by Ernie B. Calucag
As a major insurance centre in the region, Singapore is also an ideal place as a centre for insurance risk research in Asia Pacific.
Monetary Authority of Singapore’s assistant managing director Ng Nam Sin said that over the years, Singapore has seen some industry players and academic institutions step up to strengthen insurance research here.
Ng, who was speaking at the Insurance Risk and Research Conference, said this will help insurers understand the changing risk landscape in Asia.
He noted that Asia offers immense growth opportunities for insurers. Although gross premiums (ex-Japan) have increased by about 16 per cent per annum from 2005-2010, most people in the region remain under-insured.
According to Swiss Re, the emerging market penetration rate is about 3 per cent, compared to about 9 per cent in advanced economies.
“With a population that is rapidly growing in both size and affluence, Asia’s insurance needs will continue to increase for the foreseeable future,” he said.
And as insurers prepare to tap on growth opportunities in the region, he added that a keen understanding of risks facing Asia is of utmost importance.
In particular, the MAS official mentioned catastrophe risk – such as the Japan earthquake and the floods in Thailand.
The natural earthquake and tsunami in Japan chalked up insured losses estimated at US$35.0 billion, while the Thailand floods led to insured losses estimated at between US$15.0 to US$20.0 billion.
He added that the region also faces longevity risk brought about by an ageing population; as well as macroeconomic and systemic risks faced by companies.
“A deeper understanding of the full facet of risks faced by Asian companies, and how various risks interact, is needed. This will enable companies to better manage their risks in an integrated manner, and also help insurers to develop more relevant risk management solutions,” Ng said.
“To this end, research has an important role to play in providing thought leadership on Asian risk and risk management. Singapore, as a leading insurance centre, is well-placed to support these efforts,” he added.
Last year, the Insurance Risk and Finance Research Centre (IRFRC) – a partnership between Nanyang Business School (NBS) and global reinsurer SCOR, was set up here in Singapore. The organisation is tasked to come up with industry research to better understand insurance risks in the region.
“The IRFRC has not only contributed to insurance publications, but has also embarked on two projects – the first on longevity risks in Asia Pacific and the second on exposure growth in India and China. We believe that the Centre will produce quality research outcomes as it continues to extend its research and dialogue on risk in Asia Pacific,” he noted.