Asia must innovate: Munich Re
Munich Re is observing growing
demand for new solutions and
services in Asia-Pacific, ranging
from capital management optimisation
to new product development, Hermann
Pohlchristoph, member of the board of
management of Munich Re, told SIRC Today.
“The challenge for the reinsurance
industry will be to become more dynamic
in understanding and pricing the fastevolving
risk landscape across Asia-Pacific,”
At the heart of these new trends lies
technology, he noted. In Asia-Pacific, the
penetration of cyber insurance is still relatively
lower than in the rest of the world, where it
currently sits at around 5 percent, he explained.
With devices and applications becoming more
interconnected, widely reported cyber attacks
and the enforcement of regulations relating
to cybersecurity are leading to an increased
awareness and demand for cyber insurance
solutions in the region, Pohlchristoph said.
This is particularly true for smaller companies,
in terms of financial loss protection as well as
post-incident services that help them to resume
business operations quickly, he noted.
The region’s fundamentals of sustained
economic growth, intensifying infrastructure
and relatively low insurance penetration are
growth drivers for the re/insurance industry,
In India, the opportunities for growth are
significant across various lines of business,
including personal line solutions in health,
home and auto, as well the significant capacity
requirements in the agricultural sector.
With its enormous growth potential and
increasing affluence, the Chinese market is still
dominated by motor business, but industry
efforts to build more liability business are
gaining traction, Pohlchristoph said.
“We are still seeing an influx of new
reinsurers into the market, and major
innovative disruption is coming from the
distribution channel side through digital
players,” he noted.
In south-east Asia, Munich Re sees market
dynamics such as high fragmentation, a
steady move towards consolidation and
rising middle classes that are supporting a
narrowing of the protection gap.
“We have started to strengthen our
regional footprint through our centre in
Singapore over a year ago to ensure greater
proximity to clients and to provide the highquality
knowhow and services to our clients
across south-east Asia,” Pohlchristoph said.
Munich Re also sees potential in unleashing
the power of data analytics and artificial
intelligence (AI) to enable more tailored solutions
for the insurance industry. Globally, Munich Re
is actively making use of these technologies by
developing new digital products, services and
distribution channels, such as new underwriting
algorithms or platforms that enable more
efficient AI-based claims management.
“We are building out this capability in
Singapore to serve the region,” Pohlchristoph
MGA launched at SIRC targets cyber growth in Asia
Cyber insurance penetration is low in
Asia, but there is great opportunity
to introduce cyber products at a
local level and build them out from there,
Jonathan Ranger, chief executive officer of
Criterion Underwriting, told SIRC Today.
Criterion is part of a wave of managing general
agents (MGAs) sweeping the Singaporean
market, and has opened for business during this
year’s SIRC meeting. Ranger explained that the
MGA model had been adopted in Singapore
based on the idea it can offer a broad line of
products to market segments not as well served
by the established insurance industry.
“We don’t have the same cost burden as
some of the larger players,” said Ranger.
The MGA is exploring a few niche areas,
but is starting out with personal cyber lines,
which will grow into cyber for small and
medium-sized enterprises (SMEs).
In July 2018, hackers stole the personal
data belonging to around 1.5 million people
in Singapore—more than one quarter of the
population. Nine in 10 Singaporeans fear that
their personal data is not secure, according to
a study by WE Communications.
Against this backdrop, there is a rising
public awareness of cyber threats, and
concurrently a demand for products that
mitigate the potential financial losses of
businesses and individuals, said Ranger.
“The perception in Singapore is that
it’s a low crime environment and that the
government will take care of Singaporeans’
security. It is strong, but there is a limit to
what they can do. When you are online, you’re
not in Singapore any more,” he explained.
The personal cyber insurance is designed
to protect individuals against cyber-related
events including cyber fraud, cyber extortion,
malware attacks and identity theft. For
corporates and SMEs, Criterion covers first
and third party protections against costs and
liabilities including restoration costs, business
income loss, cyber extortion payments,
regulatory fines and other legal liabilities.
While the initial startup is focused on
Singapore, Ranger said there are plans to
expand its platform into wider Asia where it
would operate more like reinsurance. l
SIRC Today Day 2 Wednesday October 31 2018