Page 22 - WTW Asia Insurance Market Report
P. 22


“The insurance industry is one of the brightest stars in the constellation of
Singapore’s financial sector”

Singapore is recognised as the leading reinsurance            Despite a slow start, Cyber Insurance has gained greater
hub in Asia, housing regional hubs of 16 of the top 25        traction in 2016, and this growth in demand is expected
reinsurers in the world. The market has significant           to continue in 2017. Furthermore, more clients are
expertise in specialty insurance, namely marine, energy,      purchasing Terrorism coverage on the back of increasing
catastrophe, credit and political risks, and is the second    and ongoing global concerns. Expression of interest in
largest market for structured credit and political risk       the past is now manifesting into a purchase.
worldwide after London. The number of global and
regional positions in Singapore has grown, with most           grow at about 8%Insurance business in Asia is projected
underwriting decisions being made on the ground
instead of being referred back to headquarters. The             to
Singapore market is able to respond more quickly to             per annum. By 2020, Asia is likely to
clients’ needs. In line with the MAS’s vision, most Asian
risks, including entire large reinsurance programmes and       account for almost 40% of the
specialty risks, are being fully placed in Singapore.          global market.

“Singapore’s insurance industry                               Brokers and insurers alike have to revisit their value
                                                              proposition and the basis on which they are remunerated
is envisioned to become a global                              for the services that they provide to clients. The days
                                                              of brokerage and simple fee discussions are long gone;
marketplace by 2020, with the ability to                      they are having to re-evaluate how they evidence their
                                                              value to the customer and consider a broader suite of
accept not just regional, but global risks”                   additional services. Risk and Analytics is playing an
                                                              increasingly important role in helping clients quantify
As of end September 2016, the insurance industry              their losses accurately and provide them with the best
witnessed an 8% increase in total weighted new                suited product for their business needs.
business premiums compared to the same period last
year. Singapore also continues to be the destination of       Managing business costs in a period of falling revenues
choice for insurers and reinsurers looking to establish a     and globally occurring losses is challenging. However,
foothold in Asia thanks to a stable government, favourable    this has not seemed to affect premiums, which
taxes and the availability of well- qualified staff.          continue to fall despite significant losses and events.
                                                              Rates continue to decrease and the intensification of
Change and uncertainty abounds and there continues to         competition is squeezing margins of all parties involved.
be great competition for good people to support highly        Current pricing models are no longer sustainable.
ambitious, and expected, growth plans. Unless there is
a shift in capital investment away from insurance and         We are entering into a new era for global politics. While
back into equities, or there is a major natural catastrophe   it is not possible to project the likely effect of Brexit
impacting a financially critical part of the world, existing  and the US election result on the insurance industry,
market conditions are unlikely to change regardless           we predict that, for the foreseeable future, Singapore
of ongoing natural catastrophes and other attritional         will continue to be strong, stable and lead the Asian
losses. The expectation is that the current soft market       Insurance Market
conditions will continue throughout 2017 and beyond,
representing very much a “buyers’ market”. Significant
double digit rate reductions continue to be the norm.

“Forget the Insurance Cycle, it’s gone. The market is not changing, it has already changed”

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