Singapore minister Indranee Rajah praises plans for ASEAN nat cat data and analytics platform
Indranee Rajah, Singapore’s minister in the Prime Minister’s office and second minister for finance and education, highlighted the environment and politics as two headwinds that the re/insurance industry is Asia is facing.
In her keynote speech at SIRC 2019, Rajah said Asia has been one of the regions hardest hit by climate change with more frequent, severe and widely distributed natural catastrophes and extreme weather events.
Natural catastrophe events in Asia-Pacific have increased from an annual average of 44 in the 1970s to 144 in 2018, while the related economic losses for the region in the same period have risen from an annual average of $5 billion to $89 billion.
She said: “The insurance industry is already bearing the brunt of severe natural catastrophes with increased claims. At $20.6 billion, the overall insured loss for the Asia-Pacific region in 2018 was almost 91 percent higher than the average insured loss for the previous 17 years, since the turn of the century.”
“However, insurance penetration in Asia remains stubbornly low, with insured losses for natural catastrophes accounting for only about 9 percent of Asia’s economic losses, as compared to 24 percent of global economic losses”, Rajah said.
In response to this, Singapore is working closely with the Association of Southeast Asian Nations (ASEAN) members and the insurance industry to mitigate the impact of climate risk on the region’s economic and social development.
“ASEAN member states came together in 2016 to establish the ASEAN Disaster Risk Financing and Insurance Programme (ADRFI), as the central platform coordinating efforts to develop and implement disaster risk financing strategies for the region,” she said.
“In August this year we launched ADRFI phase 2, in which the ASEAN secretariat and the Nanyang Technological University’s Institute of Catastrophe Risk Management come together to form a dual-programme office.
“Over the next three years, ADRFI will leverage the expertise of the insurance industry, academic partners, and multilateral development agencies in its risk assessment, risk advisory, and capacity building activities as part of the region’s climate and disaster resilience-building efforts.”
ADRFI has plans to establish a new ASEAN data and analytics platform to construct a high resolution and objective natural catastrophe database for ASEAN. This will empower insurers and risk modellers to tailor effective solutions to mitigate the impact of disasters in the region, Rajah said.
“ADRFI’s focus on the upstream activities in disaster risk-financing will strengthen the region’s overall disaster risk management capabilities, providing the foundation for future long-term downstream public and private disaster risk-financing solutions,” she concluded.
