The insurance industry and the business community in ASEAN are at a crossroads of transformation, with ASEAN remaining as a symbol of dynamism and resilience amidst all the headwinds and tailwinds of financial uncertainties. Speakers at the fifth ASEAN Insurance Summit discussed the ways and means to accelerate the transformation and sustainability of the ASEAN Insurance Industry.
“Public and private cooperation should be emphasized which has proved successful in dealing with the COVID-19 pandemic. Now, we continue to be confronted with new challenges and risks. The private sector must work together with the government to bring various sustainability initiatives to fruition,” said ASEAN Insurance Council secretary-general Christian Wanandi in his opening remarks to the Summit.
“With the support of the industry, regulators are adopting policies and implementing safeguards to strengthen the ASEAN insurance industry,” he said.
ASEAN continues to shine as an economic powerhouse
“The ASEAN region has successfully navigated through the economic impact of the global pandemic. After the remarkable rebound of 5.7% in 2022 in our GDP growth, ASEAN continues to shine as an economic powerhouse, with economic growth projection of 4.6% and another 4.7 to 4.8% for the year 2024,” said ASEAN Economic Community deputy secretary-general Satvinder Singh in his special address to the Summit.
“Therefore, it is showing buoyancy, driven by the robust domestic demand and all the continued recovery we have seen in all the major sectors of trade, including tourism,” Mr. Singh said.
In speaking about evolving landscapes, Mr Singh said, “There are two emerging trends that are forging our visionary path in the future. One is that of sustainability and the other is digital transformation”.
“ASEAN has harnessed digital transformation to help accelerate economic growth. This year in September, economic and ASEAN leaders formally launched the negotiations for the digital economic framework agreement which is to build a seamless, secure and inclusive digital trade ecosystem across the region,” he added.
ASEAN Insurance Pulse Highlights: Impacts of inflation on ASEAN insurers
Malaysian Reinsurance Berhad (Malaysian Re) launched the seventh edition of the ASEAN Insurance Pulse at the Summit, which is dedicated to the topic of inflation and its impact on the ASEAN insurers.
As stated in the key findings of ASEAN Insurance Pulse 2023, the surge in inflation coined much of 2022, resulting in a tightening of monetary policy – and in turn – capital market volatility and a depreciation of currencies in some emerging markets.
For insurers, inflation caused challenges on the underwriting and on the investment sides, in operations and contributed to a tightening of reinsurance capacity.
Inflation did not affect all ASEAN insurers equally across the ASEAN markets and in fact varied greatly according to their business model. Those with a high share of personal lines as motor, property and medical insurance were the most affected than those focused on commercial lines or in reinsurance.
“The ASEAN region, which consists partly of emerging and partly of mature markets, is no stranger to inflation. Nevertheless, complexity, speed and the altitude to which inflation surged within just a few months, present a novelty to most of us in this industry,” said Malaysia Re president and CEO Ahmad Noor Azhari Abdul Manaf.
“We had anticipated the impact of inflation on claims on our books in 2022. The large losses from the Eastern Australian floods in 2021 had served as an eye-opener for the impact of inflation on claims payments, as we could see its effects on the cost for replacement materials as well as triggering a shortage in construction workers and thus causing further costs,” said Mr. Ahmad.
The fifth ASEAN Insurance Summit was held on 5 December 2023, organized by the ASEAN Insurance Council (AIC) and the Singapore College of Insurance (SCI), followed by the 26th ASEAN Insurance Regulators' Meeting (AIRM) and the 49th ASEAN Insurance Council (AIC) meetings from the 6-8 December 2023, in Ha Long, Vietnam.