The outlook for the reinsurance industry remains positive in Asia, says Singapore’s Minister of Trade and Industry, Alvin Tan, as Asia continues to urbanise with projections that gross written premiums for life and non-life insurance are expected to grow to S$60bn and S$20bn respectively in by 2025.
Tan notes that these growth trends in Asia will benefit Singapore’s insurance industry, given the country’s role as a key reinsurance centre for the region.
He adds that the reinsurance industry has grown deep roots in Singapore over the past five years, with total reinsurance premiums more than doubling over the period, reaching S$20 billion in 2021.
Tan stated during a speech at the SIRC conference this week, “Since 2017, reinsurers have progressively developed their Asia-Pacific functions in Singapore to better support the region’s insurance markets and provide risk financing solutions.
“Reinsurers have also established strong partnerships with local and regional insurers, to produce more accurate risk assessments, support underwriting and pricing, and improve customer value propositions.”
He adds, “Singapore continues to be an important specialty insurance hub for Asia. We have started to grow our capabilities in newer lines of risk, in particular, cyber. While cyber insurance remains a nascent market in Asia as compared to Europe and North America, we are seeing more insurers establish cyber underwriting desks and resources for Asia in Singapore.
“We have complemented our reinsurance market growth and debt capital markets capabilities by establishing Singapore as a domicile for Insurance-Linked Securities, or ILS. To date, Singapore has supported 22 ILS in the form of catastrophe bond issuances, by cedants across US and Asia-Pacific.
“In spite of the market uncertainties from COVID-19, the ILS deal flow reflects a growing familiarity and confidence in Singapore’s ILS regime.”
On the prospect of the future of Asia and Singapore’s reinsurance industry, Tan suggests that Singapore’s reinsurance industry must continue its meaningful work in narrowing the region’s growing protection gap.
He cites a recent study from PwC, which estimates the global protection gap could reach S$2.7 trillion by 2025, with Asia-Pacific accounting for almost half of all uninsured risk.
In this heightened risk environment, Tan says the role of reinsurance in partnering individuals, businesses and economies in reducing risk is all the more important. He concludes, “to support the risk transfer needs of Asia amidst the heightened uncertainty, we must continue to grow Singapore’s capabilities in Asian insurance and risk transfer, and catalyse insurance risk advisory and risk transfer solutions for Asia.”
In addition to being Singapore’s Minister of Trade and Industry, Alvin Tan is Minister of State for Culture, Community and Youth. He is also a member of the governing People’s Action Party, and has been the Member of Parliament representing the Moulmein–Cairnhill division of Tanjong Pagar GRC since 2020. He is also a Board member of the Monetary Authority of Singapore.
