The market share of FWD and Budget Direct have grown 2,704% and 7,400% respectively – as reported by Singapore Business Review (SBR).
New entrants in Singapore’s insurance market have succeeded alongside big players as they bank on low premiums to rapidly grow their market share, according to a report from research firm ValueChampion.
For instance, FWD and Budget Direct are two companies that entered the local insurance market in 2016.
With motor premiums that are 30-40% cheaper than average, the new players were able to grow their market share in the motor insurance segment by an unprecedented 2,704% and 7,400% respectively, data from valuechampion show.
FWD and Budget Direct saw gross premium growth rates of 123% YoY each in 2018. On the other hand, the gross premiums of established players like NTUC Income and AIG Asia Pacific only increased by single digits of 1% and 9% respectively over the same period. AXA even saw gross premiums drop 5% in 2018.
In fact, SBR highlights that part of the reason why Singapore has seen a number of new entrants successfully crack the market is due to its relatively small domestic market that enables newcomers to grow. Unlike in the USA where older and larger companies dominate the local landscape through low-cost offerings and still turn a profit by spreading out fixed costs over a massive customer base.
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