Speaking at the International Insurance Society Global Insurance Forum held in Singapore this week, Tharman Shanmugaratnam, who is also deputy prime minister, said that the region presents growing opportunities for the insurance industry.
“It’s a challenging time for the insurance industry, and more broadly, for everyone involved in the business of providing assurance in retirement,” Shanmugaratnam said.
“But it’s also a time of opportunity, especially in Asia, where the opportunities for insurance are multiplying.”
Shanmugaratnam noted that challenges around low interest rates, a crowded market on tradition risks, and the influx of capital within the industry still remain “but there are still many viable options for growth, and here in emerging Asia especially, there are major new underwriting opportunities.”
Shanmugaratnam singled out three major opportunities for the insurance industry that will help shape the industry in the region over coming years.
“Asia is growing in every segment of the insurance business, but I want to highlight the importance of infrastructure financing as an opportunity for insurers, as a way in which you can play a useful role in the economic growth of the region.
“I also want to highlight the criticality of catastrophe insurance and cyber insurance.
“Public-private collaboration is the way to go in all these areas and I’m glad we are off to a good footing in our relationship with industry leaders, and in tying together collaborations with the academia and research institutions.”
On cyber insurance, Shanmugaratnam noted that the region is “the most rapidly growing digital market globally,” but this brings “increasing costs of cyber attacks.”
“This is a global problem, and we face it here in Asia,” Shanmugaratnam continued.
“The frequency, sophistication and the sheer audacity of cyber-attacks is growing. It will pose huge costs to our economies, and to corporate and personal privacy.
“The demand for protection will grow, not just the need to insure against losses but also the demand from businesses who wish to strengthen their resilience and to recover more quickly from security breaches.
“But the market needs development. It’s still in its infancy. We have to increase awareness of the importance of insurance in dealing with cyber risk.”
As natural disasters continue to have a greater impact across Asia, Shanmugaratnam said that take up of catastrophe insurance in the region has been “woefully low.”
“Part of the reason has to do with a lack of insurance awareness among businesses around the region.
“But it also has to do with data gaps - the industry needs good data on the frequency, location and economic impact of natural disasters, so that insurers and reinsurers can price risks adequately.
“So we have had a limited supply of insurance coverage, that has itself led to higher cost of protection, which in turn discourages demand for insurance against catastrophe risks.”
The International Insurance Society Global Insurance Forum has been held in Singapore for the first time and will be added to a global calendar alongside New York and London to host the event once every three years.
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