Round-up of the latest news and developments from the Asian insurance market with stories from XL Catlin, Pacific Life Re, AXA Re and more.
Willis Towers Watson appoints Taro Ogai as Head of Investments for Asia Pacific
Willis Towers Watson has announced the appointment of Mr Taro Ogai as Head of Investments for Asia Pacific, effective from 1st July 2017.
Mr Ogai will succeed Ms Naomi Denning, Managing Director and Head of the Asia Pacific Investment business, who will be leaving the company to relocate to Canada with her family.
Ms Jayne Bok has been appointed as Head of Investments for Asia and will be responsible for Willis Towers Watson’s Investment activities in Asia Pacific outside of Japan and Australia.
Chubb makes Jen Ong Independent Broking Manager for Singapore
Chubb have announced the appointment of Ms Jen Ong as Independent Broking Manager for Singapore.
Reporting to Mr Liam Burrell, Division Head of Porperty & Casualty (P&C) and Mr Koh Wei Lee, Division Head of Accident & Health (A&H) and Personal Business Insurance (PBI). Jen also reports in matrix to Mr Benjamin Carey, Head of Broking for Asia Pacific. In her new role, Ms Ong, will be responsible for spearheading and managing businesses via the Independent Broking network across all lines in Singapore. She will also lead business development efforts to deliver Chubb's value proposition of excellence in underwriting and service to independent brokers and their clients.
With more than 6 years industry experience, her most recent role was Senior Personal Lines Specialist for A&H and PBI, where she was primarily responsible for business development, securing affinity and intermediary partnerships to drive expansion plans for the business.
XL Catlin offers real estate environmental protection cover in Asia
As a result of owning or managing property, there are environment liabilities that may occur for property portfolio owners, Real Estate Investment Trusts (REITs) and property investors. As a solution to help with this, XL Catlin has launched its Real Estate Environmental Protection (REEP) in Asia Pacific. XL Catlin is the global brand used by XL Group’s insurance and reinsurance companies which provide property, casualty, professional and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises throughout the world.
The standard environmental coverage provided by the REEP policy gives investors coverage for historic and new pollution conditions, both sudden and accidental as well as gradual pollution. The solution provides an extensive range of coverage from statutory clean-up orders, restoration, legal defence costs through to third-party property damage, bodily injury and business interruption, the company said in a statement.
Also included in The REEP policy is a more enhanced coverage, tailored to suit specific requirements. This may include broad definition of named insured, first-party business interruption and extra expenses, fines and penalties (where legally permissible to do so), disaster expense costs, changes in legislation, as well as mold and microbial matter including legionella.
Mr Andrew Hookings, Regional Underwriting Manager, Environmental Liability for XL Catlin’s insurance business in Asia Pacific, said: “While the “Polluter Pays” principle tends to be enforced, property owners, real estate managers and developers may find themselves liable for issues they had little to do with or knew little about. Clean up and remediation can be highly disruptive, and may cost thousands or millions of dollars. This can be devastating to their businesses. The REEP policy seeks to provide clients with the broad coverage they need to protect their business.”
Ms Adias Gerbaud, Head of International Environmental Insurance, added: “Pollution incidents are a big concern in the Asia Pacific region today. Environmental exposures have been amplified by increasingly complex regulation, and a heightened awareness among the population who do not want to tolerate damage to the environment. We have seen the introduction of compulsory purchase of environmental insurance in South Korea, the increase in fines by 10 fold for New South Wales polluters and the chain of responsibility widening for polluters in Queensland in recent times. So it’s crucial for property owners and real estate managers to understand the exposures they face, have a comprehensive environmental risk management plan and the right insurance coverage in place to fence off unknown liabilities.”
Pacific Life Re sets up Shanghai rep office
Regulatory approval from the CIRC has been officially received by Pacific Life Re to establish its representative office in Shanghai, China, adding to the company’s network which has existing offices in Asia, Europe, Australia and North America.
Pacific Life Re works with clients in the UK, Ireland, Asia, Australia, and North America to manage their mortality, longevity, and morbidity risk. It is a wholly-owned subsidiary of Pacific Life Corp. The ultimate parent is Pacific Mutual Holding Company, a US-based mutual life insurance company founded in 1868.
