Ms Indranee Rajah, Minister in the Prime Minister's Office and Second Minister for Finance and Education, delivered the keynote address at the 16th Singapore International Reinsurance Conference (SIRC).
On Global-Asia Insurance Partnership (GAIP): Reigniting the Spirit of Cooperation and Collaboration, she said Asia is facing persistent and structural protection gaps which are impacting the region economically, financially, and socially:
- The life and mortality risk protection gap is estimated at US$40 trillion.*
- The health protection gap is estimated at US$1.8 trillion, and is estimated to hit USD$146 trillion by 2030.*
- The retirement income gap of just India, China, and Japan alone is estimated at well above US$25 trillion.**
These are only some protection gaps confronting a rapidly growing and changing Asia, and they will only evolve and grow over time.
MAS is working closely with the insurance industry, regional regulators, and academia on the Global-Asia Insurance Partnership, or GAIP, as a strategic response to deal with the structural and emerging risks that Asia faces.
With Nanyang Technological University as its academic and talent partner, GAIP aims to be the leading global centre of excellence in insurance and risk management in Asia, for Asia, by Asia.
GAIP will produce actionable research, data, insights, and policy recommendations that will empower the insurance industry and regional policymakers to address both existing and new protection gaps in the region.
In the longer term, this will help increase the level of penetration of insurance-based and risk financing solutions in Asia, in line with the developed markets.
GAIP has garnered strong support from the global insurance industry. AIA, AIG, Aon, Allianz, Great Eastern Life, Prudential, SCOR, Swiss Re, and WillisTowersWatson have committed to be Anchor Partners, and MSIG, Nippon Life, and NTUC Income have come on board as Supporting Partners. In addition, eight regulators, as well as the Access to Insurance Initiative, have come on board as Affiliate Partners.
The line-up of partners is a strong testament to the collective will to collaborate and work across boundaries to address the massive protection gaps in Asia.
Against the tide of retreating multilateralism, GAIP can be a role model for demonstrating the strength of cooperation.
Opportunities reveal themselves to those who seek them
Concluding her speech, she said that these are indeed challenging times for the global economy and Asia’s promising growth prospects.
Climate risks and political uncertainty are the epitome of present-day risks – global, complex, and ever-evolving.
The insurance industry, by combining its risk financing capacity, with its risk mitigation capabilities, can play a huge role in managing these risks. But the road ahead will remain difficult, unless we work together.
The insurance industry has to work with other key actors, including policymakers, regulators, technology firms and academia, to overcome some of the systemic challenges in addressing these risks.
These challenges include a dearth of data in the region, a lack of uniform or inter-operable standards and definitions, and an insufficient base of research and development combining technical, actuarial, economic and social analysis and approaches.
Partnerships will be critical in addressing the significant protection gaps facing the region, to support sustained growth and economic development, and enhance Asia’s resilience.
“Opportunities reveal themselves to those who seek them. At a time when the global economy finds itself confronted by strong headwinds, I invite the insurance industry to work together to ride the winds of change and opportunities, so that we can emerge stronger,” she concluded.
Asia Advisers Network's sister publication Asia Insurance Review is the official media partner of the 16th SIRC with the theme "Winds of Change".
* “Mortality Protection Gap in Asia 2018”, Swiss Re, 2018.
** “Asians must wake up to the hidden costs of retirement”, Nikkei Asian Review, 2018.
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Read her full speech here.