Singlife has entered into a SG$550 million bilateral financing facility with MUFG Bank Ltd. to refinance subordinated debt and adjust its capital structure following its acquisition by Sumitomo Life. The transaction, announced Feb. 25, is described by the parties as one of the larger insurance financing deals in Singapore’s market. Under the facility, MUFG is Singlife’s sole capital structure adviser and sole lender, providing a Singapore dollar-denominated loan aligned to Singlife’s capital management plans.
The proceeds are designated for the redemption of SG$550 million of outstanding subordinated notes, making the refinancing a key step in the insurer’s current balance sheet strategy. The transaction follows a capital structure review undertaken after Singlife became part of Sumitomo Life’s regional operations. The review covered capital strength, balance sheet efficiency, credit rating considerations, and the availability and stability of funding in an interest rate environment that has remained volatile.
In cooperation with MUFG, Singlife considered various refinancing and capital structure approaches, including different funding instruments and structures. The company ultimately opted for a bilateral bank facility designed to support execution within a defined timeframe while maintaining alignment with the group’s profile under its Japanese parent. “For Singlife, the refinancing reflects a proactive and disciplined approach to capital management, reinforcing our emphasis on financial resilience and sustainable long-term growth. The transaction supports Singlife’s capital and funding profile in line with our ratings considerations and long-term financial strategy,” Sumit Behl, chief financial officer, Singlife, said.
For MUFG, the Singlife facility forms part of its efforts to widen its activities with insurance clients in Asia-Pacific. Within its corporate and investment banking business, the bank has identified insurance as a sector where it can provide structured financing and advisory services, using its balance sheet, structuring teams, and risk management functions. “Against evolving capital needs and a volatile rate environment, execution certainty and consistency were key in delivering a holistic solution for Singlife. By combining structuring expertise, balance sheet capacity, and disciplined risk management, MUFG worked closely with Singlife to deliver an integrated, seamless solution, aligned with their capital objectives and refinancing timeline,” Danny Fischer, managing director and head of solutions for APAC at MUFG, said. Ashurst LLP advised MUFG on legal matters related to the transaction. Allen & Gledhill advised Singlife on the redemption of the subordinated notes, underscoring the cross-border legal and regulatory considerations that often accompany regional insurance financing structures.
The refinancing takes place against a backdrop of sizeable insurance contract liabilities on Singlife’s balance sheet under IFRS 17, a development of interest to insurance professionals monitoring capital and solvency metrics. As at Dec. 31, 2024, Singlife reported S$13.6 billion of insurance contract liabilities, up from S$11.8 billion at Dec. 31, 2023, representing about 85% of total liabilities. These liabilities incorporate estimates of the present value of future policy cash flows, risk adjustments for non-financial risk, and the contractual service margin. Their measurement depends on choices of valuation methods and models, as well as data quality and key assumptions. Among the assumptions are discount rate curves, approaches to determining the risk adjustment, and the definition of coverage units used to release the contractual service margin over time.
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Economic assumptions such as projected investment returns and interest rates – along with non-economic experience assumptions including mortality, morbidity, and lapse patterns – are central to the liability estimates. The auditors have identified the valuation of insurance contract liabilities as a key audit matter, citing the sensitivity of results to these judgements and the complexity of the models and inputs involved. In this context, Singlife’s move to replace subordinated notes with a bank facility is one element of its broader approach to managing its liability profile and capital resources under Singapore’s risk-based capital framework and IFRS 17. The interaction between capital instruments, liability valuation, and rating agency assessments is a continuing focus for many regional life insurers.
Singlife’s 2024 financial statements show an expanding insurance book alongside continued group-level losses. For the year ended Dec. 31, 2024, insurance revenue was S$1.28 billion, compared with S$1.10 billion in 2023. The insurance service result before reinsurance rose from S$73.2 million to S$145 million, and, after reinsurance, the insurance service result increased from S$97.3 million to S$167.6 million. Investment-related items and insurance finance income and expenses added volatility to reported earnings. Total investment return was S$531.1 million in 2024, down from S$591 million in 2023, reflecting realised and fair value changes on investments and derivatives. Net insurance finance expenses totalled S$513 million, broadly in line with the prior year, leading to a combined net insurance and investment result of S$185.7 million, compared with S$194.7 million in 2023. After accounting for commission income and expense, other income and other operating expenses of S$224.2 million, Singlife recorded a loss before tax of S$31.6 million in 2024. Net loss for the year was S$45.7 million, slightly higher than the S$42.9 million loss reported in 2023. Total equity declined to S$789 million at Dec. 31, 2024, from S$872.1 million a year earlier, with accumulated losses of S$1.4 billion.
The Singlife-MUFG facility provides an example of how regional life insurers are using a mix of bank financing and capital markets instruments to manage capital structure and regulatory ratios. In an environment of uncertain interest rates and evolving solvency regimes, some groups are turning to bilateral or small-club bank facilities to address the refinancing of subordinated instruments and to add flexibility around redemption and maturity profiles.
Market participants are likely to monitor how Singlife integrates the new facility into its broader funding framework, alongside its management of insurance contract liabilities and interest rate risk under IFRS 17. The way the group balances bank funding, capital market issuance, and internal capital generation may offer additional points of comparison for other life insurers in Asia considering upcoming refinancing decisions.
