Singapore Insurance Penetration High but Adequacy Now Key Challenge

Global Insurance Desk: Singapore’s insurance market has reached a point where simply selling more policies is no longer the main challenge. Insurers now need to ensure the cover they provide is adequate for customers’ longer-term financial goals, according to industry leaders.

Claudia Soh, chief executive of Etiqa Insurance Singapore, said that while many Southeast Asian markets still concentrate on raising insurance penetration and closing protection gaps, the priority in Singapore has shifted. The focus is increasingly on whether policies remain relevant and sufficient as customers plan for retirement, accumulate wealth and prepare for inheritance.

Singapore’s insurance penetration stood at 7.6 percent of gross domestic product, according to the Allianz Global Insurance Report 2026. That placed the city-state fourth among selected Asian markets, behind South Korea, Taiwan and Hong Kong.

A May report from CIMB Bank’s Singapore branch found that 52.6 percent of residents viewed insurance as a tool for achieving financial independence, up from 45 percent the previous year. Customers are looking beyond basic protection against unexpected losses. They are asking how insurance can support retirement income, help build and transfer wealth, and even cover pets and personal valuables.

Soh noted that this change requires insurers to demonstrate how their products fit into different stages of a customer’s life. The biggest risk, she said, is complacency. The industry plays an important social role but cannot assume its relevance will continue without adaptation.

Artificial intelligence can help companies better understand customer needs and tailor offerings, yet human judgement and genuine relationships remain essential. Singapore’s regulatory framework for responsible use of data analytics and AI in financial services provides a useful model of collaboration between regulators and the industry.

Etiqa sees particular opportunities in pure protection, wealth accumulation and retirement solutions, though specific growth targets were not disclosed. The comments reflect a broader recognition that Singapore’s relatively mature market demands products that keep pace with rising longevity, higher living costs and changing family structures rather than simply expanding the number of policyholders.