The position of home insurance in Singapore

Abstract

Home ownership in Singapore had increased significantly from the 1960's to 1990's. This was the result of increasing affluence, relaxation of rules governing the use of Central Provident Funds (CPF) for purchasing private residential properties and the accelerated building programmes ofHousing Development Board (HDB) flats in the 1980's. Despite a marked growth in home ownership for the past decades, the increase in demand for home insurance has been very gradual and very slow. There are two main objectives in this study. The first objective is to present the current situation of home insurance in Singapore in terms of the existing home insurance products, premium rating, marketing distribution, claims experience and the perceptions of the insurers. The second objective is to investigate and analyze the current demand for home insurance among the homeowners in Singapore. The demographic characteristics as well as the reasons for purchasing or not purchasing home insurance will be examined. To achieve the stated objectives, a total of twelve interviews were carried out with the executives of insurance companies. To assess the consumer demand, questionnaires were administered to a sample of 292 homeowners or adults of marriageable age. The data gathered were analyzed and collated. Views differ among the insurers regarding the outlook of home insurance market. For the consumer survey, it was found that some co-relation exists between the level of income, the type of housing property owned and the purchase of home insurance. Some limitations of this study were highlighted and recommendations were made on the marketing efforts to better penetrate the consumer market for home insurance in Singapore.