A new resilience partnership has been struck up between Singapore’s regulator, the UK government and Lloyd’s of London, to work together on building catastrophe insurance resilience in Asia.
Insurance is essential to “safeguard economic success”, the UK Prime Minister David Cameron said today.
Cameron was heralding a tripartite statement of intent (SOI) he signed in Singapore, alongside Lloyd’s and the MAS, to work together to promote resilience to natural catastrophes in Asia.
The signatories have committed to a series of initiatives to aid the understanding of risk exposures in Asia and support and nurture insurance markets across the region, noted Lloyd’s in its press release.
Asia is the world's most natural catastrophe-prone region, said Lloyd’s. However, on average, less than 5% of likely economic losses are insured when disaster strikes, wiping out sustainable economic progress.
The three parties committed to working together to share knowledge and expertise with partners across the region, noted Lloyd’s, to identify threats facing regional economies and support the development of new risk transfer solutions.
The statement held out an invitation to other insurance sector firms to join the commitment and sign the SOI.
“As a world leading insurance provider, Lloyd’s plays an important role in protecting millions of people in the region from the financial losses of natural disasters,” said Cameron.
“The agreement with Singapore will put Lloyd’s at the forefront of the Asian insurance market and shows how governments can work together with industry to provide a vital product. Lloyd’s ensures countries across Asia are protected which helps to safeguard their economic success,” he added.
“There is no doubting the value of open insurance and reinsurance markets. They diversify risk globally, underpin all aspects of economic growth and ensure that countries hit by catastrophes can rapidly recover,” said John Nelson, chairman of Lloyd’s.
“Lloyd’s has developed our largest concentration of underwriting and risk management expertise outside of London here in Singapore and we want to use that to support the development of insurance markets across Asia,” said Nelson.
Fellow signatory Ravi Menon, managing director of the MAS, said: “Asia is especially vulnerable to the threat of natural disasters. The human and economic costs of these disasters are large and increasing while the proportion of these risks that is insured is worryingly small.
“The Monetary Authority of Singapore is committed to partner insurers operating in Asia to better understand these risks, develop effective insurance solutions, and facilitate cross-border access to specialist insurance services, so as to strengthen Asia’s resilience to large natural catastrophes,” added Menon.