In order to achieve this, the MAS is pursuing four strategies – namely to increase supply-side capacity, to promote insurance demand, both locally and in Asia-Pacific, to develop a true marketplace, where sellers and buyers come together to negotiate and trade risks, and foster a conducive business environment.
"Much of the world remains under-insured. The prospects in Asia are especially bright. The Asian risk landscape is transforming rapidly, generating robust demand for insurance and re-insurance," Menon said at the 12th Singapore International Reinsurance Conference held yesterday.
Over the next decade, the insurance business in Asia is projected to grow at about 8% per annum, while by 2020, Asia is likely to account for almost 40% of the global market.
"As the leading insurance centre in Asia, Singapore is well-placed to serve the burgeoning insurance needs of the region," Menon said.
Singapore is recognised as the leading reinsurance hub in Asia, he said noting that amongst the top 25 reinsurers in the world, 16 have regional hubs here.
Increase capacity
The MAS is focused on increasing the quality and diversity of underwriting expertise so as to be more responsive to their clients and make underwriting decisions quickly.
The authority said it will seek to increase the depth of expertise in Singapore by continuing to work with existing players to build up their specialty and reinsurance underwriting and broking capabilities as well as expand their regional hubs.
The regulator will also seek to increase breadth in the industry by promoting growth in emerging business lines, such as cyber risks.
Noting the severe paucity of data on Asian risks, Menon said Singapore is addressing this gap by setting up several research institutions to gather and analyse data in specific areas of risks.
Promote Asian demand
The MAS added it also wants to promote insurance demand in Asia by enhancing cross-border access to regional markets.
Noting the ASEAN economies are working together on a comprehensive insurance liberalisation framework, he said the MAS aspires to achieve substantial liberalisation by 2020 for all insurance sub-sectors – namely life insurance, non-life insurance, reinsurance and retrocession, insurance intermediation, and insurance auxiliary services.
The framework is expected to be discussed at the ASEAN finance ministers’ meeting next year.
Develop the marketplace
In order to develop the marketplace, the MAS is keen to expand the broker network, encouraging a subscription market, and create more platforms to bring buyers and sellers together.
Foster a conducive business environment
Strong regulatory standards and talent development programmes are needed to foster a conducive business environment for insurance, Menon said.
"Through promoting sound risk management and a safe environment, regulation fosters confidence in the industry and helps attracts business," he said.
Factors driving Asia
According to Menon, Asia’s better than global average growth, rising affluence and a growing middle class that will underpin a steady increase in insurance penetration rates, are driving the growth.
Along with this, the vulnerability of Asia to natural catastrophes along with a growing risk awareness, coupled with rising asset values, will also lead to greater demand for catastrophe insurance and reinsurance, including alternative risk transfer solutions.
Asia’s ageing population will further lead to greater demand for health insurance, annuity and other retirement security products.
