Rethinking Insurance for the Masses: Embedded Insurance and Financial Security in Singapore
By Patrick Bühler
In the wake of Singapore’s Budget 2025 speech, which outlined the nation’s plan for continued growth and unity, the significance of financial security for citizens has never been more apparent. As the country celebrates 60 years of independence, the government’s initiatives aim to bolster financial resilience in an uncertain global economic climate.
Even with government measures providing relief, finances remain a primary concern for many Singaporeans. A recent AIA Singapore study revealed that only 47% of residents feel optimistic about the current economic situation, citing worries about inflation, the cost of living, job security, and income levels. However, the same study showed more than four in five residents are proactively managing their finances, with 48% identifying insurance as a crucial component of long-term financial planning. Moreover, over half of the respondents view insurance as essential for managing rising healthcare costs.
This trend underscores the critical role of insurance in mitigating financial risks and building long-term security. The Life Insurance Association of Singapore’s data supports this, revealing a 41% year-on-year surge in sales of investment-linked plans (ILPs), reaching S$2.3 billion in 2024, compared to S$1.6 billion in 2023. These plans appeal to many, as they provide life insurance coverage while offering the potential for higher returns.
Insurers are also diversifying their product offerings. Beyond traditional health, motor, and property insurance, new products such as income protection and bill protection are emerging to address the evolving needs of Singaporeans. These aim to provide protection against job loss or the inability to work and cover essential service bills during unexpected events.
To truly meet the needs of a population that embraces technology and digital innovation, the insurance industry must evolve beyond its traditional products and become an integral part of everyday life. The industry needs to make protection more widely accessible, relevant, and integrated into daily transactions.
Embedded insurance is a powerful way to achieve this transformation. According to McKinsey’s data, the non-life embedded insurance market in Asia is predicted to reach approximately $170 billion by 2030. The value of embedded insurance lies in its ability to create a broad array of products, which can be applied across many industries and use cases and integrated into existing digital experiences.
Embedded insurance offers a timely solution for digitally savvy Singaporeans in the face of increasing living costs by providing affordable and accessible protection. True relevance means covering what matters most to people: their valuable possessions, income streams, digital assets, major investments, and their health and well-being. By removing barriers like extensive planning and high upfront costs, embedded insurance seamlessly integrates coverage into daily digital transactions, such as booking event tickets, online shopping, or using e-wallets. This aligns with the government’s focus on technological innovation and financial security for all.
With just a few clicks, consumers can instantly secure coverage through digital platforms and apps, which ensures protection without added complications. This is especially beneficial for younger generations. For Gen Z and millennials who might be uninsured due to economic uncertainty and changing spending priorities, embedded insurance offers a frictionless approach that aligns with their fast-paced, tech-driven habits. Insurance that is intuitive and accessible not only provides essential protection but also serves as an early introduction to financial planning. This exposure helps young consumers build financial literacy and integrate insurance into their financial journey from an early stage.
Insurance continues to play an essential role in society, both for long-term wealth accumulation and providing crucial protection. Although the life insurance sector holds a positive outlook, there remains a significant opportunity for insurers and insurtech firms to drive innovation and reshape the industry for the masses. Embedded insurance leads this transformation, developing unique products that fit modern lifestyles, cover targeted risks, and provide affordable premiums. The ultimate goal is to create a more resilient Singapore where protection is readily available, readily consumed “on the go,” and tailored to individual needs.
