Singapore reinsurance sector thrives amidst climate challenges The SIRC organising committee with the guests of honour Mr Gan Kim Yong The 20th Singapore International Reinsurance Conference (SIRC) saw over 3,300 participants this year, with nearly 2,000 joining in from overseas. Singapore deputy prime minister, minister for trade and industry and chairman of the Monetary Authority of Singapore Gan Kim Yong gave the keynote address. “Climate change, a core challenge, is accelerating, impacting risk projections. Nat CAT in Asia averaged S$106bn in insured losses annually, while a large protection gap remains - 91% of Asia’s S$65bn economic loss in 2023 was uninsured. Without more decisive action, Asia risks losing 20% of its GDP by 2048, with ASEAN nations potentially losing 29%,” he said. “The insurance industry has both an urgent need and opportunity to bridge this reinsurance gap. By collaborating with governments, researchers and tech providers, insurers can enhance risk models, scenario analyses and climate data specific to Asia,” he said. Energy transition “The shift to renewable energy is essential for Asia to achieve net-zero goals while meeting rising energy demands. Asia, responsible for half of global greenhouse gas emissions, largely depends on fossil fuels. Investment in renewables across APAC is expected to reach S$1.3tn by 2030, with substantial infrastructure projects in solar, hydropower and wind,” Mr Gan said. Digital transition “By 2030, APAC’s digital economy is expected to surpass S$2tn, fuelled by e-commerce, FinTech and advancements in AI and cloud services. As digital adoption increases, so does the risk of cyber threats. The region’s cyber insurance market is projected to double between 2023 and 2027, driven by demand for coverage against data breaches, ransomware and other cyber risks. Insurers are advancing cyber risk models to support dynamic risk assessment, and the industry is urged to encourage robust cyber security measures to manage these risks effectively,” he said. Demographic transition Asia’s ageing population, urbanisation and growing middle class are driving demand for life and health insurance. Singapore is projected to reach ‘super-aged’ status by 2026. This demographic shift, alongside rising life expectancy, will increase demand for long-term health care, pension and financial products. Growing urban wealth will also spur demand for life insurance and savings products. “The rise of InsurTech is expanding insurance coverage, leading to complex risks and greater opportunities for reinsurance. Asia currently holds 39% of the global life insurance market, with projected growth exceeding 5% annually over the next decade, outpacing the global average,” Mr Gan said. Mr Marc Haushofer 20th SIRC organising committee chair Marc Haushofer said, “This year’s theme, Revolutionize (Re)insurance!, could not be timelier as we navigate a world reshaped by climate change, technological disruption and shifting global economies. Our industry faces the task of adapting to emerging risks and embracing new technologies.” “From addressing the urgent challenges of climate change to exploring the broad impacts of AI integration, our discussions will not only identify current opportunities but also shape our future direction. Additionally, talent management is key as we navigate a constantly evolving workforce,” Mr Haushofer said. “Attracting, retaining and nurturing talent remains essential for our sector’s success,” he said. Revolutionise reinsurance with partnership and data by Ahmad Zaki A conversation with Andreas Berger During his keynote speech during the opening of SIRC yesterday, Swiss Re group CEO Andreas Berger said that protection gap issues are so big that the industry cannot tackle them on its own. These issues include Nat CAT and climate risks, cyber and civil unrest, all risks that have grown exponentially over the past few years. Revolutionising the industry, he said, was about data and partnerships. “It’s about people, and it’s about making the world more resilient out there. It’s clear that we were tackling so many issues, but the issues are so big that we cannot tackle them on our own. So that’s why it needs a concerted effort, where we have to come together. “We need to step up our game – not just to close the protection gap, but to prevent it from widening, as it is in Asia,” he said. “In fact, its not just widening in developing countries, but also in developed nations. The protection gap in the US is also widening.” Part of this, he said, is due to the decisions humans make as individuals; in the US, for instance, there have been a rise in people living in flood and hurricane zones, which increases the loss numbers. “People need the right incentives to manage their risks in these exposure areas. We also need governments to do their part by improving building regulation. Without a private public partnership, this approach will not work.” Industry role “We are not just a shock absorber and capacity provider. We can provide dependable risk assessment. We can do effective volatility management and increase risk protection. And it’s much more than that. So when we look at the past two decades, you can see that as an industry we were pretty resilient. We have weathered the storm,” he said. However, the storm is getting worse. It’s not just Nat CAT rates and severity that have been rising, but the number of claims rising from strike, riot and civil commotion rose by 3000% over the past two decades. Population growth plays a significant role in this surge, especially in urban areas, which leads to social tensions and a heightened risk of civil unrest. “To revolutionise, we must have the right tools at hand. There has been a lot of model uncertainty, which leads to loss creep. The root cause is the lack of data on up-to-date exposures and current risk values,” he said. “The awareness is there, but the quantification is not really understood.” Focusing on data Mr Berger also noted that there are many solutions that exist in the world, and many companies that provide tools and services that go beyond risk management. “There might be too many providers, in fact. If you look at just the software providers, it