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EAIC Today Day Three 2016

News FRIDAY 14.10.16 Innovation and talent key in Asian market As companies grapple with new and emerging complex risks including cyber, terrorism and D&O, this also presents an opportunity for insurers if they can innovate to address clients’ needs, Chin Feng, Hong Kong & Greater China CEO for Allianz, told EAIC Today. “That means investing in risk consulting for clients to help them understand their exposures better, while mitigating the risk on their portfolio,” he said. “In order to do that, companies like us are investing in innovation, hiring the right talent and expertise and investing in the right tools to help underwrite the risks, and to provide guidance to our clients on these new emerging risks. Basically you need to invest in your client as the end game—it’s customer-centricity.” Cyber insurance, product recall and crisis management are all areas of growing opportunity that Allianz is addressing, as well as working closely with its sister company on terrorism and political risk insurance policies. Trade credit insurance to help customers in the current tougher economic environment is another area of focus. “We also have a very comprehensive international insurance solution policy,” said Feng. “By being able to issue the policies and service the claims via our global network, we can provide solutions for companies with overseas interests.” In terms of geographical growth opportunities for insurers, Feng sees Hong Kong and Greater China as high on the radar, and increasingly intertwined in terms of business relationships. “They are going to be so interconnected in the future, and they complement each other because China has the ability to tap funds for overseas expansion—such as the One Belt, One Road initiative. On the other hand, Hong Kong has a more fluid legal system and a lot of the professional services, accountants and lawyers that can help our China offices service these risks.” Feng also notes China’s infrastructure growth as an area of opportunity, along with Myanmar, where Allianz has just opened an office, encouraged by a more transparent system that is making it easier for foreign companies to expand there. Vietnam is another area of interest, especially in terms of infrastructure development. Allianz will also be applying for a Beijing licence in the coming year, he added. Looking to the future, he anticipates that an environment of stagnation—caused by low pricing, excess capacity and consolidation— has created the necessity for companies to have a stronger balance sheet to withstand the current headwinds. “We have to be able to add a value proposition to the market—we need to differentiate ourselves with value-added services to offset the price wars,” he added. “The challenge is, how do we win and retain clients and remain profitable in a tougher operating environment? “We are in a strong positon with our capital strength and solvency and our innovation to dive into new areas; that is hopefully going to help us through the tough windstorms ahead.” n Chin Feng Demand for advisory services driven by Solvency II Strategic advisory services are coming into their own in Asia: ratings, Solvency II and regulatory issues are all big topics in the region, David Flandro, global head of analytics at JLT Re told EAIC Today. A big concern of some of JLT Re’s clients, particularly in the developing regions, is the rigorous and optimal quantification of risk. “There are still companies which underwrite and buy reinsurance without detailed modelling, so some of those companies are getting a bit concerned. They’re saying ok, we’ve got more risk exposure now; what happens if there’s a Chinese typhoon, how do we quantify that?” said Flandro. “We can bring some of those technologies to bear—even catastrophe modelling technology is relatively new to some companies.” Flandro said Asian clients are very anxious to implement new technologies, including the best and most up-to-date economic capital modelling, the most comprehensive cat and flood models and the right kind of cover pursuant to that modelling. “This enables our clients to grow in the right way, and that’s a big part of what we will be talking about at EAIC.” Another concern in Asia is the ability to expand, said Flandro. Regional players in Asia have regional concentrations, so there is a desire to expand internationally. In order to do so, carriers often need a rating, they may need Solvency II equivalence or capital backing—and those are all areas in which JLT Re is very active. “Of course, reinsurance can also help—it’s a form of capital so it can enable companies to expand internationally if they have the rating and the commercial reputation. If you are a medium-sized Asian company in a developing economy, international expansion is often a priority.” He sees a whole spectrum of opportunities in Asia springing from issues such as new technology, low insurance penetration and regulatory changes. “In India some of the regulatory restrictions on foreign ownership of insurance companies have changed recently, which is enabling certain large, global players to enter in more significant ways than they were able to a couple of years ago,” he noted. n David Flandro 16 | EAIC TODAY | DAY 3: Friday October 14 2016 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com


EAIC Today Day Three 2016
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