[SINGAPORE] Motor insurance premiums in Singapore are climbing fast, and it’s not just because of inflation. As claims soar and repair costs rise—especially for electric vehicles—insurers are recalibrating how they price risk. For consumers, this means navigating an increasingly expensive and competitive marketplace where loyalty rarely pays off.
Key Takeaways
- Motor insurance premiums climbed 9.4% year-on-year in Q1 2025—a solid headline figure on the surface. But dig a little deeper, and the cracks begin to show. Underwriting losses expanded by 14%, reaching $13.3 million, a reminder that revenue growth isn’t much comfort when profitability is slipping in the other direction.
- The full-year picture looks even more stark. Underwriting losses in 2024 ballooned to $33.8 million—quadruple the prior year’s figure. This isn’t just margin pressure; it’s a signal that core pricing models may be misfiring.
- A perfect storm of claims inflation is pushing costs higher. More frequent accidents, pricier repairs, and the growing share of electric vehicles—often more complex and expensive to service—are all weighing heavily on insurer balance sheets.
- Not all players fared equally. Income maintained its lead, Liberty staged a recovery with stronger underwriting results, but Allianz stumbled, posting a sharp decline in premium volumes. The divergence hints at strategic gaps in pricing discipline and risk appetite.
Loyalty, it seems, has its limits. Faced with steeper premiums, more consumers are switching providers, prioritising price over brand. For insurers, retention can no longer be taken for granted—it must be earned every renewal cycle.
Comparative Insight
Motor insurance inflation isn’t a Singapore-specific phenomenon—it’s part of a wider reckoning unfolding across advanced markets. From London to Los Angeles, insurers are facing a perfect storm: climate-fueled catastrophe losses, pricier replacement parts, and a shrinking pool of skilled labor in auto repair. In the UK, premiums jumped more than 40% year-on-year in 2023. In the US, carriers have responded by tightening underwriting standards after enduring wave after wave of red ink. Singapore isn’t immune—and its accelerated pivot to electric vehicles, aligned with global decarbonisation goals, brings added friction. EV repairs often demand specialised tools, training, and components—sending costs soaring even for seemingly minor incidents.
Insurers now find themselves squeezed between rising policyholder expectations and ballooning cost structures. Some, like AIG and Liberty, have leaned into strategic repricing to defend profitability. But the broader challenge remains: those slow to adapt—whether in pricing sophistication or back-end efficiency—risk bleeding market share in an increasingly unforgiving landscape.
What’s Next
In the near term, premiums are poised to keep climbing as insurers adjust pricing to reflect rising claims and repair costs. For policyholders, that likely means steeper renewal quotes—and stronger motivation to shop around or switch providers. Price sensitivity is intensifying, and so is the willingness to abandon long-held brand loyalty.
Looking further ahead, insurers may begin shifting toward more personalised, usage-based models—think telematics and pay-as-you-drive plans. Tailored EV policies, designed around distinct repair and battery risks, could also emerge. Some may go a step further, forming tighter partnerships with automakers to streamline repair costs and gain greater control over claims outcomes.
Regulators, too, may soon feel the pressure. As rate hikes ripple through households, calls for greater transparency in how premiums are set could grow louder. The General Insurance Association (GIA) may be pushed to take a more active role—not just in guiding best practices, but in ensuring consumers are shielded from opaque pricing or inconsistent claims service.
What It Means
Viewed through a consumer behavior lens, the pattern is hard to ignore: price sensitivity is climbing, brand loyalty is slipping, and digital comparison platforms are becoming the first stop—not the last—in the insurance buying journey. As premiums creep higher, so does the opening for challengers: fintech-native insurers, bundled EV coverage, and aggregator platforms all sense an opportunity to break through. For legacy players, inertia is no longer a viable strategy. The pressure is on to retain customers not just through price, but through relevance—smarter coverage, faster claims, better digital touchpoints. Ultimately, winning the car owner’s wallet may come down to perceived value and timing—not just the name on the policy.
WhatsApp
Instagram
Threads
