Liga Asuransi – As the CEO of our insurance brokerage firm, I recently had the privilege of attending the 19th Singapore International Reinsurance Conference (SIRC) in 2023, and I couldn’t be more excited to share my experiences with you. This event was not just an ordinary conference; it was an eye-opening journey into the dynamic world of reinsurance that left a profound impact on me and my dedicated team of four staff members who accompanied me.
Our primary objective in attending SIRC 2023 was to immerse ourselves in the vast landscape of the insurance and reinsurance industry. We wanted to show our team just how immense and impactful this sector truly is. The conference served as an invaluable platform for connecting with fellow professionals, industry leaders, and reinsurance partners, offering us unparalleled insights into the field.
One of the highlights of the event was the opportunity to meet our esteemed reinsurance partners from various corners of the globe. It was a pleasure to reconnect with partners like Sime Darby Lockton from Malaysia, JA Broker of Singapore, and Challenge Re from Malaysia. These interactions allowed us to strengthen existing relationships, discuss potential collaborations, and gain a deeper understanding of the regional and global insurance landscape.
Beyond our reinsurance partners, we had the honor of meeting many friends from Indonesia. These connections enriched our network, broadened our perspectives, and demonstrated the significance of the Asian insurance market. The relationships forged at SIRC 2023 hold the promise of exciting future opportunities and collaborations.
But SIRC 2023 was about more than networking and partnership building; it was a transformative experience that left me with a wealth of knowledge and invaluable insights. The conference’s sessions and discussions were nothing short of enlightening. We explored emerging industry trends, discussed challenges, and uncovered innovative solutions. The knowledge gained from these sessions was a catalyst for fresh ideas and strategies that will shape the future of our insurance brokerage firm.
This article aims to provide you with a glimpse of my exciting journey at SIRC 2023. I’ll delve deeper into the key takeaways, inspiring conversations, and thought-provoking moments that defined this remarkable event. The knowledge and inspiration I garnered during these days are bound to leave a lasting impact on our company’s vision and direction. So, join me on this journey through the world of reinsurance, as we uncover the limitless possibilities that lie ahead.
The Singapore Reinsurers’ Association (SRA) held the 19th Singapore International Reinsurance Conference (SIRC), which took place from October 30 to November 2, 2023, at the Sands Expo & Convention Centre in Marina Bay Sands, Singapore.
This event was an invaluable platform for industry experts to discuss pressing challenges and opportunities in the ever-evolving landscape of (re)insurance. Following the resounding success of the previous year, where over 2,200 delegates from 62 countries participated, SIRC 2023 is expected to be even more impactful.
The theme for this year’s conference is “(RE)INSURANCE RESET,” a concept that aptly reflects the dynamic environment in which the insurance industry operates. This theme emphasizes the need for adaptation and innovation in the face of mounting challenges.
Key Challenges and Themes:
- Economic Challenges:
With looming threats like inflation, rising interest rates, and economic uncertainty, the insurance industry faces significant hurdles. Reinsurers must carefully navigate these challenges to remain relevant and resilient in the market.
- Geopolitical Tensions:
Geopolitical tensions, such as the US-China conflicts and the Russia-Ukraine war, continue to influence supply chain risks across various sectors, including food, energy, commodities, and technology. These tensions pose unique challenges that will be addressed at SIRC 2023.
- Climate Change:
The devastating effects of climate change are becoming increasingly apparent, with the frequency and cost of natural catastrophes on the rise. The insurance industry must devise strategies to adapt to this new normal.
- Cyber Risks:
In a world marked by digital transformation, the Asia-Pacific region stands as a focal point for cyber risks. With the cyber insurance market expected to triple by 2025, there’s an urgent need for discussion and solutions.
SIRC 2023 aims to bring together industry leaders, policymakers, businesses, and academia. This collaborative approach is crucial for securing a more resilient future in Asia. The conference will offer a blend of leading-edge insights and invaluable networking opportunities, reflecting its commitment to driving the industry forward.
