of the view that life insurance companies with international expertise in investment and wealth management have notable advantages in designing sophisticated products with more attractive investment terms and features — an important value proposition amid the current low-interest rate environment. Nonetheless, life insurers with product offerings that include significant investment risks/guarantees have to balance the attractiveness of these products with the capital requirements that arise for the insurer.
The health and employee benefits lines of business also remain important growth drivers for life insurers in Singapore. Nonetheless, AM Best notes that companies engaging in these line of business continue to face underwriting performance challenges, particularly for individual medical and critical illness products. In Singapore, aside from group health business, which delivered adequate profitability in 2020, health insurance is viewed as a difficult line of business due to the weak results of long-term individual policies.
Generally, AM Best is of the view that life insurance companies with international expertise in investment and wealth management have notable advantages in designing sophisticated products with more attractive investment terms and features — an important value proposition amid the current low-interest rate environment. Nonetheless, life insurers with product offerings that include significant investment risks/guarantees have to balance the attractiveness of these products with the capital requirements that arise for the insurer.
The health and employee benefits lines of business also remain important growth drivers for life insurers in Singapore. Nonetheless, AM Best notes that companies engaging in these line of business continue to face underwriting performance challenges, particularly for individual medical and critical illness products. In Singapore, aside from group health business, which delivered adequate profitability in 2020, health insurance is viewed as a difficult line of business due to the weak results of long-term individual policies.
To access a copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=312005.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Contact
Tran Nhat Trung
Financial Analyst
+65 6303 5019
trung.tran@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Myles Gould
Senior Director, Analytics
+65 6303 5020
myles.gould@ambest.com
Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
Source : AM Best
--BERNAMA
Contact
Tran Nhat Trung
Financial Analyst
+65 6303 5019
trung.tran@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Myles Gould
Senior Director, Analytics
+65 6303 5020
myles.gould@ambest.com
Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com
Source : AM Best
--BERNAMA
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