"After successfully establishing a branch office in Seoul, South Korea, earlier last year, this move demonstrates our deepening commitment to the North Asia markets," said Alex King, Managing Director of Pacific Life Re Asia.
"With a representative office in Shanghai, we are embarking on the initial phase of learning about the needs of the market. Through robust market research and the insights gained, we will be in a better position to customise and bring fresh and innovative product ideas to the Chinese life insurance market."
Pacific Life Re CEO, Dave Howell, also commented: "China has an existing protection need that is bigger than any market in Asia, and I am confident in our ability to work closely with the insurers in China to increase sales of products that would meet the needs of local consumers."
With more than 17 years’ experience in the life insurance industry, undertaking both local and regional roles, Pacific Life Re has appointed Ms Vivian Wei as its China representative to support its goal of ultimately writing business in China.
Singapore and Australia enhance cybersecurity collaboration
A Memorandum of Understanding (MOU) has been signed by Singapore and Australia on strengthening cybersecurity cooperation.
The agreement was inked during the 2nd Singapore-Australia Leaders’ Summit held in Singapore and was signed by Mr David Koh, Chief Executive, Cyber Security Agency of Singapore (CSA), and Dr. Tobias Feakin, Ambassador for Cyber Affairs, Department of Foreign Affairs and Trade of Australia. The signing was witnessed by the prime ministers of both countries and the initial agreement will be valid for two years. This is the sixth bilateral MOU entered into by Singapore, following others signed with France, India, the Netherlands, UK, and the United States. The MOU covers cooperation in key areas including regular information exchanges on cybersecurity incidents and threats, sharing of best practices to promote innovation in the field, training in cybersecurity skillsets, joint cybersecurity exercises with a focus on the protection of critical information infrastructure as well as collaboration on regional cyber capacity building and confidence building measures.
Both Singapore and Australia have also committed to promote voluntary norms of responsible state behaviour in cyberspace. As a first step, both parties will organise an ASEAN cyber-risk reduction workshop at the end of 2017.
Cambodia’s insurance mart shows robust growth in 1Q
In the first quarter of 2017, the Insurance Association of Cambodia have said that Cambodia’s insurance industry reported total premiums of US$36.2 million, up nearly 24% over the same period last year. The Southeast Asian country has seven general insurers, that collected $21.6 million in gross premiums during January –March period, up 6.3% over the same period last year and six life insurers that posted gross premiums of $14.6 million, a surge of 63.5%.
Mr Huy Vatharo, Chairman of the Insurance Association of Cambodia, said that the growth in both life and general insurance was a good sign reflecting greater understanding among Cambodians of the idea of insurance and also reflected strong economic growth and investments.
China Govt requires 8 business sectors to have pollution liability insurance
China plans to make it compulsory for companies to have environmental pollution liability insurance if they fall under eight business categories. As a result of this, the Ministry of Environmental Protection and the CIRC have jointly released a proposed guideline on environmental pollution liability insurance, which is open for public feedback until July 10.
Within the guideline, eight categories of companies – including those engaged in the extraction of petroleum and natural gas; the gathering, storage, utilisation and disposal of hazardous wastes; and the production of active pharmaceutical ingredients – will be required to buy environmental pollution liability insurance, CCTV reported.
In addition, the new rule also clarifies what the insurance must cover, including personal injury, property damage and environmental impairments, as well as emergency treatment and clean-up costs. The guideline also requires insurance companies to issue an environmental risk assessment report before signing insurance contracts.
Insurers will be exempt from providing compensation in cases where damages are caused by natural disasters, environmental pollution crimes, illegal discharging of pollutants, or unaddressed environmental safety hazards, as well as other cases deemed worthy of exemption.
Those that fail to buy the insurance could face fines of up to CNY30,000 (US$4,400).
AXA Re moves closer to starting operations in India
AXA Re, a French reinsurer has received the second level of regulatory clearance (R2) from the IRDAI to set up the reinsurer’s first overseas branch in India. They are planning to finalise its capital infusion plans in one month to receive the final round of regulatory clearance (R3) and begin underwriting business in the country by July, reported Press Trust of India.