THE MESSAGES FROM THE SINGAPORE REINSURERS’ ASSOCIATION (SRA)
The following is the summary of the keynote speech by Mr. Ravi Menon, Managing Director, Monetary Authority of Singapore.
A Decade of Remarkable Progress
A full decade has passed since the last address at the SIRC, during which the Monetary Authority of Singapore (MAS) unveiled its vision and strategies for the reinsurance industry in Singapore.
Back then, the spotlight was on three pivotal forces shaping the demand for insurance in Asia:
- Dynamic Growth: The Asian continent was in the midst of exponential growth, marked by rising affluence, expanding trade, and ambitious infrastructure development.
- Vulnerabilities Abound: Asia’s susceptibility to natural catastrophes was a constant concern, with the region being particularly prone to such events.
- Aging Population: Asia’s demographic landscape has shifted, with a growing elderly population and an increased demand for retirement security solutions.
Remarkably, these trends unfolded as anticipated and remained influential over the next decade. The demand for insurance protection in Asia intensified, primarily due to the interplay between growth and aging, compounded by the profound impact of climate change.
In 2013, a vision was painted, aspiring for Singapore to evolve into a global insurance marketplace, built on four key pillars:
- Boosting Supply: Enhancing the capacity and expertise of the supply side of the insurance industry.
- Stimulating Demand: Promoting insurance demand both locally and across the broader Asia-Pacific region.
- Creating a True Marketplace: Cultivating an environment where insurers and buyers converge to exchange and transact risks effectively.
- Nurturing a Business-Friendly Ecosystem: Fostering a conducive environment for insurance operations.
Singapore’s Remarkable Progress
Significant headway was made in many of these domains, yielding notable achievements:
- A Hub of Excellence:
Singapore proudly serves as the Asia-Pacific hub for 12 leading global insurers and reinsurers.
- Diverse Underwriting Expertise:
The densest regional concentration of underwriting teams specializing in complex property and casualty, as well as specialty lines, emerged. These included emerging areas such as cyber, pandemic, and climate-related risks.
- Growth in Premiums:
Since 2013, direct general insurance gross premiums in Singapore surged by almost 80%, reaching S$12.9 billion in 2022. Simultaneously, reinsurance premiums more than tripled, reaching S$21 billion in 2022.
- Broker Network Expansion:
The strategy to create a true marketplace bore fruit, facilitated by the development of a robust broker network. The number of brokers in Singapore doubled since 2013, growing from 70 to 148. These brokers used Singapore as a hub for placing global and regional programs, data analytics, risk modeling, and advisory services.
Challenges persisted, with data gaps for Asian risks remaining despite significant efforts. The data landscape improved, with databases and models for risks like cyber attacks and natural catastrophes, but there was still a need for more up-to-date, high-resolution data on economic exposures to key perils in Asia.
Furthermore, Singapore’s transformation into a global insurance marketplace would not have been possible without sound regulation. The enhanced risk-based valuation and capital framework, RBC 2, was successfully implemented in 2020, significantly fortifying the resilience of the insurance industry.
However, the journey was not complete. In addressing emerging risks, such as climate change and the loss of natural capital, the Monetary Authority of Singapore progressively integrated environmental risk management into its supervisory framework and processes. While Singapore nurtured local talent and attracted global professionals, there was still a shortage of expertise familiar with growth markets in Asia, particularly Southeast Asia. It was clear that more comprehensive, industry-wide efforts were required to address these knowledge gaps.
Singapore had cemented its position as Asia’s leading reinsurance hub, commanding a market share of 24%. Notably, 16 of the world’s top 25 reinsurers designated Singapore as their regional hub, extending their coverage beyond ASEAN to encompass markets in North and South Asia, as well as Australia. Total reinsurance premiums consistently expanded, growing at an annual average of 13.6% since 2013, reaching S$21 billion in 2022. The digitalization, data analytics, and sustainability solutions developed for the Asian market by global reinsurers operating out of Singapore reflected the forward-looking and innovative spirit of this hub.
