The insurance industry across ASEAN has adapted well to the changes forced by the COVID-19 crisis, which disrupted economies and financial markets, said Monetary Authority of Singapore assistant managing director Marcus Lim, at the ASEAN Insurance Summit on Wednesday morning.
“When we last met in 2018, the focus of the summit was on the Fourth Industrial Revolution and how digitalization and new technologies could impact the insurance sector,” he said, during his keynote address at the summit, organized by the ASEAN Insurance Council and the Singapore College of Insurance. “Nobody could have foreseen the speed at which we had to embrace digitalization since then.”
Beyond the disruption to financial markets, the pandemic also forced insurers to transform the way they worked and how they interacted with customers. Despite the turbulence of last year, the insurance market across Asia remained resilient, with Asia-ex-Japan registering a 2.9% growth in total gross written premiums in 2020.
“While this was slower than the robust 6.8% growth in 2019, it was still significantly stronger than the global experience, which saw a decline of 2.1%. Looking ahead, the Swiss Re Institute has forecasted a global premium growth of 3.3% in 2021, largely driven by China and emerging Asian economies,” Mr Lim said.
The COVID-19 crisis has highlighted the importance of resilience, reflected in this summit’s theme, as the world continues to wrestle with what the new normal looks like.
Mr Lim noted that unity with policyholders and regulators would serve the insurance industry well and allow them to create a more resilient future amidst such uncertainty.
He highlighted the various relief measures that were introduced in several jurisdictions to help customers maintain their insurance coverage in a time of financial crisis. Malaysia, Thailand and Singapore had insurers extending the grace period for policyholders to pay their premiums, while insurers in Brunei and Singapore automatically provided their customers with free COVID-19 coverage.
“Asian insurance regulators also played their part by adjusting regulatory requirements to enable insurers to better manage the disruptions,” he said. “Indonesia’s OJK, Bank Negara Malaysia and MAS were among the regulators that extended the deadlines for regulatory submissions. The Philippines Insurance Commission introduced temporary relaxation of capital requirements. The trust and goodwill built up between insurers and their customers during this period will serve both sides well.”
Strength in numbers
The pooling of risk is an integral part of the insurance business and sharing expertise and information only makes the industry stronger.
“While ASEAN's insurance market continues to see strong growth, there are areas where work remains to be done for us to be more resilient as a region,” he said. In this regard catastrophe and disaster risk remained in focus for ASEAN, even amidst the pandemic, with Mr Lim pointing out the continued efforts of the Southeast Asia Disaster Relief Insurance Facility and the ASEAN Disaster Risk Financing and Insurance program to create data and resilient funding for the region.
“Stronger partnership between the public and private sectors will also be key. The Global Asia Insurance Partnership brings together industry policymakers and academia to undertake research and co-create innovative risk financing solutions to strengthen Asia's resilience against large scale risk,” he said. “Platforms such as this will play an important role in helping leverage our respective strengths.”
He also noted climate change to be existential crisis of our generation and that regulators must continue to steer the insurance industry towards greater sustainability while recognizing the unique challenges that the region faces.
“In particular, there is diversity in the level and nature of social, economic and industrial development among member states. This means that an approach suited for more developed markets cannot be applied in this region wholesale. It is not practical to expect our member states to suddenly cut their reliance on energy intensive industries, but this should not deter us from taking steps towards achieving an orderly transition to industries that support low carbon emissions and sustainable resource management,” he said.
More education programmes launched
Also at the Summit, the ASEAN School of InsurTech, Analytics and Innovation was officially opened.
An initiative of the ASEAN Insurance Education Committee and endorsed by the ASEAN Insurance Council, the School was conceived by Singapore College of Insurance (SCI) and set up in collaboration with the regional training institutes. Its aim is to align with the vision of the World Economic Forum’s Digital ASEAN launched in 2018, to fully unlock the benefits of the 4th Industrial Revolution, to develop the human capital pool of the ASEAN and to ensure that its citizens have the skills needed to thrive in the digital and technology driven world.
Governed by the principles of inclusivity, access and impact, the School has rolled out the ASEAN Certificate in Insurtech 4.0 and the ASEAN Certificate in Data & Data Analytics in English and in multiple ASEAN languages, delivered on an award-winning mobile learning platform. The Certificates offered under the ASEAN Digital Competency Framework (ADCF) developed by the SCI, will stack up towards Graduate Certificates. Digital skills badges will be awarded to recognise the learning achievement at different levels.
Visit School at ASEANDigitalSchool.com to find out more.