- Platform Workers found to have bigger protection gaps compared to the general Economically Active population
- Life Insurance Industry commits to spearheading efforts to narrow the protection gap in Singapore
SINGAPORE – Media OutReach – 8 September 2023 – The Life Insurance Association, Singapore (LIA Singapore) today unveiled findings of the Protection Gap Study (PGS) 2022 which found that economically active1 (EA) Singaporeans and Permanent Residents in Singapore – including Platform Workers (PWs) – had a S$373 billion mortality protection gap2 and a S$579 billion critical illness (CI) protection gap3. This equates to a 21% mortality protection gap and a 74% CI protection gap in Singapore in 2022. The study comprises two components: analysis of policy data from life insurers, as well as a supplementary market survey of 775 EAs.
PGS 2022 provides insights for the industry, life insurers and reinsurers, as well as other stakeholders
– including employers and relevant government agencies – to implement actionable strategies that will support individuals to meet their protection and financial planning needs. This is especially important given the extended life expectancy4 as well as an unpredictable socio-economic landscape5 facing the community today.
LIA Singapore also included the additional analysis of protection needs and gaps of PWs6 in PGS 2022, in recognition of this being a growing segment within the community. The average PW individual has bigger mortality and CI protection gaps than the average EA individual in Singapore.
Mr. Dennis Tan, President, LIA Singapore said, “The Protection Gap Study 2022 shows that while mortality and critical illness protection gaps persist, there has been progress recorded since our last study in 2017. There is greater awareness and appreciation of the value of insurance in Singapore, and more individuals are taking actions to better meet their protection needs.
1 Individuals employed and contributing to the production and distribution of goods and services. Platform workers fall within this category and are a subset of the economically active group.
2 The mortality protection gap represents the financial gap to cover needs of dependents over a defined period in the event of death. It is the amount of money required by dependents to cover expenses, clear outstanding debt, and maintain a reasonable lifestyle, less existing savings and insurance coverage for mortality, following the death of a member of the household.
3 The CI protection gap represents the financial gap to cover family needs during the assumed CI recovery period of 5 years, until the insured is able to return to work. It is the amount of money required to cover expenses and outstanding debt payments during the insured’s CI recovery period, less existing insurance coverage for CI. It is to be noted that identified needs of dependents beyond the CI recovery period have been considered on the hypothesis that the insured may not be able to meet those needs when they do return to work (due to the assumed reduction in the insured’s earning capacity).
4 ‘Life Expectancy Improved Over the Last Decade but Saw Declines Over Recent Years Due to the COVID-19 Pandemic’ (May 22, 2023) SingStat Singapore. Available at https://www.singstat.gov.sg/-/media/files/news/press22052023.ashx
5 ‘MTI Narrows Singapore’s GDP Growth Forecast for 2023 to “0.5 to 1.5 Per Cent”‘ (August 11, 2023) Ministry of Trade and Industry Singapore. Available at: https://www.mti.gov.sg/Newsroom/Press-Releases/2023/08/MTI-Narrows-Singapore-GDP-Growth-Forecast-for– 2023-to-0_5-to-1_5-Per-Cent
6 ‘Platform Workers’ in this study refer to a group of individuals consisting of ‘Private-hire Workers’, ‘Taxi Drivers’ and ‘Delivery Workers’.
While this progress is encouraging, we know more can and must be done to support different members of our community, such as our Platform Workers. The life insurance industry will continue leading the charge on these efforts, leveraging insights from the study to inform initiatives for the Association, our member companies, and other relevant stakeholders to pursue and to get more individuals better insured.”
Some areas the industry will explore developing initiatives for include:
- Enhancing the understanding and reach of insurance policies through product innovations and further simplification of policy-related materials
- Adopting a customer profile and needs-based understanding approach to develop tailored customer segment-led propositions, product solutions and distribution approaches aimed at supporting specific groups with medium to high protection gaps (e.g. underserved segments such as those that are less educated, and/or those of lower income)
- Boosting consumer awareness and understanding about protection through public education initiatives
- Making it easier for underserved members of the public (e.g. Platform Workers) to reach accessible touchpoints to better understand and address their protection and financial planning needs
Mortality protection gap remained relatively unchanged for EA individuals despite an increase in mortality protection needs