Singapore's Critical Illness Protection Gap Narrows While Mortality Protection Gap Remains Relatively Unchanged: Protection Gap Study 2022

• Platform Workers found to have bigger protection gaps compared to the general Economically Activepopulation
• LifeInsuranceIndustrycommitstospearheadingeffortstonarrowtheprotectiongapinSingapore

SINGAPORE - Media OutReach - 8 September 2023 - The Life Insurance Association, Singapore (LIA Singapore) todayunveiled 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 aS$373 billion mortality protection gap²and a S$579 billion critical illness (CI) protection gap³. Thisequatestoa21%mortalityprotectiongapanda74%CIprotectiongapinSingaporein2022.Thestudycomprises two components: analysis of policy data from life insurers, as well as a supplementarymarket surveyof 775EAs. PGS2022providesinsightsfortheindustry,lifeinsurersandreinsurers,aswellasotherstakeholders -includingemployersandrelevantgovernmentagencies-toimplementactionablestrategiesthatwillsupportindividualstomeettheirprotectionandfinancialplanningneeds.Thisisespeciallyimportantgiventheextendedlifeexpectancy⁴aswellasanunpredictablesocio-economiclandscape⁵facingthecommunity today. LIASingaporealsoincludedtheadditionalanalysisofprotectionneedsandgapsofPWs⁶inPGS2022,in recognition of this being a growing segment within the community. The average PW individual hasbiggermortality andCIprotectiongaps thantheaverage EAindividual inSingapore. Mr. Dennis Tan, President, LIA Singapore said, "The Protection Gap Study 2022 shows that whilemortality and critical illness protection gaps persist, there has been progress recorded since our laststudyin2017.ThereisgreaterawarenessandappreciationofthevalueofinsuranceinSingapore,andmore individualsaretakingactions tobettermeettheir protectionneeds. ¹ Individuals employed and contributing to the production and distribution of goods and services. Platform workers fall within this categoryandareasubsetoftheeconomicallyactivegroup.²Themortalityprotectiongaprepresentsthefinancialgaptocoverneedsofdependentsoveradefinedperiodintheeventofdeath.Itistheamountofmoneyrequiredbydependentstocoverexpenses,clearoutstandingdebt,andmaintainareasonablelifestyle,lessexistingsavingsandinsurance coverage formortality,followingthedeathofamemberofthehousehold.³TheCIprotectiongaprepresentsthefinancialgaptocoverfamilyneedsduringtheassumedCIrecoveryperiodof5years,untiltheinsuredis able to return to work. It is the amount of money required to cover expenses and outstanding debt payments during the insured's CIrecovery period, less existing insurance coverage for CI. It is to be noted that identified needs of dependents beyond the CI recovery periodhave been considered on the hypothesis that the insured may not be able to meet those needs when they do return to work (due to theassumedreductionintheinsured's earningcapacity).⁴ 'Life Expectancy Improved Over the Last Decade but Saw Declines Over Recent Years Due to the COVID-19 Pandemic' (May 22, 2023)SingStatSingapore. Availableathttps://www.singstat.gov.sg/-/media/files/news/press22052023.ashx⁵ 'MTI Narrows Singapore's GDP Growth Forecast for 2023 to "0.5 to 1.5 Per Cent"' (August 11, 2023) Ministry of Trade and IndustrySingapore. 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-Cent⁶'PlatformWorkers'inthisstudyrefertoagroupofindividualsconsistingof'Private-hireWorkers','TaxiDrivers'and'DeliveryWorkers'. While this progress is encouraging, we know more can and must be done to support differentmembers of our community, such as our Platform Workers. The life insurance industry will continueleading the charge on these efforts, leveraging insights from the study to inform initiatives for theAssociation, our member companies, and other relevant stakeholders to pursue and to get moreindividuals better insured." Someareastheindustrywillexploredevelopinginitiativesforinclude:

• Enhancing the understanding and reach of insurance policies through product innovations andfurthersimplification ofpolicy-relatedmaterials

• Adoptingacustomerprofileandneeds-basedunderstandingapproachtodeveloptailoredcustomer segment-led propositions, product solutions and distribution approaches aimed atsupportingspecificgroupswithmediumtohighprotectiongaps(e.g.underservedsegmentssuchasthosethatarelesseducated,and/orthoseof lower income)

• Boosting consumer awareness and understanding about protection through public educationinitiatives

• Makingiteasierforunderservedmembersofthepublic(e.g.PlatformWorkers)toreachaccessible touchpoints to better understand and address their protection and financial planningneeds