also adds a level of complexity to your organisation, and to integrate it into your landscape can be challenging,” he said. “And the data is no longer in one spot anymore. You constantly have to leave your underwriting environment and switch screens.” He encouraged both reinsurers and primary insurers to focus on data management and organisation. “You should spend time and effort and resources on this. It’s an investment and you will definitely see a return,” he said. Being cautious on AI Mr Berger also admitted that AI is a bit hyped and people will have a real wake-up call when the usage of AI is not done in the proper way and they realise the true costs. He equated it to the cloud computing boom from a few years ago, when companies rushed to migrate everything to the cloud – even if it was not necessary – and then were shocked by the costs afterwards. Once again, his answer was based on data. “Get your data right, first. Then you will know where to apply AI and reap the benefits,” he said. Stable, consistent and with clients for the long term by Sarah Si Having been in business for more than 50 years, the reinsurer has been through so many market cycles, it is “not new to us,” said in Everest Re CEO, APAC Kevin Bogardus. “For the benefit of our clients and brokers, we strive to minimise the peaks and troughs of the cycles through our consistency,” Mr Bogardus said. At the moment, he said, Everest Re is “in a disciplined underwriting cycle and expects it to continue”. He said, “We have reached a new baseline in this elevated risk environment and with additional demand coming into the market, attachment points and terms and conditions (T&C) are expected to remain stable.” Mr Bogardus also expects risk-adjusted returns “to remain excellent” at 1/1 and throughout 2025. Pricing: Consideration of relationship strength and length When asked what he expected for pricing at the upcoming renewals, Mr Bogardus first noted that it was important to look at each country and client individually, before saying that the strength and length of the relationship should be considered so that Everest Re could strive to “achieve the objectives of all parties”. “We believe that our strategic partners – clients and brokers – are not looking to destroy sustainability in the business and relationships which are built over years,” he said. While Mr Bogardus does not think there will be any surprises regarding T&C at 1/1, he was also keen to point out that Everest Re was prepared to respond to client needs to find solutions. “Many times, those needs require fresh and ‘out-of-box’ thinking. We try not to be dogmatic but rather pragmatic in how we respond to our clients’ needs. We do not have any red lines or hard rules that we apply to all,” he said. Capacity: Available but not indiscriminate As APAC is a diverse region, there is strong demand for reinsurance solutions “not just in property, but in other lines as well”, Mr Bogardus said. While capacity is available, he also believes that it should not be indiscriminate. “A number of markets were affected by Nat CAT losses in 2024. As such, there is a likelihood that some markets will face more challenges than others at 1/1. There should be the expectation of payback to reinsurers,” he said. Everest Re still has considerable capacity to deploy, he said, although discipline in its deployment will be maintained across all markets, clients and lines of business. Another area where discipline will be maintained, he believes, is underwriting. He said, “Winning deals at ‘all costs’ will not be our approach. “We do not think this is sustainable or suits anyone over the long term. We believe that our true partners would prefer that we are stable, consistent and with them for the long term.” Everest Re: Growth trajectory Everest Re’s growth strategy, as seen over recent years, is not based purely on property business and a few large markets, according to Mr Bogardus. “Rather, we are expanding into most lines of business and across countries and territories where we see profitable and sustainable longterm opportunities,” he said. Mr Bogardus also highlighted Everest Re’s strong appetite and capacity to grow business at fair prices and with appropriate structure. He said, “In line with our more active approach, we are quoting with the intention to lead on good programmes and with our partners, to strengthen our growth and positioning further.” In the run up to the renewals, Everest Re is having “honest dialogues” with clients and brokers. He said, “We believe that our transparent, honest and consistent communications are critical to successful cooperation”. Entering a period of evolution Malaysian Re is undergoing an extended period of change and evolution, which has allowed the organisation to continue improving and growing. We spoke to its CEO Mr Ahmad Noor Azhari Abdul Manaf about the organisation’s growth plans, its view on the upcoming renewal season, and the challenges that it is facing. by Ahmad Zaki Pricing and terms & condition has long been an issue for insurers across the region, and Malaysian Re’s clients are no different, said Malaysian Re CEO Ahmad Noor Azhari. “If you look at where the market was two or three years ago, a lot of capacity was pulled out from the market, so there was concern about whether programmes could be placed, cumulating from unsustainable pricing and structure adding to the loss experiences seen throughout the industry. Because of this, significant adjustment was seen on across the board basis. However, things have stabilised now,” he said. At the same time, reinsurance pricing in Southeast Asia somewhat does not accurately reflect the exposure that (re)insurers face. “If you look at the developed markets – Europe, US, even Australia, or Japan – there has always been a fast reaction from the market to improve pricing after a major loss,” he said. The worry is that the impact of climate change will lead to the increase in frequency and severity of NatCAT events, what was normal for the industry in the past few decades, will no longer be the same. “The market has been good for us in the past, but everyone has to open their eyes to the fact that the market will be challenging in the future,” he