Singapore’s life insurance sector entered 2025 with a sharp shift in fortunes. While payouts to policyholders and beneficiaries fell dramatically compared to a year earlier, new business sales continued to climb, powered by the rising popularity of investment-linked products. The latest half-yearly figures from the Life Insurance Association, Singapore (LIA) reveal a market that is recalibrating after an extraordinary 2024.
Payouts Fall After Record Highs
In the first half of 2025, life insurers paid out S$6.35 billion (US$5.0 billion) to policyholders and beneficiaries, down 42.1% from the S$10.96 billion disbursed in the same period of 2024.
The bulk of 2025’s payouts—S$5.32 billion—came from maturing policies, while S$1.03 billion went to claims for death, critical illness, and disability across more than 10,900 policies.
A year earlier, maturities alone accounted for S$10.04 billion, with claims at S$927 million spread across 10,600 policies. The contrast points to a normalisation in 2025, following an unusually high volume of maturities in 2024.
Investment-Linked Products Gain Momentum
Despite the drop in payouts, new business remained robust. Weighted new business premiums hit S$2.99 billion in H1 2025, up 7.7% year-on-year. While this growth was slower than the 26–30% surge seen in H1 2024, it still reflects strong consumer demand for life insurance.
Much of the momentum came from investment-linked products (ILPs), which captured 43% of new sales in 2025, up from 37% a year earlier. Participating products held steady at around 24%, while non-participating products dipped slightly to 33%.
This tilt toward ILPs signals growing appetite for policies that combine protection with investment potential, particularly in an era of economic uncertainty and rising living costs.
Banks Strengthen Their Role
The way policies are sold also shifted. In H1 2025, bank representatives accounted for 35.5% of weighted new premiums, up from 32.1% a year before. Tied representatives, once the largest channel, fell to 27.8%, while financial advisers held steady at about a third.
Digital channels remain small in dollar terms, contributing just 1.4% of weighted new premiums, but their reach is far greater in terms of policy count—making up 11.5% of all policies sold in 2025. Though slightly down from 14.7% in 2024, this figure highlights the staying power of online sales among younger, cost-conscious consumers.
Employment and Market Structure Stay Steady
At the structural level, the industry remains dominated by large players. Insurers with “Normal” licenses generated 99% of new sales in both 2024 and 2025, while “Defined Market Segment” insurers contributed just 1%.
Employment has been broadly stable, with 9,493 staff in mid-2025—down only 1% from the year before. Tied representatives declined from 13,084 in 2024 to 12,197 in 2025, reflecting slow but steady rationalisation as insurers adapt to digitalisation and changing sales models.
A Market in Transition
The year-on-year comparison reveals an industry in transition. H1 2024 was marked by record-high payouts, driven by a wave of maturing policies. H1 2025, by contrast, was a period of normalisation, with payouts shrinking but new business remaining solid.
The rise of ILPs suggests consumers are increasingly comfortable blending protection with investment, while the distribution data shows banks consolidating their lead and digital channels continuing to nibble at the edges.
For insurers, the challenge ahead will be balancing growth with sustainability—managing payout cycles while responding to shifting consumer expectations for higher returns and greater convenience. If 2024 was a year of extraordinary claims, 2025 is shaping up as a test of the industry’s ability to sustain momentum in a more typical environment.
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