Singapore:
Heng Swee Keat Deputy Prime Minister, Coordinating Minister for Economic Policies and Minister for Finance,Singapore, on Monday launched Global Asia Insurance Partnership (GAIP),a tripartite partnership between the global insurance industry, regulators and academia to create innovative solutions for the risks of region,.at the virtual inaugural of SIRC 2020 Re-Mind.
“Through GAIP, we aim to produce actionable research insights, develop policy recommendations, There are many structural protection gaps facing Asia, but pandemic risk and climate risk are two critical areas that demand our immediate and collective attention,.'' he said adding that GAIP is expected to commence work in January next year.
Yoshihiro Kawai, the former Secretary General of the International Association of Insurance Supervisors, as the inaugural chairman of GAIP.
GAIP will be a Living Lab to incubate new risk financing solutions for emerging risks in Asia, with a focus on riding the digital revolution and harnessing other new technologies.It will also be a Policy Think Tank supporting Asian insurance regulators and policy makers.In the course of working together,insurers and regulators can also learn from each other. Such partnerships can eventually lead to better legal and regulatory frameworks to facilitate the deployment of disaster risk financing solutions, he explained..
“We hope to expand insurance coverage for long-term needs such as infrastructure, promote the use of technology and data in insurance, and facilitate global dialogue on strategic industry issues.GAIP will have a strong emphasis on talent development. This will build a strong pipeline of insurers with new skills in areas such as big data and AI, and position the industry for the future as jobs are being reshaped by technology,'' he said..
As Asia grows, more lives, wealth and assets will be at stake. But with growing urbanisation and greater connectivity, the scale and complexity of risks have also grown. Yet, Asia remains under-insured, he observed,.
“For instance, since 1990, Asia has accounted for about half of the global economic losses from natural disasters. Yet in 2019, insured losses for catastrophes accounted for only 9 per cent of economic loss in Asia as compared to 24 per cent globally,'' he stated.
The large protection gap in Asia is partly due to the lack of quality data and robust risk models to quantify exposure to natural catastrophes, infectious diseases and other emerging risks. The other reason is that governments and companies under-appreciate these risks, explained.Swee Keat.
Harnessing data from the end-to-end digitalisation of supply chains, satellite imagery and social media will provide a more granular appreciation of economic and risk exposure, he added..
“With IoT, accurate and timely data feed and blockchain technology, risk events can be tracked in real time. Claim payouts can in fact be triggered automatically if pre-defined conditions – such as a flight delay or flooding – are triggered.The application of AI and big data will lead to more robust risk models and can also be applied ex-ante to mitigate risk and strengthen resilience,'' he observed…
The second shift, after digitilastion, is in the insurance landscape is to harness public-private partnerships.
The financing gap for large-scale systemic risks is big. This is due to highly correlated exposures across countries and industries, which would trigger claims from a large number of policyholders simultaneously. The ability of insurers to pool and diversify these exposures, while providing broad coverage at lower costs, is limited, he said.
To address large-scale systemic risks effectively, the public and private sectors must come together to develop meaningful, effective and scalable risk-sharing solutions, suggested the Singaporean Finance minister…