Heng Swee Keat, deputy prime minister of Singapore
Asian reinsurers, regulators and academics have joined forces to form the Global Asia Insurance Partnership (GAIP) to develop new risk management products and serve as a policy think-tank.
The initiative was unveiled by Heng Swee Keat, the deputy prime minister of Singapore, who gave a keynote speech yesterday (Monday, November 2) at the SIRC 2020 Re-Mind virtual conference, taking place this week in place of the physical 17th Singapore International Reinsurance Conference, which has been rescheduled to November 2021.
Heng said GAIP will officially start work in January 2021, proposing measures that can help expand coverage in the region.
As well as lobbying for market-friendly policies and developing new products, GAIP will look to improve the development of local talent in the industry, he said, promoting skills that will be useful in the industry, such as expertise in big data and artificial intelligence (AI).
Reinsurers such as Singapore Life have already digitised their underwriting and claims-handling processes so they can all be done online, but there is potential for institutions to go even further, said Heng, with big data and AI presenting significant opportunities to improve risk modelling.
Meanwhile, the pandemic has also illustrated the need for more private-public partnerships (PPPs) to finance large systemic risks, he added. GAIP will focus in particular on how PPPs can be developed to help tackle Asia’s challenges around pandemic coverage and climate change.
He warned that the cost of rebuilding the global economy following the pandemic will add to public debt, adding: “we must all take risk management more seriously”.
The COVID-19 pandemic has revealed how much work societies have to do to understand the scale, complexity and inter-connectedness of risk, Heng noted. While economic growth has lifted a lot of Asians out of poverty in recent years, the region has a significant protection gap: since 1990 half of all the losses associated with natural disasters have been experienced in Asia, but only 9 percent of Asia’s losses in 2019 were insured, compared to 24 percent globally, Heng said.
Asia’s high protection gap is due to a lack of quality data and robust risk models, he added.
“We must all take risk management more seriously.” Heng Swee Keat, deputy prime minister of Singapore
Meanwhile, Marc Haushofer, chairman of the Singapore Reinsurers’ Association (SRA), admitted in his opening remarks that SRA had had reservations about holding its flagship event virtually. Some of SRA’s organising committee were concerned that video conference fatigue may have taken its toll and reduced appetite for an event that was not being held in person, Haushofer explained.
Ultimately SIRC 2020 did go ahead with a virtual programme, SIRC 2020 Re-Mind, attracting around 1,000 registrations by the opening day, from around 40 countries. The digital conference has shown the way forward for the industry and will influence future events, even when physical meetings are again possible, said Haushofer.
The virtual format attracted delegates who would not have attended the conference in person, he said, including some from Angola and Zimbabwe for the first time. This was in addition to participants from countries that regularly send attendees, including Malaysia, India, Australia, Hong Kong, the Philippines, Japan and the UK, he said.
The event has attracted more interest from the life and health sector, Haushofer added, in addition to the property and casualty reinsurers who typically attend the physical event in large numbers.
He noted that the COVID-19 pandemic has presented a considerable challenge to the reinsurance industry, but insisted the community had risen to the challenge with its inventiveness and resilience.
“This event proves the power to change is in all of our minds,” he said.
SIRC, Artificial Intelligence, COVID-19, Insurance, Reinsurance, Heng Swee Keat, Asia-Pacific