Round-up of the latest news and developments from the Asian insurance market with stories from AIG, Willis Towers Watson, Zurich and more.
AIG names Spaven as head of liabilities and financial lines
AIG has appointed Scott Spaven as head of liabilities and financial lines (LFL) for Singapore and Southeast Asia, effective from 1 December 2017.
Spaven, who is currently head of client & broker engagement (CBE) for Singapore and Southeast Asia will be taking over from Roy Wilmoth II, who is taking on a new role as the head of multinational client servicing, North America.
In his new role, Spaven will be responsible for driving profitable growth across the LFL business, improving operational performance and creating industry-focused client solutions.
He will report to Ms Claudia Salem, CEO of AIG Singapore and head of Southeast Asia.
Spaven began his career as a property and casualty underwriter in the UK, before moving into broking where he spent over a decade focusing on the management of large and complex accounts, new business development as well as placement strategy and implementation.
In 2011, he relocated to Singapore with Willis Towers Watson and served as the head of business development and placement prior to joining joined AIG in 2013.
Willis Towers Watson appoints Yeung as head of property and casualty, North Asia
Willis Towers Watson (WTW) has named Evariste Yeung as head of property and casualty, North Asia.
Yeung will be based in Shanghai and report to Richard Collis, managing director for WTW’s insurance consulting and technology business in Asia Pacific.
In what is a newly created divisional role, he is responsible for growing the North Asia general insurance consulting practice. This involves developing new business opportunities and leading the team to deliver excellent results for clients, particularly across China, Hong Kong, Japan, Korea and Taiwan markets.
This North Asia role supplements the recent appointment of Mr David Maneval, leading property and casualty (P&C) for South-east Asia.
Yeung’s role also includes a regional remit to grow the general insurance mergers and acquisitions practice across Asia Pacific. With two decades of P&C insurance experience across Asia and the UK, his extensive expertise includes mergers and acquisitions, underwriting, actuarial, innovative product and pricing strategies, automation, advanced analytics, and claims. With these skills, along with deep business management and client relationship skills, he will help companies to innovate and employ forward-looking strategies to succeed beyond next generation market challenges.
Prior to joining WTW, Yeung served as Chief Underwriting Officer, consumer insurance, personal accident of AIG Japan Holdings. Before this he took on numerous key actuarial roles at AIG Asia Pacific, AXA Direct Japan, AXA UK, Aon Re Asia and Morgan Stanley Japan.
Zurich announces two property and energy appointments
Zurich has announced two new appointments to its property and energy divisions.
John McCully has been named as head of property, energy and technical risk for Asia Pacific and Alex Howell is hired as its new line of business head for downstream energy. Both roles will be based in Singapore.
McCully, who is currently the head of property and engineering for Zurich Australia’s general insurance business will take up the new role on 1 January 2018.
Howell joins Zurich from Swiss Re, where he most recently served as head of property for South-East Asia.
Reg Peacock, chief executive of Zurich in Singapore said: “Property and energy are growth sectors for us in Singapore and the region and we see more clients seeking deep technical expertise in these areas.”
These new appointments follow the announcement of Anish Jadav as CUO for Zurich’s commercial business announced last month.
Japanese insurers display innovativeness with health policies
Some Japanese insurers are offering insurance policies which will provide discounts on premiums or refunds to those who embrace a healthy lifestyle, for example walking 8,000 steps a day or eating healthy food.
With Japan’s growing ageing population, these types of insurance policies may help to reduce the medical and nursing care costs.
A member of the Dai-ichi Life Holdings group, Neo First Life Insurance, recently launched a new medical policy that pays lump-sum allowances when the insured is admitted to a hospital for such lifestyle-related diseases such as cancer and heart disease.
This product is unique as its premiums are determined in line with the insured’s “health age” which is calculated by the company, based on the results from a medical check-up, not the actual age of the insured, reported The Japan Times.
In order to calculate the “health age” of a prospective client, Neo First Life will use data on 1.6 million people stockpiled by the Japan Medical Data Centre, a private company that specialises in medical data analysis.
Those who are confirmed to be healthier than average for their age are then offered discounts on their premiums, said Neo First Life Insurance.
Another insurance product offered by Tokio Marine & Nichido Life Insurance will provide policyholders up to 10 percent refunds if they average over 8,000 steps a day for two years. The policies went on sale in Tokyo in August. Subscribers need to wear a monitoring device which is linked to the company via a smartphone app to measure their daily step count.
The product, developed jointly with major wireless internet provider NTT Docomo, is expected to be launched in other parts of Japan next month.
Separately, a policy developed by Sompo Holdings and Aiaru Syogakutankihoken Corp is designed to support the rehabilitation efforts of patients who require assistance with nursing care. The product was launched in September for residents at welfare facilities run by the Sompo Holdings group. To qualify, one must be recognised as needing daily assistance under the government’s nursing care insurance system. If their condition improves over a certain period, they will receive an allowance.