said. “The world will not remain the same, it is not even the same as it was 20 or 30 years ago.” Renewal expectations Every reinsurer is hoping for a stable market; while there is still hardening going on especially in US and Europe, Asia is much slower in that regard. “In Asia, I think we are likely going to stay flat; terms and conditions won’t change much,” he said. However, he noted that at the time of the interview – late September – the typhoon season in Asia was only about halfway done, and things could change at the drop of a hat. Recent results of Hurricanes Helene and Milton in the US prove that large losses could hit Asian shores at any time, especially with the influence of climate change. “While we want everyone to reap the benefits of a calm NatCAT season, we have to remain cautious,” he said. Going beyond capacity Malaysian Re is a regional reinsurer, and according to Mr Azhari one of the challenges for them is to be a preferred reinsurer in the region. For Malaysian Re, it means building more capacity and expertise. “It is important for us to showcase our expertise in all aspects of our business,” he said. “We don’t just want to be trading in capacity – at face value, but we need to show that Malaysian Re has the ability to do things differently as a holistic solutions provider.” Malaysian Re has been building their expertise through talent recruitment and development. The reinsurer has been investing in technical expertise, especially in the actuarial lines and underwriting. “We have been bringing in fresh talent who can bring varied experiences to Malaysian Re,” he said. Apart from refreshing talents, Malaysian Re is also looking at partnering with universities to increase awareness of the industry and the different roles that it offers. For young talents, this also means that they are able to explore the various roles within the industry and different paths of advancement. “We don’t want to restrict them to just one role their entire career, we want to allow them to explore the various roles we have to offer, to do something different with their careers,” he said. Hong Kong’s RBC regime signals a new era Hong Kong’s new risk-based capital regime came into play quietly this year, bringing significant change for insurers. There is also proposed regulation for re-domiciliation in which many insurers have already expressed interest in. Asia Insurance Review caught up with Insurance Authority ’s Mr Clement Cheung . by Sarah Si The most recent regulatory change to Hong Kong’s insurance industry over the past year was the implementation of the risk-based capital (RBC) regime in July 2024. While Insurance Authority (IA) CEO Clement Cheung called the regime coming into effect uneventful, he also said that it “[heralded] a new era for the Hong Kong insurance industry”. “Aligning capital requirements with risk profiles, this solvency framework is sensitive to asset and liability matching, product mix, economic valuation and corporate governance that will reinforce general stability of the market”, he said. Implications of new RBC regime Throughout the process of planning and implementation of the RBC regime, the insurance industry remained “responsive and pragmatic”, Mr Cheung said. “All three iterative quantitative impact studies (QIS) took place during a period of unprecedented interest rate gyrations and high market volatility, which means that the risk parameters have been subject to vigorous stress testing,” he said. According to the Consultation paper on draft insurance (valuation and capital) rules and draft insurance (submission of statements, reports and information) rules, IA “started to develop detailed requirements for the RBC regime and conducted three rounds of QIS in consultation with the industry” upon the conclusion of the consultation in 2015. “Nonetheless, there are suggestions that the framework should be reviewed and refined after it has been in place for about one year”, Mr Cheung said. AI Mr Cheung believes that if deployed correctly, AI can confer benefits in client acquisition, marketing, customer service and fraud detection. “The immediate task in hand is to ensure that our regulatory framework remains robust enough to safeguard the interest of vulnerable groups but flexible and proportionate enough to fulfil industry aspirations. “For this reason, we are contemplating a study to inform the approach that should be taken to promote fair, transparent and ethical use of AI while adequately addressing concerns about algorithmic bias and personal data leakage,” he said. As supervisory technology modules, also known as suptech modules, were embedded into the revamped insurance system that is being progressively rolled out as well as surveillance tools sourced by IA’s enforcement division, and likely contain elements of AI, Mr Cheung said that the regulator will “draw up rules and protocols in anticipation of such a trend”. New regulations According to Mr Cheung, IA has “assumed responsibility for the licensing and regulation of licensed insurance intermediaries since 2019”. However, it is subject to a five-year waiver of licensing and related fees granted by the Hong Kong government. “After extensive discussion, a unified fee charging system will be applied from September 2024. The incremental income so generated should help to intensify our activities spanning across conduct supervision, public education, professional training and disciplinary enforcement,” he said. He also said that industry consultation has commenced “on a mechanism to identify domestic systemically important insurers in Hong Kong and the formulation of recovery or resolution plans”. IA is looking to publish proposals in 2025, which would also enable the regulator to fully comply with requirements set by the International Association of Insurance Supervisors, he said. In July 2024, the Hong Kong Financial Services and the Treasury Bureau released the Proposed Company Re-domiciliation Regime in Hong Kong, containing the consultation conclusions and legislative proposals on a pathway for offshore companies with significant local presence to move their headquarters back to the region. “Many insurance groups have already expressed interest