Singapore insurers adopt AI as medical inflation lifts claims pressure

MSIG says profitability now requires improving the entire value chain, not just raising premiums or tightening underwriting.

Singapore insurers are under pressure to use AI more deeply across operations as rising claims costs, medical inflation and risk complexity weigh on profitability.

Ker Ching Chock, Chief Financial Officer of MSIG Singapore, said AI can deliver its biggest impact in claims, underwriting and workforce productivity. In claims, it can help insurers review documents faster, detect possible fraud and improve settlement times. In underwriting, it can support better risk assessment by analysing larger volumes of data more efficiently.

“AI won't replace insurers,” Ker said, “but I think insurers that use AI effectively will outperform those that don't.”

The challenge is moving beyond pilots. Ker said insurers need to embed AI into daily operations so employees can spend less time on routine tasks and more time on higher-value work.

Profitability pressure is also rising across the industry. Ker said higher claims costs are being driven by medical inflation, repair costs and more complex risks. Insurers will need stronger underwriting discipline, better claims management and greater operational efficiency to respond.

“Sustainable profitability is not about charging higher premiums alone,” she said. “It is about improving performance across the entire value chain.”

That means pricing risk more accurately, reducing claims leakage through analytics and simplifying processes through automation and digitalisation. Ker said profitability is no longer only an underwriting issue, but an enterprise-wide capability.

Singapore remains a mature insurance market, but MSIG still sees growth opportunities. Ker pointed to embedded insurance, where protection is built into everyday transactions and digital ecosystems. She also cited protection gaps for small and medium-sized enterprises, especially in liability and business continuity.

Ageing will also support demand for health, wellness and protection products. For insurers, the growth test is whether they can offer simpler and more relevant products that fit into customers’ lives, whilst using AI and efficiency gains to protect margins.