Overview
Insurers provide insurance coverage and risk financing solutions to protect communities, assets, and corporates from the physical impact of climate risks such as natural disasters. To strengthen the sector’s ability to support the risk financing needs in the region, we can enhance key enablers such as data and technology, and leverage alternative risk financing tools such as insurance-linked securities to deliver better solutions and protection.
One-third
of global natural disasters occurred in Asia Pacific
Over the past 30 years, about one-third of global natural disasters occurred in the Asia Pacific Region, with the region facing a record number of climate-related disasters in 2020.
US$50 billion
economic cost of catastrophes in Asia Pacific
Yet, there remains a significant protection gap in the region. In 2021 alone, the economic cost of catastrophes in the Asia Pacific region was US$50 billion, accounting for 18% of the global total. However, Asia is significantly underinsured at only 17% of the total economic cost compared to the global average of 57%.
MAS’ Initiatives
Insurance-Linked Securities Grant Scheme
MAS supports the development of the Insurance-linked securities (ILS) market in Singapore through enhancing the regulatory, tax and legal infrastructure, and incentivising ILS issuers to domicile their ILS in Singapore through the grant scheme. Insurance-linked securities is an alternative risk financing solution that allows risk carriers to transfer their peak portfolio risks to capital market investors, including natural catastrophes, thereby playing an important role in disaster risk management by providing additional insurance capacity.
Learn more information about the Insurance Linked Securities Grant Scheme.
Global-Asia Insurance Partnership (GAIP)
GAIP is a leading global Centre of Excellence in insurance and risk management, with a focus on Asia. It is a tripartite partnership between the global insurance industry, regulators and policymakers, and academia, to build long-term resilience and close the protection gap in Asia.
GAIP's work focuses on helping governments, regulators and the insurance industry better understand and address protection gaps, strengthen health and retirement resilience, and respond to the growing impact of climate change across Asia.
The GAIP consists of three pillars to drive significant synergies. The three pillars are as follows:
- Living Lab
- Provide a platform to collectively incubate innovative insurance solutions for key risks confronting the region (e.g. longevity, health, disaster resilience and climate-related risks), as well as new and emerging risks. The Living Lab seeks to tackle market-wide issues that cannot be addressed by a single organisation, and will set the foundation for stakeholders across the insurance ecosystem to create innovative solutions to address key risks confronting the region.
- Policy Think-Tank
- Conduct independent research to support policy decisions in assessing, quantifying, and mitigating emerging risks in the insurance industry.
- The Policy Think-Tank provides a neutral platform for industry to engage and coordinate with regulators to generate practical research and policy insights on key risks and issues in Asia (e.g. health and retirement resilience, infrastructure financing). It will also strengthen the representation of Asian perspectives and priorities in key global insurance think tanks and bodies.
- Talent Development
- Grow a pipeline of skilled insurance talent with capabilities in emerging areas and evolving industry needs, to meet the demands of Asia’s growing insurance markets.
GAIP supports efforts to improve understanding of emerging risks and protection gaps affecting Asia, and strengthen the insurance sector's ability to respond to them. This includes developing data, research and tools that support more effective risk assessment, modelling and solution development. Through its Policy Think-Tank and Living Lab, GAIP also convenes industry, regulators and policymakers to explore practical approaches to risk management, liability considerations, risk pricing and protection-gap solutions.
Learn more information about the Global-Asia Insurance Partnership.