Swiss Re is upgrading its presence in Singapore significantly as the Swiss financial sector continues to grow business opportunities in the Asian region. Swiss Re is setting up its Asian regional HQ in Singapore in 2018 as it finds the country an attractive location to do business in the region.
The new entity, which will take the name Swiss Re Asia, will have its own regional board of directors, including business leaders who know Asia well and will be able to provide it with fresh perspectives, guidance and contacts. The management in the region will be directly accountable to this new regional board.
Once the new entity in Singapore is operational, Swiss Re is looking at generating an estimated US$6bn gross premiums in Singapore.
Founded in Zurich, Switzerland, in 1863, the Swiss Re Group has operations around the globe and is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. It has more than 14,000 employees worldwide. In 2016, Swiss Re delivered a full-year net income of US$3.6bn, supported by solid underwriting and a strong investment result.
Swiss Re has been in Asia since 1913 and has over 1,900 employees in the region, with offices in Beijing, Hong Kong, Kuala Lumpur, Mumbai, Tokyo, Seoul, Shanghai, Sydney, Singapore and Bangalore, where it operates a global business solutions centre.
As Singapore and Switzerland celebrate 50 years of bilateral relations this year, Swiss Re is looking to mark 50 years of its presence in Singapore next year. It has been in Singapore since 1968 when it first got a licence to open a representative office.
"Singapore provides us with a long-term regional position that will support the set-up and future operation of our new Asian regional HQ," says Jayne Plunkett, CEO, Reinsurance Asia and regional president, Asia, Swiss Re.
"The country is a global leading financial hub and offers a transparent regulatory environment. It also has a strong supply of highly qualified people, as well as a pro-business mind-set and reliable infrastructure for regional business."
The Asian insurance sector has seen strong growth over the past decade, with the region now accounting for 30 per cent of global insurance premiums, compared to 20 per cent a decade ago. Swiss Re expects the region's non-life and life premiums to grow by 5 cent and 6 per cent respectively, in real terms per annum over the next 10 years.
"We have been part of the Asia insurance growth and want to continue to grow in these markets by further investing and strengthening our commitment to this important region. Setting up our Asian regional HQ will bring us even closer to the market and to our clients. We will be able to provide better and faster service to our clients and partners in this region," says Ms Plunkett
The move also aligns Swiss Re's entity structure across Asia, Europe and Americas regions, so that there is a consistent approach throughout its reinsurance business.
The setting up of the new entity, Swiss Re Asia, is set to benefit the group as it will lead to business growth in the region.
"As one of the largest reinsurers in Asia today, we know it is important to continue to grow in these markets, to develop innovative solutions, and to build talented local teams. Setting up our new entity only makes each of these stronger and more relevant in the local markets," says Ms Plunkett.
"Firstly, our clients and brokers will get more from us. They will get our empowered local teams at their doorstep, delivering highly relevant solutions with deep insights and industry expertise, which with our clients, help to close the protection gaps across Asia.
"We will also have our own regional board of directors like in Americas and Europe, including business leaders who know Asia well, providing us and our clients and brokers with fresh perspectives, guidance and contacts. Our management in the region will be directly accountable to this new regional board.
"We currently operate through a network of branches and subsidiaries of Swiss Re Zurich. With the new set- up, we will have our own headquarters in Asia, which will hold a network of branches and subsidiaries across Asia. Swiss Re's leadership and board of directors believe our reinsurance business in Asia is now as strategically important as our businesses in the Americas and Europe. So it's time we managed Asia in the same way."
With the new entity set up in Singapore, Swiss Re will be one of Asia's largest reinsurers, and a leading pan-Asian reinsurer generating an estimate of US$6bn gross premiums in Singapore. This strengthens Singapore's position as a global financial centre and reinsurance hub in Asia as it will also enhance the attractiveness of Singapore as a financial hub to other industries in the future.
"We are looking at grooming Asian insurance talent into attractive specialist and leadership roles in an international environment. This will help to create jobs, transfer and development of skills to the Singapore workforce and insurance talent pool here," says Ms Plunkett.
She sees insurance as a growth industry in Asia. Over the past decade, total insurance premiums in Asia increased by an annual average of 4.6 per cent, after adjustment for inflation. This is significantly faster than the global average growth rate of 1.4 per cent. Growth has been driven by strong performance of emerging Asian markets, in particular China and India.
Emerging Asia collectively reported an annual average growth rate of almost 12 per cent over the last decade. Increasing risk awareness, a rising middle-income class, urbanisation and market liberalisation have all contributed, she adds.
Total premiums increased by an average real rate of 4.1 per cent in Singapore over the past 10 years. It has a sophisticated insurance market with the participation of both domestic and global insurance companies. Supported by the fast expansion of the primary insurance market, reinsurance business also reported robust growth.
Ms Plunkett says that despite the strong growth of insurance in Asia over the past year, insurance penetration remains low in many Asian countries. At the same time, there are still significant insurance protection gaps in terms of death benefits, medical expenses and property coverage. These all point to the significant pent-up demand in the region.
A number of factors will continue to support insurance growth. Many Asian emerging markets are planning further urbanisation to support economic growth. This will underpin demand for insurance in sectors like property, construction and motor.
"Fundamentally, Asia still has a vast infrastructure gap. A recent report by the Asia Development Bank suggests Asia will need US$1.7 trillion per year in infrastructure spending to close the gap. Many markets are already gearing up to spend on infrastructure, and the recent One-Belt One-Road initiative championed by China is another example. These various projects will generate significant commercial insurance opportunities for insurers in the region," says Ms Plunkett.
Furthermore, many Asian governments are trying to enlist the support of insurance to tackle health, pension and ageing problems. Simply adding more fiscal resources to provide better social security services is now deemed unsustainable. As a result, governments are more receptive to initiatives to encourage the take-up of insurance, including tax and other incentives. This is opening up more opportunities for insurers to participate in the provision of insurance to cater for societies' health and retirement needs, she adds.
Ms Plunkett says Swiss Re's strength lies in being a knowledge leader, understanding generations and societies that are constantly growing and evolving in this region.
"For more than 150 years, Swiss Re has been working towards making the world more resilient. This means that we protect our customers against difficulties and hardships that life inevitability brings. For instance, here in Asia, the region is highly prone to natural disasters and yet most of this region is still grossly under-insured.
"Over the years, we have worked with other insurance companies and governments to help protect their customers and citizens against large natural and man-made disasters. We have made insurance pay out to help recovery, rebuild communities and infrastructure during the Japan earthquake and tsunami in 2011, the explosions that happened in Tianjin in 2015, and when typhoons and floods struck countries in the region such as China, India and the South-east Asia countries, or even when an earthquake happens in Indonesia," says Ms Plunkett.
In Singapore, Swiss Re has almost 280 employees from 24 different nationalities. "For many of us, this is one of the most vibrant and liveable cities in the world. And for our business, we will continue to be here - to grow with Singapore and the region, supporting the expansion and resilience of the economies in Asia," adds Ms Plunkett.