Mortality protection gap remained relatively unchanged for EA individuals despite an increase inmortalityprotectionneeds
EA individuals in Singapore have approximately 79% of their mortality protection needs met. Thoughthe mortality protection needs increased between 2017 and 2022 – primarily due to an overallincrease in costs of living and number of EA individuals – the mortality protection gap remainedrelativelyunchangedfrom2017,withaslight2% decreasefrom23%to21%. Thisislargelyduetoincomelevelsgoingup,increaseinCentralProvidentFund(CPF)andothersavingsby 47%,aswell asan11%uplift inlifeinsurancecoverage. The average mortality coverage per policyholder increased by approximately S$41,100 to S$331,200in 2022 which is approximately 3.6 times of average annual income. Policyholders in Singapore haveanaverageof threepoliciesformortalityprotection. CIprotectiongap forEA individualsnarrowedprimarilydueto anincreaseinCIcoverage The CI protection gap amongst EA individuals has narrowed by a notable 7% - down to 74% in 2022from 81% in 2017. The average CI coverage per policyholder increased by approximately S$64,400 toS$193,300 in2022.This is approximately 2.1timesof averageannualincome. This reduction in CI protection gap from 2017 was mainly driven by an approximate 63% increase inCIcoveragesincethen. Onaverage,aCIpolicyholderownslessthanonestandalonepolicy.TheirCIcoverageisgenerallyfromWhole-of-Life policiesor riderswithCItosupplementtheirmainlifeinsurance policies. BiggermortalityandCIprotectiongapamongstPlatformWorkersbecauseoflowersavingsandinsurancecoverage PGS2022foundthatthereisa59%mortalityprotectiongapanda91%CIprotectiongapamongPWs.This is primarily attributed to them having lower CPF and deposit savings, as well as lower insurancecoverageas compared toEA individuals. Takeawaysfromthesupplementarymarketsurveyinclude:

• Many PW respondents indicating they are not covered under Group insurance offered byplatform providers, with a further portion being unaware if they are receiving any GroupInsurance coverage.

• PW respondents expressed interest for the life insurance industry to establish accessibletouchpoints that they may visit to seek guidance and support for their financial planningjourneyandinsuranceprotectionneeds.Theindustryrecognisesthatthesetouchpointscouldinclude roadshowsattheofficesof platformproviders.

Comparisonbetween2017PGSand 2022PGS Resourcesavailableincludetheaggregateofavailablesavings(i.e.CPFsavings,othersavingssuchascashanddeposits)andexisting insurancecoverageNotetoeditor:Thefullreport isavailableatwww.lia.org.sgHashtag: #LIASingapore

The issuer is solely responsible for the content of this announcement.

About the Protection Gap Study 2022

The Protection Gap Study (PGS) 2022 commissioned by LIA Singapore was conducted independentlyby Ernst & Young Advisory Pte Ltd. The study drew upon insurance data available until 31 December2021 from insurers, coupled with public data analysis of economically active individuals in Singaporebetweentheagesof20to69whohaveatleastonedependent. KeychangesfromthepreviousstudyaretheinclusionofaninauguralprotectiongapstudyforthePWpopulation,alongwithasupplementarymarketsurveytogaindeeperinsightsintotheprotectiongap,therebyenablingacomprehensivereassessmentoftheassumptionsthatunderpinthe study. Please be advised of key limitations arising from the assumptions and data sources used in thecalculationofthemortalityandCIprotectiongapsastheseresultsreflecttheaverageacrossSingapore, whereas each individual's circumstances will be different and specific to the individual. Assuch,individual protectionneeds shouldbeanalysedseparately. Another limitation of the study is that a significant portion of PWs sampled falls within the older agegroup. Nonetheless, the higher mortality protection gap and CI protection gap in comparison to EAsoffer a valuable additional insight. This emphasises the importance of addressing the protection gapsamongseniors, especially inlight of Singapore'sgrowingaging population.

LifeInsuranceAssociation,Singapore(LIASingapore)

Established in 1962, the Life Insurance Association, Singapore (LIA Singapore) is the not-for-profittrade body of life insurance product providers and life reinsurance providers based in Singapore andlicensedbytheMonetaryAuthorityofSingapore(MAS).

VisionandMission

Thevisionofmembercompaniesistoprovideindividualswithpeaceofmindandtopromoteasocietywhereevery personispreparedforlife'schangingcyclesandforthosesituationsunforeseen. They are committed to being a progressive life insurance industry by collectively enhancing consumerunderstanding, promoting industry best practices, and through the association fostering a spirit ofcollaborationandmutual respectwithgovernmentandbusinessleaders.

Valuesunderpinningtheassociationanditsmembers

Unifiedinourresolvetodeliverinnovativesolutionswhereeveryindividual'sneedsarebestmet. Professionalinthe wayweconductourselvesandinthe counselwe give. Ethicalinensuringourpolicyholders'interestsaremanagedwithutmostintegrity. Fairinhowwestrivetoprovidefavourableoutcomestobothourpolicyholdersandshareholders. Open&honestinallthatwe doto buildanenvironmentoftrustandtransparency.
Proactiveinthestepswetaketogiveourpeopletheskillsandknowledgetoprovidesoundsolutionsatall times.