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Region's regulators to study development of sustainable insurance products

Southeast Asian insurance regulators have agreed to create a task force to conduct a collaborative study on ASEAN sustainable insurance product development, according to Dr Suthiphon Thaveechaiyagarn, the secretary-general of Thailand's Office of Insurance Commission (OIC).

He revealed this as the chairman of the 25th ASEAN Insurance Regulators’ Meeting (AIRM) in Bangkok in December 2022. Thailand was the host of the AIRM as well as the 48th ASEAN Insurance Council (AIC) Meeting 2022 held from 6 to 9 December which culminated in a Joint Plenary Meeting by the regulators and the private sector, with the theme: “Strengthening ASEAN Insurance Ecosystem Towards Digitalization and Sustainability”.

Outlining key progress in ASEAN Insurance cooperation, Dr Suthiphon highlighted the following:

1. Acceleration of sustainable insurance

Regulators will identify and monitor risks and opportunities associated with environmental, social and governance (ESG) issues. They will also push for more efforts to initiate more concrete approaches to accelerate sustainable insurance.

One way of doing this is to survey the available sustainable products and by sharing good practices on measures and incentives. In particular, the following actions will be done: acknowledge the significant principles of an implementation plan for the ASEAN Economic Cooperation (AEC) Circular Economy Framework;

  • create a task force to conduct a collaborative study on ASEAN sustainable insurance products development;

  • provide investment incentives; issue guidelines related to sustainable finance;

  • set up the technical working group on sustainable insurance and ESG, and develop an ESG data platform.

The AIRM also acknowledged the AEC’s Implementation Plan from 2023 to 2030 by encouraging the development of new insurance products. In particular, these new products are aimed to mitigate climate risks for small & medium-scale farms or producers; and other new products that will reduce transaction risks and/or costs for circular products.

2. Insurance supervision

The regulators will exchange information on recent developments in digitalization and sustainability efforts. They will respond to digitalization and sustainability by:

  • establishing the Cyber Resilience Assessment Framework (CRAF); strengthening collaboration on cyber threat intelligence at the regulators’ level and the national level;

  • issuing guidelines on the adoption of regulatory sandbox framework for pilot agricultural insurance;

  • issuing guidelines on foreign-currency-denominated investment and insurance companies;

  • adopting an Own Risk and Solvency Assessment (ORSA) framework; and

  • acknowledging the 2022 ASEAN Surveillance Report (AISR) and tasking the ASEAN secretariat to conduct training programmes on data compilation.

3. Climate risk

The ASEAN Disaster Risk Financing and Insurance (ADRFI) platform is currently in Phase 2 (2019 –2023). The regulators will encourage ASEAN members to share data on disaster risk that would help mitigate the impact of climate change.

4. ASEAN Scheme for Compulsory Motor Vehicle Insurance (ACMI)

There was progress as well as key challenges in the implementation of the ASEAN Blue Card Scheme. The AIRM has supervised and guided the implementation of the ACMI through the ASEAN Council of Bureaux (COB), one of the AIC’s working groups.

ASEAN Insurance Council

In his turn, AIC secretary-general Mr. Christian Wanandi said that the AIC Working Committees were actively addressing sustainability and climate change concerns.

As presented by ASEAN Insurance Education Centre (AIEC) chair Michael Rellosa, the Committee is incorporating the Module on Climate Risk Management and Environmental Risk Management in the ASEAN Professional Insurance Diploma (APID) to be launched in 2023.

The ASEAN Reinsurance Working Committee (ARWC), represented by chairman Zainudin Ishak, will embark on an ASEAN ESG Scheme in support of the ASEAN governments’ renewal energy policy. The ARWC believes that the insurance industry plays an important role in the transition towards a low-carbon economy.

The ASEAN Natural Disaster Research and Works Sharing (ANDREWS), chaired by Heddy Agus Pritasa, has made the first step in addressing regulators’ request for ASEAN member states to share data on disaster risk that would help mitigate the impact of climate change. The members of ANDREWS submitted their reports on Sovereign Catastrophe Management in their member states.

They also shared agricultural insurance reports of their respective countries.

ASEAN COB chairman Wasit Lamsam reported that the Council had digitalized the motor vehicle insurance system at the border by adopting the E-Blue Card Scheme. The ASEAN COB seeks support from the regulators in raising public awareness, recognition and compliance with the Blue Card scheme.

Further, it seeks the support of the regulators to enforce the E-Blue Card as a verification document at border checkpoints and encourage insurers to integrate with the ACMI system. Thailand, as the ACMI administrator, has been assisting the national bureaux of ASEAN member states in integrating their system with the online purchase of motor vehicle insurance on the ASEAN COB website:

Finally, the newly-formed ASEAN Takaful/Retakaful Working Committee (ATRWC) was introduced. Its chairman Mohammad Nizam Yahya said that the Committee would serve as the official ASEAN channel for cooperation among takaful Associations and takaful and retakaful operators in the region. The development of takaful and retakaful is in various stages within ASEAN member states at present.

The ASEAN Insurance Council (AIC) was established in 1978 as the main regional platform for insurance professionals to network and share their knowledge and expertise in various areas of the insurance business.

The ASEAN Insurance Regulators’ Meeting (AIRM) was established in 1998, at the height of the Asian Financial Crisis, to serve “as a platform to strengthen insurance cooperation in the development of insurance regulatory and supervisory frameworks and research and capacity building through the ASEAN Insurance Training and Research Institute (AITRI).”



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