AXA Re will join eight other multinational players; Swiss Re, Munich Re, Hannover Re, Lloyd’s, XL Catlin, RGA, Gen Re and SCOR, for a pie in India's reinsurance market. They have already started operations or received approvals from IRDAI. The nine companies are expected to pump in close to INR5,000 crore (US$777 million) into their operations.
AXA Re already has India exposure through an offshore business that has an existing portfolio of US$100-150 million focused on life and health. “With a direct branch in the country, we will expand our portfolio into other general insurance segments of the country,” said an AXA Re official.
AXA already has a major presence in the Indian insurance industry in the form of two joint ventures with Bharti — Bharti Axa Life and Bharti Axa General Insurance.
MAS licenses first local life insurer in 47 years in Singapore
The Monetary Authority of Singapore has approved Singapore Life Pte Ltd as a fully licensed direct life insurer, making it the first local insurer to be licensed since 1970.
Singapore Life leverages the latest technologies, seeking to make the life insurance industry more efficient and accessible by empowering customers and creating a user-centric experience for all, the company says in a statement. The new insurer is born from the innovation, dependability and sophistication that defines Singapore as Asia’s favoured financial services centre.
In its Series A funding round in April, Singapore Life successfully raised US$50 million - the largest ever by a Singapore-based InsurTech company, with the support of renowned international shareholders – Credit China FinTech Holdings and IPGL. It has also partnered two of the world’s leading reinsurers – Munich Re and Pacific Life Re.
Mr Walter de Oude, CEO of Singapore Life, said: “The life insurance industry has not kept pace with the innovation seen in other industries and needs to be challenged to be better. People deserve a better partner for their life insurance needs – one who can reduce the complexities in the purchase journey, and offer efficient, transparent and flexible solutions. With our base in Asia’s most sophisticated, innovative and trusted financial services centre, Singapore Life aims to bridge this gap in the industry by leveraging FinTech solutions to empower people to take control of their financial future.”
Starting in the High Net Worth (HNW) customer segment, Singapore Life will provide attractive alternative HNW solutions to individuals who prefer Singapore as a destination for their wealth and protection.
The company will also soon offer life insurance solutions for all - that can be easily purchased both digitally and through financial advisers. Customers who are looking for term life insurance and critical illness solutions can register their interest at www.singlife.com for an exclusive early-bird offer.
Mr Ray Ferguson, Chairman of the Board of Singapore Life, said: “Singapore continues to demonstrate leadership in its ‘Smart Financial Centre’ vision and focus on innovation and technology. One of the outcomes of this dedication to revolution in the financial services sector, Singapore Life will positively contribute to the local insurance industry and encourage better insurance, while we keep pace with the digitally-immersed consumers who are also increasingly savvy buyers.”
Survey finds businesses are reactive to risk in Singapore
QBE Insurance’s “Risk of Regret “ report has indicated a number of Singapore companies only take action to address business liability risks after they experience an incident.
The “Risk of Regret” report is based on phone interviews and surveys with 300 SMEs and large corporations in Singapore from March-April 2017 with respondents equally split across six sectors: IT and telecoms, healthcare, financial services, manufacturing, construction and engineering and professional and business services. It also addresses both current and future business challenges and opportunities for SMEs and large corporates.
QBE’s research reveals that the tendency of companies to react afterwards is common across various types of risk.
Of the businesses that suffered a sensitive data breach, 61% took action afterwards. Meanwhile, 49% reacted after their business systems and computers were hacked. For those experiencing other problems, the post-event reaction was similar: public or third party liability issues (46% took action after); public or third party liability due to accidents or business negligence (45% reacted after); and customer or payment fraud (40%). One quarter of SMEs (23%) do not take any action, compared with 10% of large corporates. Surprisingly, several respondents said that they took no action even after an incident. For example, one quarter (23%) of Singapore companies which experienced customer or payment fraud over the Internet still took no action at all. Another 15% of respondents took no action even after public or third-party problems with their products or services.
“As a result, these companies are missing opportunities for obtaining compensation for the initial event, and potentially putting the stability and even the continuity of their business in jeopardy,” said Mr Karl Hamann, CEO of QBE Insurance Singapore.
Over the past 12 months, the most frequently encountered risks cited by businesses included: loss of income due to business interruption (24%); business systems and computers hacked (24%); equipment breakdown (23%); legal, regulatory or compliance issues (21%); staff injured while working (20%); and customer or payment fraud over the internet (10%).
