Aviva Singlife Merger: Here’s Everything Policyholders Need to Know

If you own any Aviva or Singlife insurance, you would have been notified of the upcoming Aviva-Singlife merger and started wondering what that means for you and your policy.

Rest easy, though. For now, there is no need to take any action as the merger has not actually gone through yet.

The proposed Aviva Singlife merger will only happen in 2021 as it is currently under regulatory review. The review is expected to be done by January, and the actual merger should happen in the first half of 2021. The new entity will be named Aviva Singlife.

Head over here to read the official statements from Aviva and Singlife.

Who are Aviva and Singlife? Why are they merging?

The Aviva Singlife merger has taken us by surprise, partly because they are two very different companies. 

Aviva Singapore is the local arm of British life insurer, Aviva. Most Singaporeans would be familiar with this brand as they’ve been around for quite some time here. Aviva is also known for providing life insurance cover during National Service, and for its affordable group term life insurance for NSmen and those in the public service.

Meanwhile, Singlife is a locally-based insurance startup that’s only been operating for three years. Singlife is known for the Singlife Account, an insurance savings plan that’s targeted at the young and digitally-savvy, although it also offers term life insurance plans.

By joining forces, the companies hope to become a “home-grown regional brand” that will offer “innovative financial products with intuitive technology and independent advice,” said Singlife chairman Ray Ferguson in an article by The Straits Times.

Beyond this press statement, we do not know what else specifically is on the cards for Aviva Singlife.

What happens to existing Aviva insurance policies e.g. group term life for NSmen?

If you are an existing Aviva (or Singlife) policyholder, nothing will happen to your insurance policy. There are no changes to the terms, premiums and fees.

As the Aviva Singlife merger is still pending approval and will only happen in 1H 2021, Aviva Singapore and Singlife will continue to operate independently until then. Both Aviva and Singlife customer service teams remain unchanged for the time being. 

If you are an Aviva insurance policyholder, your existing policies will continue to be upheld and serviced by Aviva Singapore until the merger is completed. 

From Aviva’s official email to all customers:

  • There will be no changes as a result of this announcement to the terms, premiums and fees of policies you hold with Aviva Ltd, and investment accounts you have with Navigator or dollarDEX
  • Our customer service is unchanged, and you will continue to communicate with the same experienced team
  • We will continue to operate under the same brand until further notice

Will there be changes to the Singlife Account or other Singlife policies?

Likewise, there will be no change to the Singlife Account or insurance policies. From the official Singlife email:

  • There will be no changes as a result of this announcement to the terms, premiums and fees of policies you hold with Singlife, including the Singlife Account.
  • Our customer service is unchanged, and you will continue to communicate with the same experienced team via call, email, WhatsApp, or through your financial advisor. 

What happens after the Aviva Singlife merger?

If the merger does happen in 2021, Aviva or Singlife customers can expect the new entity, Aviva Singlife, to manage their existing policies. You will not need to take any action.

According to Singlife’s FAQs, you will NOT receive a new insurance policy contract. Instead, after the merger, you will receive a policy endorsement.

This endorsement will confirm that your original insurance policy has been transferred to the new entity and that all terms and conditions remain the same. It will also state that the new entity will be responsible for your policy.

Any standing premium payment instructions will be redirected automatically, and all claims/transactions will continue to be processed as per normal.

Should you wait until 2021 to buy an Aviva or Singlife insurance policy?

No, you do not need to wait until 2021 to start buying an Aviva or Singlife insurance plan. You can (and should!) purchase insurance policies based on your personal insurance needs, based on products that are now available.

All insurance policies are contractual obligations, and will be honoured even after the entity has changed ownership. They will also continue to be protected by the SDIC’s Policy Owners’ Protection Scheme.

So, should you choose to buy a policy from Aviva Singapore or Singlife before the merger, your policy terms will be honoured by the respective insurer. And should the merger go through, it will continue to be honoured by Aviva Singlife.

Will Aviva Singlife be covered by the SDIC’s Policy Owners’ Protection Scheme?

Yes. According to Singlife’s FAQs, the new entity Aviva Singlife will be covered under the SDIC’s Policy Owners’ Protection Scheme.

This scheme protects insurance policyholders in the unlikely event of the insurer defaulting. (It’s basically insurance for your insurance policy.) You are protected up to S$500,000 for total sum assured and S$100,000 for total surrender value per insurer.

One thing to note though. After Aviva and Singlife merge into one company, they will be counted as one insurer by SDIC. 

If you have a S$500,000 Aviva life insurance policy and another S$500,000 Singlife life insurance policy, you are currently fully protected by the SDIC scheme.

But, after the merger, you will have S$1,000,000 in total coverage from Aviva Singlife. That exceeds the Policy Owners’ Protection Scheme’s limits per insurer.

Will the merger affect Aviva Singlife’s credit rating?

If you are a savvy insurance shopper, you might already be aware of insurance company credit ratings. 

Credit ratings are opinions of third-party agencies on the financial health of an insurer, and therefore, the likelihood of them paying out their policyholders’ claims. 

Ratings are worth considering because insurance policies tend to be long-term commitments, but they are ultimately just opinions. No one can predict the future with absolute certainty.

In 2019, Aviva was rated A while Singlife was rated BBB by S&P Global Ratings. You can see the news updates on Aviva PLC (parent company of Aviva Singapore) and Singapore Life Pte. Ltd. here.

Note that BBB is considered low compared to other insurance companies in Singapore; most insurers get a rating of A or AA from S&P. 

That said, BBB is a credible rating for a new company. The S&P Global Ratings report also suggested that to improve its rating, Singlife needs to grow as a brand (which the proposed merger might actually achieve).

Should the Aviva Singlife merger be approved and completed, we can expect another update from S&P Global Ratings on the new entity.

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