in re-domiciliation, which will inject impetus into development of the ‘headquarters economy’. IA is collaborating with relevant stakeholders and the government to ensure its timely introduction,” he said. Voices of SIRC On the ground at SIRC, Asia Insurance Review spoke to industry executives for their thoughts on innovation, the future of the industry and renewals. Mr Khaled Nouri COO, Oman Re MENA reinsurers eye strategic growth On a global scale, high interest rates and inflation over the past two years have driven the industry toward improved pricing and stricter terms. The reinsurance industry has particularly benefited from this trend, especially reinsurers who have managed to reinvest their capital over the long term at higher yields. Oman Re’s chief operating officer Khaled Nouri said, “So far this year, through the third quarter, we’ve seen over $100bn in losses globally—even before accounting for Cyclone Milton and recent floods in Spain. The Middle East has been no exception. “The region faced Nat CAT losses last year, with major earthquakes in Turkey and Morocco and this year with unprecedented flood losses in the UAE. However, a unique aspect of the Middle Eastern market is that capacity remains available here, unlike in other regions like Europe or Turkey, where capacity has tightened following past events,” he said. “We are hopeful for changes to the market as we approach January 1, 2025,” Mr Nouri added. He believes that the changing frequency and severity of Nat CATs is a major challenge for reinsurers, along with issues of overcapacity and competitive terms. “The region tends to lag behind international trends, which usually take longer to reach here.” In the MENA region, there are several reinsurers and Mr Nouri said he has seen both successes and failures over the years. “The current market dynamics and hard market conditions are likely to support profitability and growth for reinsurers in the region in the coming years. However, for the long-term health and prosperity of the industry, mergers, strategic alignments and investments in technology will be essential,” he said. Mr Robert Newbold President extreme risks events solutions, Verisk Catastrophe modelling powers reinsurance industry Global modelled losses from Nat CAT seem to have reached a new peak with Verisk reporting an estimated $151bn in annual losses, underscoring the role that modelling plays in understanding and pricing risks. “Catastrophe models are as valuable as they have ever been in the global insurance and reinsurance markets, especially as we continue to see no shortage of catastrophe losses worldwide,” said Verisk extreme risks events solutions president Robert Newbold. Verisk is making targeted investments on helping companies deploy modelling techniques. On regional investments, he said, “For Asia and MENA, we’re investing heavily in region-specific perils. With a new Indonesian and Malaysian flood model and an updated Australian bushfire model planned for 2025, we’re focused on enhancing our tools where they’re most needed.” In these geographies, Verisk’s models address unique challenges where building codes and construction standards directly impact risk as seen in tragic earthquake losses in Türkiye and Syria. For earthquakeprone areas, stronger structures and enforced building codes are essential to reducing risk, he said. On the role of innovation, he said, “It’s not just about technology, it’s about data. The quality and granularity of exposure data are vital for assessing risk accurately and we are investing to ensure our models reflect a nearpresent view of climate risk. “Our models now support near-present climate scenarios for up to 10 years and extended views to 2050 or even 2100, which are invaluable for insurers planning long-term strategies and partnerships.” At SIRC 2024, Verisk is reinforcing its message of partnership with reinsurers and insurers. “We’re emphasising that the tools are here to help insurers and reinsurers quantify risk across both core and emerging perils. We’re keen to partner with the industry to close protection gaps and support resilient futures,” Mr Newbold said. Asia Insurance Industry Awards 2024 winners revealed The winners of the 28th Asia Insurance Industry Awards have been revealed, with 20 of the region’s top insurers, reinsurers, brokers, risk managers and service providers bringing home a trophy. The awards are well known for their stringent criteria and transparent selection process, overseen by a panel of expert judges from across the insurance industry. This year, the awards attracted almost 200 entries in 17 categories. The event was held, as usual, in conjunction with the Singapore International Reinsurance Conference. This year’s winners exemplified the best of the industry, showcasing efforts to improve sustainability, groundbreaking digital capabilities and market-leading innovations and solutions. This year, there were ties in three categories, a first in the awards’ 28-year history: General Insurance Company of the Year, Digital Insurer of the Year and General Reinsurer of the Year. Munich Re and Everest Re shared the General Reinsurer of the Year trophy. In the General Insurance Company of the Year category, Ergo Insurance (Thailand) and Go Digit General Insurance both took home the win. Meanwhile, FWD Singapore and Kakaopay Insurance were joint winners for the Digital Insurer of the Year Award. Reinsurance Group of America (RGA) won the Life Reinsurer of the Year Award, due to its commitment to providing bespoke solutions for its clients’ unique challenges. WTW took the Broker of the Year Award, a result of its innovative solutions and its constant push to elevate and support the industry in its transition efforts. Nan Shan Life Insurance was the Life Insurance Company of the Year, winning the award due to its focus on sustainability, transformation and ability to serve its customers’ changing needs over several decades. The Woman Lead of the Year Award went to Dr Sandar Oo from Myanma Insurance, known for her innovative approach to leadership, and her constant efforts to push creativity and improvement within her team. Closing out the evening, Mr Mark O’Dell from the Life Insurance