SINGAPORE: The pressing need for insurance protection in Southeast Asia can create business opportunities for insurers, said Trade and Industry Minister Lim Hng Kiang.
Speaking at the inaugural ASEAN Insurance Summit on Wednesday morning (Oct 1), Mr Lim – who is also the Deputy Chairman of the Monetary Authority of Singapore (MAS) – said there are three broad areas that should be prioritised for development and liberalisation: aritime, aviation and transport insurance; catastrophe insurance; and reinsurance.
Explaining the importance of these three sectors, Mr Lim said that the maritime, aviation and transport insurance protects against transportation-related risks, thereby safeguarding regional and international trade flows, while catastrophe insurance helps to strengthen the region’s financial resilience against the growing frequency and severity of natural disasters, he said.
As for reinsurance, Mr Lim said the diversification of risks across the region and better utilisation of available capital can help lower reinsurance premiums.
To aid in the development and liberalisation of the insurance markets, regulatory harmonisation needs to be looked at, the minister said. Greater consistency in regulatory frameworks within Southeast Asia will give market participants greater clarity and assurance on the provision of cross-border insurance services and give consumers more confidence in taking up insurance protection, he added.
As it is, ASEAN economies are under-insured, said Mr Lim. Citing industry data, he said the region’s 2013 insurance penetration rate was 3.4 per cent, about half of the global average of 6.3 per cent.
Mr Lim also gave an update on the ASEAN Economic Community 2015 blueprint at the conference. Substantial progress has been achieved and more than 82 per cent of the key deliverables set for completion by 2013 have been implemented, he said.