SINGAPORE: Motorists in Singapore are set to pay higher
insurance premiums soon, with insurers suffering record losses in
2008.
Numbers from the General Insurance Association showed that the
motor sector booked record losses of S$214 million last year. That
brought down overall underwriting profits for the insurance
industry by more than half to just S$50.8 million.
The association said inflated claims blew up record losses for
motor insurers.
Insurers paid out S$742 million in claims in 2008 compared
to S$582 million in 2007 as there was an increase in younger
drivers getting into accidents with personal
injuries.
But the association added that losses went down by about 10 per
cent in the last two quarters of 2008 after it implemented the
Motor Claims Framework in June to help reduce disputed
claims.
Pui Phusangmook, Senior VP, General Insurance Division, NTUC
Income, said: "We're trying to control the claims on our side. We
try to settle directly with our customers or claimants without
using lawyers. So by doing that, we'll save legal fees and that can
be passed on as a savings as well."
Still, premiums are expected to rise. The average premium for motor
insurance in 2008 was about S$1,000, a 15 per cent increase
year-on-year and the highest average in the last five years.
Insurance companies said that amount is expected to go up by about
10 to 20 per cent in 2009 in light of the losses they incurred in
2008.
Overall, the industry's gross premium income rose by 16 per cent to
S$2.88 billion.
Health insurance gained over 250 per cent in profits, while gross
premiums for personal accident insurance went up by 11 per
cent.
Mr Pui continued: "Last year, NTUC Income had a healthy growth of
15 per cent for this class of business (Personal Accident and
Travel), and for this year, we want to expand our distribution
channels. We want to work more with banks, credit card companies
and affinity groups.
"Some of the travel products don't cover catastrophes. So we'll be
revamping our products to cover certain benefits and increase some
benefits as well."
Derek Teo, president, General Insurance Association, said: "The
personal accident, travel and health insurance sectors have shown
very prominent growth trends and are likely to continue into
2009.
"As for the commercial business, I think cargo is one class that
could be severely impacted because of worldwide economic downtrend
- less exports moving off from country to country."
Profits for cargo insurance went down by about 10 per cent in 2008.
- CNA/vm