SIRC 2021: Singapore finance minister backs ILSNovember 15 2021 by Karen Lai
The industry should prioritise climate change, support index-linked securities (ILS) and the cyber market, Lawrence Wong, Singapore’s minister for finance, told the Singapore International Reinsurance Conference (SIRC) 2021 on the opening day.
Wong (pictured), who is also deputy chairman of the Monetary Authority of Singapore, suggested that the market will need to work systematically with policymakers as they respond to climate change. (Re)insurers can support climate risk mitigation and adaptation measures and cutting greenhouse gas emissions and transiting to a low carbon economy.
He said that the (re)insurance industry is an important partner in deploying alternative risk financing solutions for managing climate change and ensuring better protection that matches the scale of coverage needed.
“Singapore will do our part to support the development of ILS in Asia Pacific, through a sound regulatory and legal regime, and a growing base and expertise of ILS service providers,” said Wong in the speech.
ILS, which includes catastrophe bonds, are an emerging type of disaster risk financing solution. These securities enable the reinsurance industry to transfer and raise additional financing from the capital markets.
He also encouraged the (re)insurance industry, as a large investor, to use its influence and voice to channel greater capital flows towards climate resilient and lower carbon assets.
As Covid-19 accelerates digitalisation business processes in Asia, Wong said cyber (re)insurance is an area where (re)insurers should work closely with the cyber security industry and policymakers.
“Singapore is doing our part to support efforts to develop the nascent cyber insurance market,” he said.
Wong said that collaborations could help the industry to better assess and quantify cyber risk, formulate risk insights in line with evolving digital technologies, in addition to creating more reasonably priced solutions with the right coverage for firms.
As InsuranceAsia News (IAN) has previously reported, the likelihood of cyber-attacks is disproportionately higher in Asia than in other regions. The region alone has accounted for over a quarter of global cyber-attacks so far this year.
Customers are responding positively to several key initiatives in the region.
Russell Higginbotham, Swiss Re's CEO Reinsurance Asia, discusses the impact of climate change for life and health (re)insurers in the region.