“Given the risks and challenges, it’s also surprising that companies are not doing more to shield themselves through business liability and professional indemnity insurance,” said Mr Hamann. “In an increasingly litigious world, with professional liability high on the agenda, there is an obvious concern that Singapore’s companies need to be doing more to protect themselves and their customers.”
The report also reveals that nearly all Singapore respondents (96%) have some form of business insurance, including general accident and employee compensation cover. However, awareness and purchase of business liability insurance protection is far lower. Only 68% of Singapore respondents were aware of business liability cover and 57% had taken out such insurance.
Professional indemnity insurance fared even worse, standing at 34% awareness and 21% usage. Public and product liability insurance stands at 31% and 20% respectively, while the figures for director and officer liability insurance fall to 25% awareness and just 16% usage.
“Quite alarmingly, one in five respondents in Singapore said that having business liability insurance has never really crossed their minds,” noted Mr Hamann.
When asked why companies did not own business liability or indemnity insurance, a quarter of Singapore companies (26%) said their businesses were too small and the costs are bigger than the risks. Another one quarter of businesses (24%) cited budget issues, and a further 20% said they had other business priorities. One in five (20%) said insurance policies are too complex and 17% said believe their financial risk is reduced sufficiently because they are limited companies.
Hong Kong’s Peak Re receives Labuan reinsurance licence
Peak Reinsurance, a Hong Kong-based global top-50 reinsurer, has been granted approval-in-principle by the Labuan Financial Services Authority (Labuan FSA) to carry on general reinsurance business in and through the Labuan insurance market with effect from 23 May 2017.
Peak Re is backed by Fosun International and the International Finance Corporation, member of the World Bank Group, which have respectively invested 86.93% and 13.07% in the company. Peak Re offers reinsurance services covering a variety of lines across Asia Pacific, EMEA and the Americas, creating risk transfer and capital management solutions to best fit clients’ needs.
With the approval granted, Peak Re now enjoys better access to the Malaysian reinsurance market and will be able to provide an easier business process to Malaysian clients.
In a statement issued this week, Mr Franz-Josef Hahn, CEO of Peak Re, said: “As one of the world’s fastest growing areas of economic cooperation, ASEAN, and in particular Malaysia, plays an important role in Peak Re’s business strategy. Our in-depth market knowledge allows us to support our clients with our wide range of reinsurance offerings. This approval from Labuan FSA will strengthen our presence in Malaysia and demonstrates our commitment to our Malaysian and ASEAN clients.”
Peak Re will continue to operate as one single platform with underwriting activities centralised through Hong Kong head office.
AIG and Standard Chartered complete Blockchain pilot
AIG and Standard Chartered have successfully piloted the first multinational, “smart contract” based insurance policy using blockchain technology in partnership with IBM.
Blockchain is a type of distributed ledger or decentralized database that keeps records of digital transactions.
The pilot saw a multinational controlled master policy written in London and involving local policies in the US, Kenya and Singapore converted into a "smart contract" using the open-source Hyperledger Fabric protocol that was built by IBM, providing real-time shared views of documents and data.
AIG said that the blockchain solution creates a new level of trust and transparency in the underwriting process of complex multinational coverage, helping to reduce fraud and errors.
The pilot gave participants greater visibility of underwriting coverage and premium payments and also enabled them to be automatically notified about payment events. It also showed that third parties in the network, such as brokers, auditors and other stakeholders, could also be included, giving them a customized view of policy and payment data and documentation.
The aim of the test was to demonstrate the potential for blockchain to reduce friction and increase trust in one of the most complex areas of commercial insurance, multinational risk transfer.
“Our pilot proves blockchain has a powerful role to play in the future of insurance,” remarked AIG commercial CEO Rob Schimek.
“Any technology, including blockchain, that can increase trust and transparency for an industry whose pillars are built on that, should be fully explored,” he added.
Marie Wieck, general manager of IBM Blockchain said that there is a “tremendous opportunity” to transform the insurance industry through the application of advancing blockchain technology.
“By creatively leveraging smart contracts to help address tough regulatory requirements across different markets, we are seeing the enormous impact blockchain can have to improve efficiency and open up new business models,” she said.