Embracing New Risks and Opportunities
As we peer into the past, the fundamental themes of Asian growth, demographic change, and vulnerabilities persist. Emerging Asia became a principal contributor to global economic expansion, surpassing even the most developed economies. With this growth, the need for protection of lives, wealth, and assets increased, promising significant growth prospects for insurance markets in the region. Projections indicated that APAC’s reinsurance premiums would experience an annual average growth of 7%, escalating from US$171 billion in 2021 to US$246 billion in 2026.
Yet, Asia remained a region perilously exposed to natural disasters, with considerable gaps in protection. For instance, the “Ring of Fire” in the Pacific, inhabited by half of Asia’s population, experienced frequent volcanic eruptions and earthquakes. Surprisingly, a mere 14% of the US$80 billion in economic losses resulting from natural disasters in the Asia-Pacific region in 2022 were covered by insurance. Additionally, the swift pace of digitalization rendered the region most susceptible to cyber risks, with the Asia-Pacific accounting for 31% of all global cyber incidents in 2022. As such, the Asian cyber insurance market was anticipated to triple by 2025.
Simultaneously, new risks and opportunities emerged. The rise of geopolitical tensions, such as the US-China rivalry and the Russia-Ukraine conflict, profoundly impacted supply chain risks, spanning various sectors like food, energy, commodities, and technology. Moreover, the era of low interest rates was definitively over, leading reinsurers to confront inflation-driven increases in current claim amounts.
Climate change stood as a formidable challenge, with natural disaster occurrences consistently exceeding modeled expectations. In the first half of 2023, global natural catastrophe losses amounted to a staggering US$110 billion, surpassing the 10-year average of half-year losses by US$12 billion. Insurers became discerning in the risks they underwrote, sometimes shunning lines that had experienced elevated losses, such as those linked to California wildfires and Australian floods.
In the ever-evolving realm of reinsurance, SIRC 2023 proved to be more than just an event; it was a transformative experience that has left an indelible mark on our insurance brokerage firm. As we wrap up our journey through the myriad facets of the conference, it’s essential to reflect on the key takeaways and the exciting future they promise.
SIRC 2023 reaffirmed the notion that the insurance and reinsurance industry is a dynamic, ever-expanding ecosystem, teeming with opportunities and challenges. The insights gained from expert speakers and insightful panel discussions have provided us with a unique perspective on emerging trends and evolving market dynamics.
The connections we forged, whether with reinsurance partners or industry peers from various regions, have reinforced the importance of collaboration and shared expertise. It’s through these connections that innovative ideas are born, and strategies for tackling complex challenges are refined. We are excited about the potential collaborations that lie ahead and the growth opportunities they present for our company.
Our commitment to growth and adaptability is further invigorated by the innovative solutions we encountered at the conference. The reinsurance landscape is evolving to encompass new risks and technologies, and SIRC 2023 showcased the potential of digitalization, data analytics, and sustainability solutions to revolutionize the industry.
As we look toward the future, the knowledge and inspiration we gained at SIRC 2023 will serve as the guiding force in setting our course. Our insurance brokerage firm is poised to embrace change, cultivate resilience, and continue to provide our clients with cutting-edge solutions. We are excited to translate these insights into tangible actions that will shape our firm’s future and contribute to the growth and development of the broader insurance industry.
In closing, SIRC 2023 was a journey of discovery, connection, and enlightenment. It has empowered us to navigate the ever-evolving insurance landscape with confidence and vigor. We look forward to sharing these experiences with our clients, partners, and peers, and together, we will chart a new course toward a brighter and more secure future in the world of insurance.
This article is presented by L&G Insurance Broker. A leading local insurance broker in Indonesia.
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