Association of Malaysia was given the Lifetime Achievement Award, to celebrate his dedication to and persistence in the industry and to recognise his 44 years in the field. Roll of Honour 2024 Life Insurance Company of the Year Nan Shan Life Insurance Company General Insurance Company of the Year (Joint Winners) ERGO Insurance (Thailand) Public Company Limited Go Digit General Insurance Limited Health Insurance Company of the Year AIA Singapore Digital Insurer of the Year (Joint Winners) FWD Singapore Pte Ltd Kakaopay Insurance Educational Service Provider of the Year Association of Indonesian Qualified Insurance and Reinsurance Brokers (APARI) Life Reinsurer of the Year Reinsurance Group of America, Inc (RGA) General Reinsurer of the Year (Joint Winners) Everest Reinsurance Company Munich Re Broker of the Year WTW Sustainability Award Cathay Life Insurance InsurTech of the Year discovermarket Asia Pte Ltd Technology Initiative of the Year discovermarket Asia Pte Ltd AI Initiative of the Year Taiwan Life Insurance Co., Ltd Service Provider of the Year APRIL International Corporate Risk Manager of the Year Ms Suchitra Narayanan, Revantage APAC Young Leader of the Year Mr Hicham Raissi, Allianz Insurance Singapore Pte. Ltd. Woman Leader of the Year Dr Sandar Oo, Myanma Insurance Lifetime Achievement Award Mr Mark O’Dell, Life Insurance Association of Malaysia Source: asiainsurancereview.com

The insurance industry in Singapore is in a prime position to reshape how graduates perceive career opportunities within the sector, according to new research commissioned by Canopius Group (Canopius), an international specialty and P&C (re)insurer. As industries across the board compete for top talent, the report "Listening to Tomorrow’s Leaders: Attracting and retaining young talent in insurance", explores the career aspirations and motivations of recent university graduates in Singapore. Focusing on the professional services sector including industries such as banking, finance, consulting, and insurance, the survey examines factors influencing career choices, such as financial incentives, job stability, opportunities for growth, and work-life balance. The research reveals that while insurance offers many of the career priorities graduates value, there is a clear opportunity to communicate these strengths more effectively to the next generation of professionals. Tangible benefits drive career choice for new graduates According to the survey, graduates in Singapore prioritise tangible benefits when it comes to choosing their field of work. Salary & benefits are by far the most important factor influencing career choice (31%), with job stability coming in second place (17%), but only being about half as important. Other factors such as work-life balance / flexible working arrangements (13%), sector or company culture (8%) or travel opportunities (7%) only drive a small proportion of career choices for new graduates. The research also revealed that graduates place significant value on professional growth, with 92% highlighting the importance of formal internal training, and 91% emphasising the need for professional development opportunities. This is followed by a company’s reputation (89%), mentorship programmes and on-the-job learning, which are all equally valued (88%). Misconceptions about the insurance industry While salary, job stability, and career advancement are areas in which the insurance sector excels, misconceptions about the industry still hold it back from fully competing for talent with other seemingly more attractive sectors, such as finance and consulting. When asked if they saw an attractive career path in insurance, over half of respondents (56%) said yes while 28% did not see it as appealing. Among those who do not view insurance as an attractive career option, the top reasons include limited career growth opportunities (70%), lack of information about the industry (48%), and perception of the industry being boring or unexciting (36%). To have a more holistic understanding of their perceptions, the survey also asked respondents to rate how they would associate certain attributes with jobs in the finance, consulting, and insurance sectors. Insurance is associated with job stability and work-life balance at 72% and 71% respectively, which is only slightly behind finance (77% and 75%) and consulting (74% and 77%), underscoring an opportunity to raise awareness about the main benefits of working in the industry. Moving the needle When asked what insurance companies can do to make a career in the industry more appealing, the top suggestions are to provide higher starting salaries and more benefits (51%) as well as more work-life balance initiatives (44%). Commenting on the findings, Soon Keen Lee, CEO, APAC and MENA, Canopius Group, said, “From our research, it is encouraging to see that what young graduates seek is in line with what the insurance industry is already offering. Instead of reinventing the wheel, our focus should be on improving how we communicate job progression, compensation packages, and the positive work environment that a career in insurance can offer. By working together as an industry and addressing these priorities, we can reposition the industry as a desirable path for the next generation.” The findings of the survey were based on information gathered through a total of 154 interviews conducted online in August 2024 in Singapore. Respondents are recent graduates, between ages 21 and 35, across various fields of study including business and commerce, accountancy, economics, computer science, and mathematics. Canopius underwrites insurance products on several platforms to offer a wide range of specialty solutions. Its offices are located in Australia, Bermuda, Singapore, the UK and the US. Canopius underwrites through Lloyd’s Syndicate 4444 (managed by Canopius Managing Agents), a US surplus lines insurer, Canopius US Insurance, and Canopius Reinsurance, a Bermuda-based Class 4 Reinsurer. Source: asiainsurancereview.com