Allianz opens branch in Beijing
Global insurer Allianz has officially opened its branch office in Beijing, China which will bolster its presence spanning China and enhance its ability to serve more customers in the world's fastest growing insurance market.
With a full branch licence granted by the CIRC, Allianz is able to provide its suite of commercial and consumer property and casualty (P&C) solutions to customers in Beijing. This includes travel, personal accident, health and motor insurance, as well as liability, marine, construction, energy, financial lines and trade credit, the company said in a statement.
The Beijing branch will be Allianz China General Insurance’s (AZCN) third branch in the country after Guangdong and Shanghai and, together with its sale services office in Shenzhen, completes Allianz’s P&C coverage across China’s tier-one cities.
At the opening of the Beijing branch, Allianz’s regional CEO for Asia Pacific, Mr George Sartorel, said: “This is a milestone in Allianz’s continued growth in China. As China's political, economic and cultural centre, Beijing represents not only a great opportunity for us to serve the protection needs of more customers and enterprises in China, but also for Allianz to play a bigger role in some of the country’s key agendas, including the Jing-Jin-Ji (Beijing, Tianji and Hebei) integration plan and the One Belt One Road initiative.”
OCBC Bank becomes the first in health insurance distribution
OCBC Bank has become the first in Singapore to distribute health insurance via mobile and Internet banking.
This first-of-its-kind way of buying a health insurance plan in a few simple clicks makes access to essential health and illness coverage fast and frictionless, says OCBC in a statement.
Typically, health insurance plans such as; critical illness, disability, hospitalisation and surgical are not available via online sources as they require a health check-up to evaluate the applicant’s medical condition.
However, with Early Cancer Care, eligible OCBC Bank customers can make a health declaration with the click of a button. Early Cancer Care is the first health insurance product to be rolled out on OCBC Bank’s mobile and Internet banking channels, with more non-general insurance plans being added over time. Underwritten by Great Eastern, it is a cancer insurance plan that provides coverage in the event early or major cancer is detected.
Depending on which plan is purchased, upon diagnosis of major cancer, the insured will receive a cancer recovery benefit of up to SGD$3,000 (USD$2,206) monthly for six months, and a lump sum benefit of up to SGD$150,000, which can be used to cover treatment costs.
If early-stage cancer is detected first, the insured will receive 40 percent of the sum assured, cancer recovery benefit for six months, and all future premiums will be waived. The remaining 60 percent of the sum assured will be paid out if major cancer is diagnosed subsequently.
OCBC Bank says it keeps the purchasing process private and confidential in a secured environment. Once the customer has logged in via two-factor authentication, their personal information will be pre-populated on the insurance product application form, and they can make payment from their OCBC Bank accounts or credit cards.
Head of E-Business Singapore, Mr Aditya Gupta said: “This is a game changer. So far, our customers in Singapore have had to contend with general insurance products being available for purchase online. By offering our customers access to directly buy insurance solutions like Early Cancer Care via our digital channels, we have upped the ante in meeting their insurance needs simply, quickly and securely. It’s the start of what I call ‘democratisation of insurance’.“
Head of Bancassurance, Mr Jerry Ng said: “A majority of cancer plans are renewable yearly, with premiums increasing with age. Early Cancer Care provides cancer coverage for both early and major cancer detection, and the premiums do not increase with age throughout the policy term.”
Head of Bancassurance, Great Eastern Life Singapore, Mr Roy Tan added: “A key focus for us at Great Eastern is to harness advances in digital technology to better enable our channel partners such as OCBC to deliver our product solutions to customers more efficiently. We will continue to collaborate to create greater value and better experience for all our customers.”
Foreign parties to be allowed to own 100% of local insurers in China
The Chinese government has revealed that it will increase foreign ownership limits in insurance companies to 51 percent in three years' time.
Full foreign ownership of insurers in China will be allowed after five years.
Vice Finance Minister Zhu Guangyao made the announcement last Friday, a day after US President Donald Trump reiterated calls for better access to Chinese markets in meetings with Chinese President Xi Jinping.
Currently, foreign holdings in insurance ventures are capped at 50 percent in general, with the exceptions of AIA, Allianz and Manulife. AIA has a 100 percent-owned subsidiary with Allianz and Manulife both having a 51 percent stake in their joint ventures.
At present, there are 57 foreign insurance companies from 16 countries operating in China. For the first half of 2017, foreign owned insurance ventures in China had a 6 percent share of the life market and a 2 percent share of nonlife business. Foreign players have said that restrictions have hindered their growth in China.
Mr Wesley Cui, General Manager at the consultancy Willis Towers Watson in China, told the South China Morning Post that a majority stake or full control could attract new foreign investors to China’s rapidly growing life insurance sector.
He said: “For joint venture life insurers, there is a prevailing headache that derives from the 50:50 stake holding structure, as no party has the decisive say, leading to unnecessary infighting, waste of resources and which hinders the implementation of strategy and operation of a joint venture life insurer.”
Mr Zhu also said that the government will relax or eliminate ownership limits in the commercial banking, securities, futures, and asset management sectors.
