LIFE Insurance Association Singapore (LIA) on Friday (Mar 15) launched an underwriting guide for consumers, which contains general underwriting principles and practices for life and health insurance coverage.
Unveiled at the association’s annual luncheon, the guide is LIA’s attempt to make the underwriting process more transparent, relatable and comprehensible for consumers.
LIA also said it would establish an enhanced protection gap calculator in the coming weeks, in response to user feedback.
This follows insights from its 2022 Protection Gap Study, which found a 21 per cent mortality gap and a 74 per cent critical illness protection gap in Singapore.
The mortality gap narrowed 2 per cent and the critical illness protection gap narrowed 7 per cent since the last study in 2017, said Dennis Tan, president of LIA.
The protection gap is the difference between the amount of life and health insurance people carry and the amount they need.
Tan, who is also chief executive officer of Prudential Singapore, noted that the total sum assured in Singapore’s life insurance industry grew 1.9 per cent in 2023 to S$145.5 billion.
There were around 60,000 more Singaporeans and permanent residents covered by Integrated Shield Plans at the end of 2023, compared with the previous year.
“As we move into 2024, I am cautiously optimistic about the industry’s progress as we regain momentum buoyed by a more positive economic outlook for this year,” he said.
The guide includes case studies on how the underwriting process is applied across a wide range of practical examples, such as hypertension, high cholesterol, diabetes, the autism spectrum and cancer.
Meanwhile, LIA will add a simplified calculator, with an improved user-friendly interface and additional tool tips with simpler descriptions to guide more accurate inputs.
Tan expects the guide to provide greater assurance on how an insurer objectively evaluates consumers’ applications – which is based on disclosures, medical evidence and information in a fair and reasonable manner.
He expects the calculator to help consumers identify their protection gaps and drive calls to actions to be adequately protected.
The guide and calculator will be available on LIA’s website.
The association re-elected its management committee, following its annual general meeting on Friday.
This includes Tan, who was re-elected as president; as well as AIA Singapore’s CEO Wong Sze Keed and Etiqa Singapore’s CEO Raymond Ong, who were re-elected as deputy presidents.
Guesting the luncheon was Ho Hern Shin, deputy managing director of financial supervision at MAS. She noted that all applications must be objectively assessed using reliable data relevant to the risk.
No applications should be waved away or rejected solely on the basis of the declared medical condition of disability, Ho added.
She noted that the tone from the top is essential in driving the right culture.
“More than simply management, we must send a clear signal that profits cannot come before values and ethics. Compensation structures must motivate not just high performance, but also the right conduct.”
