Singapore life insurers pay out over S$5 billion in Q1, the highest for quarter since 2021

[SINGAPORE] The local life insurance industry paid out S$5.08 billion in claims and maturity payouts to individuals and families in Singapore in the first quarter of 2026, marking the highest Q1 payout since 2021.

The industry also recorded a 12.9 per cent year-on-year growth in sales, or total weighted new business premiums, to S$1.67 billion in Q1 2026, up S$191 million from S$1.48 billion in the previous corresponding period.

The Life Insurance Association, Singapore (LIA Singapore), announced the figures on Wednesday (May 13) as part of the industry’s Q1 results.

The association noted that the industry fulfilled its commitments to policyholders, with 5,507 individual life policies successfully claimed, resulting in a total payout of S$555 million for critical illness, death and total permanent disability. In addition, S$4.52 billion was paid out for 87,402 policies that matured within the same quarter.

Under individual health policies in Q1 2026, policyholders of Integrated Shield Plans (IPs) and IP riders received the majority of an additional S$712.1 million in claims.

Taken together, life and health insurance claims and maturity payouts reached S$5.79 billion in the first three months of this year.

In Q1 2025, the life insurance industry paid out S$2.77 billion to policyholders and beneficiaries, a decrease of 44.7 per cent compared with the same period in 2024. Of this amount, S$2.21 billion was for policies that matured and the remaining S$559 million was for death, critical illness or disability claims.

Chan Wai Kit, executive director at LIA Singapore, told The Business Times: “The higher level of claims and maturity payouts in Q1 2026 reflects both the scale of protection coverage Singaporeans have put in place over the years, as well as the industry’s role in supporting individuals and families through significant life events and healthcare needs.”

He attributed Singapore’s ageing population and rising healthcare utilisation as contributors to the rising levels of claims.

However, he clarified that claims experience can fluctuate from quarter to quarter depending on factors such as utilisation patterns, severity of illnesses, demographic trends and the number of policies maturing within a given period.

“Based on historical trends over the past few years, claims and maturity payouts do not move in a completely uniform pattern across quarters, with some periods seeing higher payouts driven by spikes in policy maturities or healthcare-related claims activity,” Chan added.

Proactive financial planning

LIA noted that the increased claims payout coincides with more individuals and families actively strengthening their financial resilience by enhancing health coverage, addressing protection gaps, and pursuing wealth accumulation amid the unpredictable macroeconomic climate.

Wong Sze Keed, president of LIA Singapore, said: “We are also seeing an increase in proactive financial planning among individuals and families, with more people reviewing their needs and committing to longer-term solutions to better navigate an increasingly complex financial environment.”

This shift towards long-term planning is reflected in the industry’s new business premiums, with the largest share coming from annual premium policies, where customers pay premiums on a regular schedule. Annual premium policies totalled S$1.21 billion in Q1 2026, a 5.9 per cent increase from the same period last year.

At the same time, single premium policies, requiring only a one-time payment, also saw strong growth. Uptake rose by 36.5 per cent year on year, contributing S$463.3 million to total weighted new business premiums in Q1 2026, and increasing 1.2 per cent compared with the fourth quarter of 2025.

According to LIA, this early-year rise may reflect seasonal patterns, as individuals with more available funds at the start of the year take the opportunity to review their financial needs and adopt more disciplined, long-term financial planning habits.

Customers contributed the largest share of new business through banks, which generated S$593 million in total weighted business premiums in Q1 2026, accounting for 35.5 per cent of the total.

Financial adviser representatives accounted for S$576 million (34.4 per cent), and tied representatives for S$447 million (26.8 per cent).

Growing awareness

LIA also noted that about 33,000 additional residents took up IPs and/or IP riders in Q1, ahead of the regulatory changes to IP riders that were implemented on Apr 1. More than seven in 10 Singapore residents are now covered under IPs, it added.

“The strong uptake in IPs and IP riders reflects growing awareness of the role that health insurance plays in long-term financial planning,” said Wong, who also serves as chief executive officer of AIA Singapore.

New business premium for individual health policies increased by S$20.6 million in Q1 2026 compared with same quarter last year, totalling S$61.2 million in Q1 2026.

Overall, the industry recorded a year-on-year increase of about S$395 million in in-force business premiums as at end-March 2026 for IPs and IP riders, as well as other medical plans and riders – primarily non-IPs purchased by non-locals.

“We are also seeing existing policyholders review their health insurance more carefully, taking a deliberate and balanced approach to ensure that they secure the coverage they need when the unexpected happens, while being mindful of long-term sustainability,” added Wong.

LIA also highlighted that wealth accumulation remains a key priority for policyholders.

Uptake of participating policies (par policies) rose 35.6 per cent year on year to S$446 million, representing 27 per cent of total weighted new business premiums. Par policies are part of individuals’ preference to take up wealth accumulation and protection plans that allows policyholders to receive “bonuses” or “dividends” from share of investment profits made by the life insurer.

By fund classification, investment-linked policies, another popular wealth-accumulation tool in Singapore which provides the option of both insurance protection and investment returns, continued to account for the largest proportion of total weighted new business premiums.

It stood at 43 per cent totalling S$713 million in Q1 2026, marking a 7.2 per cent increase from that in the first quarter of 2025, said LIA.