The 14th ASEAN Insurance Congress is scheduled to take place on 25th November 2024 at The Empire Brunei, Bandar Seri Begawan, Brunei Darussalam. This esteemed event will bring together key stakeholders from across the industry to tackle these pressing issues head-on. With the support of regulators, we will explore strategies to foster a sustainable future in insurance, aligning with the ASEAN Community Vision 2045. This vision calls for the ASEAN insurance sector to be forward-looking, action-oriented, and adaptable to change. This year's Congress is themed "Navigating Disruptions Towards a Sustainable ASEAN Insurance Industry" and will be organized under the auspices of the ASEAN Insurance Council. The Congress serves as a premier platform for insurance leaders from across ASEAN to meet biennially, share industry updates, and discuss the latest trends and developments, market performance, and key issues impacting the growth of the ASEAN insurance industry. This year, the Congress will focus on current and relevant issues from both international and local perspectives. We will host high-level speakers who will provide valuable insights and perspectives to our delegates. As ASEAN remains one of the most dynamic insurance markets globally, fuelled by a large and rapidly growing population eager to embrace new insurance products and services in the post-COVID era, this Congress offers a unique opportunity for sponsors to engage with key stakeholders and contribute to shaping the future of the industry. Delegates will have the opportunity to meet key industry leaders who are the Heads of Regulators, Presidents of Associations, CXOs/CEOs, Board members, industry professionals and others within the insurance ecosystem. Join us in Brunei Darussalam as we navigate the complexities of today's world and strive towards a more resilient and forward-thinking insurance industry. Together, we will shape the future of insurance in ASEAN. For more information on sponsorship packages, please contact AITRI Secretariat at: AITRI Secretariat,  aitrisecretariat@aiiasia.org    Nadirah Dhaniah +603 2712 8808,  nadirah.dhaniah@aiiasia.org   Lydia Teh +603 2712 8807,  lydia@aiiasia.org ​

The Miravite Consulting Group, in partnership with PIRA, returns with their highly anticipated IFRS17 series. As we approach the first IFRS17 QIA regulatory deadline on Sept. 30, 2024, the Miravite Group provided the attendees with fresh insights on how to manage these changes. The trick is to focus on the New Names and New Faces in the Balance Sheet as per RS-2024-13. The Lunch Forum also touched on Taxation, Statutory reporting, and the Dual Ledger Platform. Thank you once again to the MIRAVITE Consulting Group.

By Michael F. Rellosa The relationship between insurance regulators and the insurance industry association is a complex one, sometimes marked by tension and disagreement. However, there is growing recognition of the potential benefits of collaboration, particularly in the area of premium ratemaking. This paper explores the wisdom of such a collaborative approach, highlighting the advantages it can offer to both regulators and the industry, as well as the potential challenges and strategies for successful implementation. The primary rationale for a collaborative premium ratemaking effort lies in the mutual benefits it can provide to both regulators and the insurance industry. For regulators, collaboration can enhance their understanding of the industry's operations, financial condition and risk exposures. This knowledge can inform more effective oversight and policymaking, ensuring that insurance markets remain competitive and consumer-friendly. Additionally, collaboration can help regulators identify potential systemic risks and take proactive measures to mitigate them. For the insurance industry, collaboration can offer several advantages. First, it can provide a platform for the industry to articulate its concerns and perspectives on regulatory matters. This can help to prevent misunderstandings and build trust between regulators and industry representatives. Second, collaboration can lead to more predictable and consistent regulatory outcomes, which can reduce uncertainty and facilitate long-term planning. Finally, collaboration can help to ensure that regulatory requirements are reasonable and achievable, avoiding excessive burdens on the industry. There are positive signs that this is happening in the Philippine setting. The Insurance Commission (IC) welcomes dialogue with the Philippine Insurers and Reinsurers Association (PIRA) and regularly consults with the industry on important issues, which PIRA views as a welcome opportunity to be heard and understood. Perhaps both sides can bring this further by creating a TWG that would likewise include other industry stakeholders, such as intermediaries. There are several key areas where regulators and the insurance industry can collaborate on premium ratemaking. These include: Data sharing: Regulators and the industry can share data on claims experience, underwriting practices, and other relevant factors that influence premium rates. This can help to improve the accuracy and transparency of rate-setting decisions. Risk modeling: Collaboration can be used to develop and refine risk models that are used to assess the likelihood and severity of insurance losses. These models can provide a more sophisticated basis for premium rate setting. Rate review processes: Regulators and the industry can work together to establish fair and efficient rate review processes. This can help to ensure that premium rates are adequate to cover the cost of insurance but not excessive. Consumer protection: Collaboration can be used to develop and implement consumer protection measures that are both effective and practical. This can help to safeguard the interests of policyholders and maintain public confidence in the insurance industry. While the potential benefits of collaborative premium ratemaking are significant, there are also potential challenges that must be addressed. These include: Confidentiality concerns: Regulators and the industry may have concerns about sharing sensitive data that could be used competitively. To address this, it is important to establish clear guidelines for data sharing and confidentiality. Regulatory independence: There is a risk that collaboration could compromise the independence of regulators. To avoid