Major foreign insurers view S'pore as launch pad to S-E Asia

Republic's proximity to untapped markets is key plank in their expansion plans

- Chor Khieng Yuit

Singapore's insurance sector is drawing foreign players seeking to grow their footprint in the Republic and in South-east Asia.

Two major billion-dollar deals have hit the headlines in the space of seven months the completed acquisition of Singapore Life (Singlife) by Japanese insurer Sumitomo Life Insurance and an offer on the table by German insurer Allianz for Income Insurance.

Mr Darren Pigg, Asia-Pacific insurance lead at financial services advisory firm Capco, said that Singapore remains the largest market in the region for new business sales.

Its insurance penetration rate of around 7.5 per cent is lower than that for Western economies like the US and the UK, where the insurance penetration rate is about 11 per cent.

"For insurers with strong ambitions in Asia, Singapore remains an important market to establish a presence in," Mr Pigg said.

The round of deal activity started in December 2023 with Sumitomo Life's bid to fully acquire all of Singlife, a home-grown financial services company.

Regulators approved the $4.6 billion deal in March 2024 and Singlife is now a wholly owned subsidiary of the Japanese insurer.

Allianz entered the fray on July 17 with its offer to take a majority 51 per cent stake in Income, another home-grown player.

The deal between Allianz and Income is pending regulatory approval and is expected to close in late 2024 or early 2025.

Income and Singlife, together with AIA, Prudential, Great Eastern and Manulife, are the six big players here, with over 85 per cent market share of the life insurance market.

Mr Pigg said Singlife and Income hold substantial market shares and "have established a strong tradition of serving the people of Singapore with trusted brands".