2017 "a good year" for insurance as premiums kept low

The general insurance rate in 2017 moved between 7.5-12.5%.

The general insurance rate in 2017 moved between 7.5-12.5% and is expected to move between 5-10% in 2018, insurance firm Aon International said.

According to its market review, 2017 was another good year for buyers of insurance in Singapore.

Insurance rate for health and benefits also moved between 5-12% in 2017 and is expected to move at the same rate in 2018.

Despite the unusually high level of attritional marine cargo losses and a number of major fires in the west of the island, rate reductions remained on offer throughout the year.

As the softening trend of previous years continued to play out in 2017, a number of Singapore-based markets looked to guarantee premium income by putting their capacity behind structured portfolio solutions or facilities, which are largely still profitable.

"In addition, we also saw some insurers relax their underwriting criteria and increase their appetite for risks that they had not typically written in the past," Aon said.

Over the past 12 months, the review also found that there was an increase in the number of blended products offered by Singapore-based insurers. New offerings emerged that combine traditional insurance coverage for physical damage and loss of revenue with a crisis consultancy offering, designed to provide reputational protection to the insured when there is a major loss event.

"These offerings not only reflect a maturation in underwriting models in the Singapore market, but also an increase in client demand for value-added services and products which go beyond the scope of traditional insurer offerings," the firm added.

Heading into 2018, Singapore-based clients are seen to continue seeking rate reductions they enjoyed in recent years.

"Whilst cost remains a key focus in the prevailing, challenging macroeconomic conditions, as risk maturity continues to increase, so too will the demand for value-added services from insurers and brokers," Aon said.

Here's more from Aon International:

Looking ahead to the next 12 months, some underwriters from international insurers will be under pressure from their head office not to provide further rate reductions in 2018, but overall, we expect to see reductions available for well-managed risks, albeit of a smaller order than in 2017.

As clients continue to push for further premium reductions, we expect to see an increase in the number of hybrid products offered, with multiple liability covers offered within one policy, giving insurers and clients the benefits of efficiency which is generated when combining multiple covers under one umbrella.

The H&B market is likely to once again be affected by medical inflation, with another year of increasing costs for employers. In Singapore and across the region, the rate of medical inflation continues to out-strip the pace of general inflation.