this, it is important to maintain a clear separation between the regulatory and industry functions. Differing interests: Regulators and the industry may have different priorities and objectives. To overcome this, it is important to establish a collaborative culture that is based on mutual respect and understanding. To overcome these challenges and ensure the success of a collaborative premium ratemaking effort, it is important to adopt the following strategies: Open communication: Regular and open communication between regulators and industry representatives is essential for building trust and understanding. Transparency: The collaborative process should be transparent and accessible to the public. This can help to build public confidence in the regulatory system. Accountability: Regulators and industry representatives should be held accountable for their actions and decisions. This can help to ensure that the collaborative process is fair and effective. The wisdom of a collaborative premium ratemaking effort between insurance regulators and the insurance industry association is undeniable. By working together, regulators and the industry can improve the efficiency and effectiveness of the rate-setting process, enhance consumer protection, and promote a more stable and resilient insurance market. While there are challenges to be overcome, the potential benefits of collaboration far outweigh the risks. By adopting a collaborative approach, regulators and the industry can create a more positive and productive relationship that benefits all stakeholders. Source: manilatimes.net

On EAIC Insurance Day, which falls every year on 18 October, the general secretary of the East Asian Insurance Congress (EAIC) , Mr Masayuki Tanaka has sounded the need to raise awareness of bio-diversity loss in Asia. In his message on this day, Mr Tanaka said, “To achieve a sustainable future, it is urgent to raise awareness on the global environment and bio-diversity loss in Asia, which accounts for about 50% of the world’s greenhouse gas emissions.” He pointed out that for the first time since EAIC began in 1962, the regional grouping had invited representatives of UN organisations to take part in panel discussions and speak at the EAIC Conference this year. The UN representatives were Mr Butch Bacani, head of Insurance at the United Nations Environment Programme (UNEP), who leads the Principles for Sustainable Insurance (PSI), and Dr Shinobu Yamaguchi of the United Nations University Institute for the Advanced Study of Sustainability (UNU-IAS). In this context, their presentations created an opportunity for the East Asian insurance industry to be briefed on the implications of environmental issues directly by UN agencies, said Mr Tanaka. The EAIC Conference this year — the 30th edition since 1962 — was held in Hong Kong from 24 to 27 September 2024. This conference gathered over 1,000 participants with a diverse background from 32 countries or regions in Asia, the US, Europe, the Middle East, and Africa. The EAIC has been held every two years since 1962, visiting cities such as Tokyo, Manila, Bangkok, Seoul, Taipei, Kuala Lumpur, Jakarta, Singapore, Macau, Bandar Seri Begawan, and Hong Kong. However, in-person conferences and face-to-face meetings were suspended in 2020 and 2022 because of the COVID-19 pandemic. This year’s conference was the first in-person conference since the pandemic. East Asian Insurance Day was established by the Executive Board of the 23rd EAIC (East Asian Insurance Congress) in 2006 to broadly promote insurance in East Asian countries. Since then, various enlightenment activities tailored to the circumstances of each city have been carried out. Efforts to improve insurance literacy have been made across Asian countries, including publicising insurance systems through mass media and holding lectures at universities. Japan has also contributed by providing comments to domestic and international industry papers and disseminating information about EAIC through the Life Insurance Association of Japan’s website. Mr Tanaka said, “This experience during the Hong Kong conference made me realise the significant role that EAIC has played in promoting networking and mutual understanding for over 60 years by bringing together numerous individuals from the insurance industry, primarily from East Asia, amidst close cooperation between the public and private sectors. It also emphasises the importance of insurance in addressing emerging social issues such as climate change and cyber risks. “I sincerely hope that by taking advantage of the East Asia Insurance Day, insurance literacy in each country will deepen, contributing to the development of the entire Asian region. Additionally, I expect the Day to become a reminder of the role that insurance can play in resolving the social issues for all those engaged in the insurance industry in East Asia.” Tokyo will host the 2026 EAIC Conference. Source: asiainsurancereview.com

National Reinsurance Corporation's (Nat Re) strong business growth in non-property lines during 2023, mainly driven by the acquisition of foreign agriculture treaties, is viewed to support business diversification; however, effective underwriting risk management remains crucial, says AM Best. Nat Re’s operating performance is assessed as adequate, with a five-year average return-on-equity ratio of 3.6% (2019-2023). In 2023, net profit increased significantly compared to the prior year, primarily due to better underwriting performance and higher investment results. Underwriting performance improved in 2023, driven by a better expense ratio resulting from lower net acquisition costs and management expenses relative to earned premiums. However, the 2023 loss ratio was negatively impacted by outsized losses and reserve strengthening stemming from its non-life portfolio. Investment income, arising mainly from interest and dividend income, continues to contribute positively to operating earnings. Ratings affirmed AM Best  has affirmed the Financial Strength Rating of ‘B++’ (Good), the Long-Term Issuer Credit Rating of ‘bbb’ (Good), and the Philippines National Scale Rating (NSR) of 'aa+.PH'(Superior) of Nat Re. The outlook of these credit