Tourists take pictures of the Central Business District in Singapore, Thursday, May 30, 2024. (AP Photo/Vincent Thian)
SINGAPORE: Life insurers here are more actively covering niche conditions such as mental illnesses and dementia as well as emerging trends to cater to under-represented customer segments, as they find ways to stay relevant.
They told The Straits Times that as consumer awareness and demand increase, insurers would offer more types of plans, including those that are niche.
Industry players typically gravitate towards risks that are more common, as insurance works on the principle of risk-pooling.
For instance, the costs of covering the less healthy are offset by the relatively lower costs of insuring those who are fit.
In recent years, insurers have been more active in exploring new areas they can cover.
In mid-May, Singlife, which is a fully owned subsidiary of Japanese life insurer Sumitomo Life, launched a plan that covers dementia care.
Coverage of dementia is not entirely new, but a standalone long-term plan called Singlife Dementia Cover is the first in the market to provide yearly payouts for dementia and mental health conditions such as major depressive disorder, schizophrenia and bipolar disorder.
Helen Shen, Singlife’s group head of health, said there is a need to make the public more aware of dementia as the population ages.
Dementia is the fifth leading cause of disability in Singapore.
“We do not just come up with products which cater to the masses or will have a huge take-up rate; we must also come out with products to close the protection gap of Singaporeans,” Shen said.
Newer plans are also structured in a more flexible and bite-size manner.
Income Insurance, which is linked to the National Trades Union Congress, launched the industry’s first stand-alone mental wellness insurance plan called the Snack self-care pack in late 2023.
The plan is based on a monthly subscription of S$9.90, where subscribers can receive coverage of up to S$200 a month for psychiatric consultations and S$500 a month for psychotherapy sessions.
Income Insurance’s chief customer officer Dhiren Amin said mental health is a national concern, so it makes business sense to develop such products.
Daniel Lum, chief product officer at HSBC Life Singapore, said the insurer first offered benefits linked to the diagnosis of ageing-related conditions and chronic diseases such as Parkinson’s, Alzheimer’s and dementia in 2019, under its retirement planning product.
“Such illnesses and conditions are on the rise, so this benefit helps to provide financial support to fund their long-term care,” he said.
However, industry observers told The Straits Times that in general, the take-up rate of niche coverage is low.
Irma Hadikusuma, chief marketing officer at AIA Singapore, said the low take-up of niche products is due to the lack of awareness and perceived need among policyholders.
She said many customers do not view such insurance coverage as a necessity, as they believe their existing policies are sufficient to cover their common risks.
“Even though the take-up is currently low, we expect it to grow with time as it becomes more widely discussed in the public domain,” said Hadikusuma.
Outside of health conditions, there are insurers who offer plans that cover emerging trends.
Great Eastern’s managing director of group insurance Jimmy Tong said the insurer started offering coverage for electric vehicles in 2023.
“As with all new protection products, demand starts at a reasonable level and ramps up over time,” he said, adding that risk-pooling among niche products is possible as long as the risk calculation is properly done.
As Singapore’s population ages rapidly, with an estimated one in four projected to be over the age of 65 by 2030, and as lifestyles change, the insurance industry is expected to become more varied and, some observers hope, more inclusive.
Manulife Singapore’s chief product officer Thomas Lee said that the firm anticipates a continuing trend towards more diversified insurance offerings that would allow for more personalised and precise coverage, while Prudential Singapore’s head of product management Jason Lim said the market would likely turn more fragmented as insurers focus on areas that are currently underserved. — The Straits Times/ANN
