Magazine Table of Contents
Reinsurance in Asia
Reinsurance comes into sharp focus this month as the Singapore International Reinsurance Conference (SIRC) comes to town with the theme: New Partnerships in Reinsurance. With the event dubbed the Monte Carlo Rendez-vous of Asia, attracting nearly 1,000 delegates, our Cover Story provides a take on the Asian perspective of the reinsurance market.
With Asia being the one region in the world with the most growth opportunities, reinsurers and RI brokers have a collective duty to do more, not less, to nurture the potential of the region. Using innovative digital technology, be it for new products, better processes or more effective distribution is the order of the day. These were the clear messages from Asia Insurance Review’s annual reinsurance roundtable to take the pulse of reinsurance in Asia this year. The Roundtable of nine – five brokers and four reinsurers – was upbeat about taking the industry forward with an emphasis on relationships and partnerships rather than just transactions, with a view to closing the penetration gap and facilitating a digital-led transformation. There was also an emphasis on cost drivers and cost control, as well as using the very precepts of reinsurance, being the free flow of ideas and capital, to forge a better tomorrow for clients.
Hurricanes Harvey, Irma and Maria and the earthquake in Mexico have shown that the narrowing profit margins of non-CAT reinsurance lines are not sustainable. Mr Rene Lamer, Chief Executive, Singapore Branch of Sompo International, elaborates.
Mr Ken Lai of Generali Asia advises on the benefits of deep diving into the traditional reinsurance programme to optimise one’s capital efficiency.
What will it take to expand Asia’s nascent insurance-linked securities (ILS) market? It is a worthwhile goal, and necessary steps towards market maturity are being taken. Interested capital is plentiful, yet despite a 7% growth of third-party reinsurance capital world-wide in 2017 (compared to 2% for reinsurance capital overall, according to Aon Benfield), little ILS capacity is deployed in Asia. Mr Stephen J Moss of RMS gives an overview of the current ILS status in the region.
Several reinsurance companies have been formed in South Asia over the past four years with great expectations of garnering home-grown business, as well as business from the region. Within a short period into their operations, many have realised that the going was not as rosy as it looked, with a few still testing the waters and others waiting for regulatory changes to get their business in motion. We look at how these new reinsurers are doing and the road ahead for them in this highly competitive environment.