ratings is ‘Stable’. These ratings reflect Nat Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile, and appropriate enterprise risk management. Nat Re’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which remained at the strongest level at year-end 2023. Whilst remaining at the strongest level, the risk-adjusted capitalisation has declined due to significant premium growth in 2023. AM Best views the company’s investment portfolio as having moderate risk with the majority of assets allocated to fixed-income securities issued by the Philippines government. Nat Re’s balance sheet is sensitive to natural catastrophe exposure, although this risk is partially mitigated by its retrocession programme. Business profile AM Best views Nat Re’s business profile as neutral. The company is the only domestic reinsurer in the Philippines, benefiting from strong relationships with local cedants and access to business through mandatory local cessions. Nat Re is well-positioned for business opportunities emanating from local government initiatives and new service offerings, which include its engagement in the design and launch of underwriting facilities in the Philippine market, enabling it to write greater business volumes in excess of the level stipulated by the mandatory cessions. The company writes both non-life and life reinsurance and its underwriting portfolio is viewed to be moderately diversified by geography. Source: asiainsurancereview.com

Pricing in the APAC reinsurance market in 2024 is stable due to adequate capacity, reversing from the hard market conditions of 2023, which were characterised by price increases and tighter renewal terms, says Fitch Ratings. However, reinsurers’ increased appetite for taking on catastrophe risk, influenced by an orderly retrocession market, may lead to heightened risk-taking and a subsequent increase in exposure to potential losses. Fitch believes maintaining market share while prioritising rigorous risk selection and disciplined pricing is crucial for reinsurers to sustain profitability amid increasing competition and ongoing uncertainty from regulatory developments, climate change, and economic risk. Climate change Climate change presents a growing and substantial threat in APAC, given the region’s vulnerability to natural disasters. The increasing frequency and severity of extreme weather events are likely to amplify reinsurance claims, potentially disrupting the recent stability in pricing. Fitch believes reinsurers will maintain a cautious approach to natural catastrophe protection by setting strict limits and upholding prudent underwriting standards. Asian reinsurers’ capital has remained commensurate with their business profiles, based on the available statistics for selected reinsurers. The quality of shareholders’ equity is satisfactory and the equity level is increasing, supported by retained earnings. Source: asiainsurancereview.com

Hurricane Milton will push global industry insured losses thus far in 2024 to over $100bn, which is the fifth consecutive year losses have crossed this threshold, Fitch Ratings has forecast. This heightened level of catastrophe losses will likely limit any potential for rate declines in property catastrophe business in 2025 as (re)insurers maintain underwriting discipline, according to Fitch.The property market could see a hardening of premium rates, depending on the ultimate Milton losses and the amount of additional catastrophe losses for the remainder of 2024. However, the sizable property reinsurance price increases experienced in 2023 are unlikely given the more adequate current pricing environment. Hurricane Milton is not likely to affect credit for rated property & casualty (PC) insurers and global reinsurers given very strong capital levels, Fitch said. Milton could cause up to $50bn in insured losses for Florida property owners, pushing insurers' estimated losses in the state over $100bn in 2024 alone, Fitch said. The agency added, “We estimate Milton’s insured losses will range from $30bn-$50bn, the largest insured loss since Hurricane Ian (a strong Category 4) ravaged a similar path in 2022 and caused $60bn of losses. Milton will be a 4Q and 2024 earnings event for large rated insurers with Florida exposure. The insurance losses will hit reinsurance attachment points, shifting a meaningful amount of losses to the reinsurance market, particularly from the Florida specialist companies with lower retentions.” Fitch said that ultimate losses will also depend on demand surge, as Milton followed closely on the heels of Hurricane Helene, a Category 4 that devastated the southeastern US two weeks earlier. Higher demand and limited supply of labor and materials needed to adjust claims and repair/rebuild following multiple large-scale disasters can increase insured losses by 20% or more. Source: asiainsurancereview.com

Global reinsurers will feel the impact of Hurricane Milton, S&P Global Ratings (S&P) has said but it does not foresee Milton overstepping the sector's annual catastrophe budgets. In aggregate, S&P’s earnings assumptions for reinsurers should remain intact, the global credit rating agency said in a report dated 9 October. “While the scale of damage remains highly uncertain it could be substantial, potentially matching that of Hurricane Ian (a Category 4 hurricane) in 2022, which resulted in about $60bn of insured losses.” Aon’s view In its “Weekly CAT” report dated 11 October, Aon said that Milton made landfall on Siesta Key around 8:30 pm local time (00:30 UTC) late on 9 October as a Category 3 storm with maximum sustained winds of 205 kph. After crossing Siesta Key, Milton continued across central Florida early on 10 October. While the storm steadily weakened as it moved inland, heavy rainfall continued to fall over a large area. Despite increased wind shear and subsequent weakening, Milton still generated extensive damage in west-central Florida due to intense winds and flooding. Aon said, “Although Milton’s track south of Tampa Bay likely avoided a much larger catastrophe, total economic and insured losses from wind, surge, and flooding may still reach into the tens of billions USD, pending further updates.” Source: asiainsurancereview.com