Find out what MAS is doing to achieve this integration.
Speaking at the ASEAN Insurance Summit in Yogyakarta, Indonesia, Monetary Authority of Singapore Insurance Department Head Lee Keng Yi said Singapore envisages an integrated ASEAN insurance market. This integrated market is a liberalised market place which will facilitate a wider distribution of risks through cross border provision of solutions and open access to the individual domestic markets.
“This will result into safer and more cost-effective provision of insurance which will help plot critical capacity gaps in the respective ASEAN jurisdictions,” she said.
She said eight ASEAN members including Singapore have already committed to liberalise cross border supply of marine, aviation, and transit or MAT insurance to lower cost in businesses, thus protecting them from transportation costs. She said this would really help intra-ASEAN trade.
To further position the industry to play a bigger role in the ASEAN Economic Community, the next key step for us will be to liberalise the key insurance markets, starting with the catastrophe insurance.
The goal of the integration is to “help domestic insurers be able to provide solutions to the economies. The liberalisation of catastrophe insurance will also help reduce the burden on governments, corporates, and consumers. It will also strengthen ASEAN economies’ resilience to catastrophe losses. If we successfully integrate our markets for this, our capacity for providing coverage will increase,” Lee noted.
She then outlined what Singapore is specifically doing to achieve this integration. “Firstly in MAT insurance, we are currently making amendments to our regulations to effect our commitment under the 7th AFAS package, so once amendments come into force, ASEAN MAT insurers that are licensed in their respective jurisdictions can then apply to MAS to provide cross border MAT insurance,” she said.
For re-insurance, Lee noted that foreign license reinsurers who are looking to offer their products can already access the Singapore market, which can be done by supplying cross border products as authorised by the MAS. While reinsurers are looking to establish commercial presence in Singapore, they can only do so under our licensing whether they set up as a branch or a subsidiary.
Lee also mentioned that the MAS has supported the formation of a Natural Catastrophe Data and Analysis Exchange led by the NTU Institute of Catastrophe Risk Management. “This will aggregate data across the region to provide a database and is really a public-private partnership to bring together quality natural catastrophe data for the industry to be able to do better pricing,” Lee said.
In addition to these initiatives on the national level, Lee also said MAS participates in the ASEAN Insurance Regulators Meeting.
“We also have the ASEAN Insurance Training and Research Institute (AITRI) that will play critical role in capacity building for the regulators by providing training and education," Lee stressed.
“All these initiatives will help closer integration amongst ASEAN economies to implement consistent regulatory framework which will then provide the clarity for cross border ASEAN insurance operating in each other’s jurisdictions. This will increase certainty and reduce costs for ASEAN insurers."
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