SINGAPORE — The insurance industry in Singapore remains firmly on track for growth, with providers adjusting well to upcoming regulatory requirements while the aging and wealthy population will continue to sustain a robust demand for insurance products going forward.

Dr Khoo Kah Siang, president of Singapore’s Life Insurance Association (LIA), made these comments as he shared the insurance industry’s performance in the third quarter.

Between July and September, insurers saw a 6 per cent on-year drop in total weighted premiums to S$705.4 million. Year-to-date, the figure declined by 1 per cent on-year.

“But last year was a higher base due to the increase of Medishield premiums (beginning in March), a one-off increase that led to a relative decline this year,” said Dr Khoo, who is also the chief executive of Great Eastern Singapore. “Our outlook remains great, with need for not just health insurance but also products for income protection and retirement needs. There are plenty of opportunities to grow in 2015 and beyond.”

Private insurers are facing a slew of regulatory changes that are expected to have an impact on their products, including Integrated Shield Plans (IPs) as the government looks to implement MediShield Life next year.

IPs in its current from comprises a basic MediShield Scheme and a top-up portion that provides enhanced coverage for B1 and A-class hospital wards. With the implementation of MediShield Life, premiums for the top-up portion are set to rise. The LIA announced in July the industry will hold back on increasing premiums for this segment for at least a year.

Meanwhile, an expanded MediShield scheme may also impact demand for IPs. LIA’s latest data shows new IP premiums totalled S$301 million in the first nine months last year, compared with S$176 million in the same period this year.

But the drop can also be attributed to a hike in MediShield premiums last year, Dr Khoo said, adding: “IPs will remain a relevant product … We are however working closely with the Ministry of Health to address industry concerns such as cost containment,” he said.

Private insurers are in the advanced stages of preparation for the various measures proposed by the Financial Advisory Industry Review (FAIR), a new framework aimed at raising the standards and professionalism of the financial advisory industry.

At least two of the initiatives — a direct sales channel that allow a consumer to purchase product without a financial advisor, and a web aggregator for product comparison — are on course to be delivered early next year, Dr Khoo said.

But the more stringent regulatory environment will not relegate the market’s need for financial advisors, who will remain important as they bring value-added services to the consumers, he added.