New IP riders attract heightened interest but sales remain muted for some insurers
New optional private health insurance riders in Singapore have generated interest but only three out of seven insurers reported strong sales since their April launch. The new riders exclude coverage for minimum deductibles and have lower premiums, aiming to encourage more…
Intelligence analysis by Llama
Despite heightened interest, the new optional private health insurance products launched since April have yet to see widespread uptake. Five of the seven Integrated Shield Plan (IP) insurers told The Straits Times they have seen increased interest in or received more queries about the new IP riders, but only three reported strong or healthy uptake.
New health insurance riders in Singapore have been launched to encourage people to spend less on healthcare. However, many people are still not aware of the changes or are hesitant to switch to the new riders because they don't fully understand what it means or are worried about the cost.
Analysis
Market Response to New Riders
The new optional private health insurance riders launched since April have generated interest, but only three out of seven insurers reported strong sales. The new riders exclude coverage for minimum deductibles and have lower premiums, aiming to encourage more disciplined healthcare spending.
The bulk of new rider buyers are likely new customers, with existing policyholders slower to switch due to understanding gaps and cost-benefit considerations. This is not surprising, as the changes may have taken time for policyholders to understand and adjust to.
Insurer Response
Three of the seven IP insurers said they had seen a favourable market response to the new riders. Prudential Singapore’s chief health officer, Sidharth Kachroo, said there was a month-on-month increase in the number of its new IP riders sold from April to June, driven by “growing awareness of health and protection needs, as customers consider rising costs for hospitalisation, recovery and care needs”.
AIA Singapore said it had seen “strong uptake” and that “customer interest and demand for the new IP riders remain strong”. Great Eastern received a heightened level of queries and said it “continues to see healthy take-up rates in its riders among those purchasing private and restructured IPs”. However, as the company had introduced riders that do not cover the deductibles in 2024, there was a “stable, smooth trend” in the uptake of the new riders launched in April, rather than a spike.
Analysts’ Views
Eddy Cheong, chief executive of insurance advisory company Havend, said it was likely that a significant portion of policyholders were still not aware of the changes, and those who had switched could be the more attentive ones. In addition, there could be friction in switching if policyholders do not fully understand what the move would mean or receive the necessary guidance, so they would rather stay with their existing plans, said Cheong.
Conclusion
The new riders aim to encourage more disciplined healthcare spending, but their slow uptake may indicate that policyholders are still not aware of the changes or are hesitant to switch due to understanding gaps and cost-benefit considerations. It is too early to determine if the initial interest will lead to higher sales in future, as the market could be going through a transition period as consumers sought to better understand the new products.
Key points
- New optional private health insurance riders in Singapore have generated interest but only three out of seven insurers reported strong sales since their April launch.
- The new riders exclude coverage for minimum deductibles and have lower premiums, aiming to encourage more disciplined healthcare spending.
- The bulk of new rider buyers are likely new customers, with existing policyholders slower to switch due to understanding gaps and cost-benefit considerations.
- Three of the seven IP insurers said they had seen a favourable market response to the new riders.
- Eddy Cheong, chief executive of insurance advisory company Havend, said it was likely that a significant portion of policyholders were still not aware of the changes, and those who had switched could be the more attentive ones.
If the new riders continue to gain traction, it could lead to more disciplined healthcare spending and lower premiums in the long run. This could also encourage more people to switch to the new riders, leading to a more competitive market.
The slow uptake of the new riders may indicate that policyholders are still not aware of the changes or are hesitant to switch due to understanding gaps and cost-benefit considerations. This could lead to a prolonged transition period, during which the market may not see the expected benefits of the new riders.