The cap on foreign equity stakes in securities, fund management and futures companies will be raised to 51 percent from the current 49 percent. The ceiling will be removed entirely three years after the new limit takes effect.
Mr Zhu did not mention when the 51 percent cap would be implemented. The Chinese government will also scrap the 20 percent ceiling on ownership of a Chinese commercial bank or asset management company by a single foreign investor and the 25 percent cap on total foreign ownership of such companies.
Commenting on the announcement, Mr Ken Jarrett, President of American Chamber of Commerce in Shanghai, said: “Financial services further opening definitely has been high on our list.
“It’s a step in the right direction. We’ll have to see the detailed rules. In China, you always have to pay attention to the fine print to see how quickly it moves, but to finally ease up on the cap is something that is welcome.”
Peak Re receives licence from MAS
Peak Reinsurance Company has received authorisation as a life and general reinsurer by the Monetary Authority of Singapore (MAS) to carry on reinsurance business in Singapore, effective from 2 November 2017.
In a statement, CEO of Peak Re, Mr Franz-Josef Hahn, said: “Asia is our core region. Peak Re has already built a sizable presence in Asia’s mature reinsurance markets including Southeast Asia. Singapore is an important market in Asia and we continue to see attractive business opportunities to support our clients. This authorisation from Monetary Authority of Singapore will allow Peak Re to strengthen our business relationships in Singapore and deepen our client penetration.”
As a result of the authorisation granted, Peak Re looks forward to serving the Singapore reinsurance market with easier access and business process.
AI & machine learning bring benefits and risk to financial services: FSB
The Financial Stability Board (FSB) has highlighted the financial stability implications of the growing use of artificial intelligence (AI) and machine learning within the financial services, which could bring risks as well as benefits.
Financial institutions are increasingly using AI and machine learning in a variety of applications that span the financial system. These include; to assess credit quality, to price and market insurance contracts and to automate client interactions.
Institutions are optimising scarce capital with AI and machine learning techniques, as well as back-testing models and analysing the market impact of trading large positions, noted the FSB in a recent report.
Meanwhile, hedge funds and broker-dealers amongst other firms are using it to find signals for higher uncorrelated returns and to optimise trade execution. Both public and private sector institutions may use these technologies for regulatory compliance, surveillance, data quality assessment and fraud detection.
Specifically for insurance, the report noted that the industry is using machine learning to analyse complex data to lower costs and improve profitability. Adoption of AI and machine learning applications in InsurTech is particularly high in the US, UK, Germany and China.
Many applications involve improvements to the underwriting process, assisting agents in sorting through vast data sets that insurance companies have collected to identify cases that pose higher risk, potentially reducing claims and improving profitability. Some insurance companies are actively using machine learning to improve the pricing or marketing of insurance products by incorporating real-time, highly granular data for example online shopping behaviour or telemetrics (sensors in connected devices, such as car odometers).
AI and machine learning applications can substantially increase some insurance sector functions, such as underwriting and claims processing. Machine learning techniques can be used to determine repair costs and automatically categorise the severity of vehicle accident damage.
In addition, AI may help reduce claims processing times and operational costs. Insurance companies are also exploring how AI and machine learning and remote sensors (connected through the ‘internet of things’) can detect, and in some cases prevent, insurable incidents before they occur, such as chemical spills or car accidents.
The FSB’s analysis reveals a number of potential benefits and risks for financial stability that should be observed as the technology is adopted in the coming years and as more data becomes available.
- The more efficient processing of information, for example in credit decisions, financial markets, insurance contracts and customer interactions, may contribute to a more efficient financial system. The applications of AI and machine learning by regulators and supervisors can help improve regulatory compliance and increase supervisory effectiveness.
- Applications of AI and machine learning could result in new and unexpected forms of interconnectedness between financial markets and institutions, for instance based on the use by various institutions of previously unrelated data sources.
- Network effects and scalability of new technologies may in the future give rise to third-party dependencies. This could in turn lead to the emergence of new systemically important players that could fall outside the regulatory perimeter.
- The lack of interpretability or auditability of AI and machine learning methods could become a macro-level risk. Similarly, a widespread use of opaque models may result in unintended consequences.
- As with any new product or service, it will be important to assess uses of AI and machine learning in view of their risks, including adherence to relevant protocols on data privacy, conduct risks, and cybersecurity. Adequate testing and ‘training’ of tools with unbiased data and feedback mechanisms is important to ensure applications do what they are intended to do.
Starr remains committed to Singapore market
Starr Companies has reiterated its commitment to the Singapore market, despite deciding to stop underwriting new business through the Starr Singapore Underwriting Agents representing its Lloyds Syndicate 1919.
The company announced that Starr International Insurance Singapore (SIIS), which was founded in 2012, continues to operate in the country.
In a statement, the insurer said it remains hopeful on the prospects of expanding its business in Singapore through SIIS, which also serves as an important part of Starr’s Asia-Pacific insurance operations.
Currently, Starr’s Singapore-based team underwrites a variety of commercial risks including property, construction, power, engineering, marine and liability.