Singlife refines investment strategy following merger with Aviva Singapore

He added that it is difficult to participate in the green transition without being in private assets.

“The reason we’re so insistent on the green transition is that we certainly believe that for a company that insures people for the next 30 years, we also need to make sure that the community they have 30 years from now is still is livable,” he said.

He also believes that allocating funds to the green transition in both public and private markets will generate significant risk-adjusted returns. “For me, that’s really the most important thing to look at,” he said.

All of Singlife’s investments are ‘ESG measured’ as the firm measures the sustainability performance and impact of its investments. In 2022, the insurer selected European data platform Matter as its sustainability data provider to monitor key environmental risks for its investments.

The insurer is also taking a nuanced approach to ESG, preferring to look for transition opportunities rather than imposing a blanket ban on, say, fossil fuel investments.

Coal, for example, is part of the transition story. “It is unrealistic to think that you can cook, read, heat in all our neighboring countries without coal, so what we need to come up with is a plan to get out of this.” Also, there are many people employed in this industry,” he said.

“I think it’s hypocritical to say we don’t do this and we don’t do that. And maybe even your customers work in this industry, which is a great chance for them to do so. So we want to find a way to do it. We would be happy to invest in more “just transition” products, he said, referring to transition solutions that take into account social issues such as workers’ rights and workplace security.

Singlife’s pool of assets will only grow as the business rolls out new policies to attract policyholders. On April 3, the insurer launched a new cancer coverage plan that covers treatments not covered by government-backed insurance plans.

The firm also recently revised one of its flagship life insurance products to increase sum assured in tandem with rising interest rates. In March, the firm launched Singlife Flexi Life Income II, a participating whole life insurance plan that gives a guaranteed cash benefit of 2.2% of the sum assured, compared to the previous iteration’s guaranteed cash benefit of 1.2% of the sum assured.

“(Singapore) is still quite a conservative society,” said Richard Vargo, group head of products, offerings and transformation. “Many of our customers buy life insurance as long-term savings solutions for their future needs. So now with higher interest rates we can provide a higher level of guarantees in our core products and they may become attractive.”

The business is looking to improve some of its other existing products based on interest rates and the investment environment, as well as looking at how they can deliver the payout phase of the pension life cycle.

“Banks cannot provide a guaranteed monthly income and distribution… And as Singapore’s population ages, more and more people are looking for product solutions that provide both a way to decumulate funds and a level of guaranteed monthly income,” said he.

Post-merger, the insurer is also working to create cohesion across policies by developing a mobile app that allows policyholders to access their policies from a single app.

One of the challenges the insurer faced in the merger, as with most mergers, was the integration of IT systems, he said. “In our case, the two companies had a number of legacy policy systems that took time to integrate. Once completed in the coming months, we will have a single view of our policyholders and a more efficient way to serve them,” he said.

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