Address by Mr Low Kwok Mun, Executive Director (Insurance Supervision), Monetary Authority of Singapore, at the CII-SCI Educational Alliance (Asia Pacific) CEO Luncheon at The Fullerton Hotel, Wednesday, 10 October 2007
1 Good afternoon, ladies and gentlemen.
2 It is my pleasure to join you at this special occasion to officially launch the educational alliance between the Chartered Insurance Institute and the Singapore College of Insurance.
Development of Singapore as an IFC
3 Singapore has done well to establish itself as an international financial centre. We now have more than 900 banks, insurance companies, securities dealers and fund managers operating in Singapore. Most of them are institutions of international repute.
4 Spurred on by the strong economic performance of the region and beyond, Singapore’s financial sector has continued to grow strongly this year. In the second quarter, it recorded a year-on-year growth of 15.4%, twice the overall GDP growth. This has led to strong employment growth in the financial sector. In 2006, an additional 11,300 jobs were created compared with 7,700 jobs in 2005. In the first half of 2007 alone, 9,500 jobs were created. This high level of job creation has placed heavy demands on the workforce as pockets of insufficient supply have appeared particularly in the banking and insurance sectors.
5 Wealth management is among the fastest growing activities in Singapore over the last few years. This has led to greater demand for specialised insurance products for high net worth individuals. In addition, for the non-life sector, the growth in trade and economic activities in Asia has generated increased demand for specialist insurance coverage, such as for marine cargo, product liability and professional indemnity. These lines of business are projected to grow at between 15% and 25%.
6 As a whole, insurance premiums - both life and non-life – in most emerging markets in Asia have been growing faster than GDP. Estimates from Swiss Re show that premiums in emerging markets will grow at 7.5% over the medium term till 2014. Besides these economic developments, climate and demographic changes will also spur the demand for more sophisticated insurance products in Asia, for example, insurance against the risks of natural catastrophes and increasing longevity.
Developing Insurance Manpower
7 For the insurance industry to seize the growing business opportunities generated by these developments, a deep pool of talent is needed at all levels, from front-end operatives to senior management. Singapore is cognisant of these challenges and we have placed significant importance on attracting and developing our manpower resources, both in terms of numbers and depth of expertise.
8 You may already be aware that one of our key initiatives to attract talent to join the financial industry is the Financial Industry Competency Standards (FICS) framework. With the strong support from the Monetary Authority of Singapore, the FICS was set up by the financial industry in 2005 to benchmark competency standards of financial professionals to international best practices. Since its launch, a number of financial institutions have adopted FICS for their in-house relationship management programs, including Credit Suisse, Great Eastern Life, DBS, UOB and UBS just to name a few.
9 I encourage the insurance industry to leverage on the FICS infrastructure which has been established for key insurance job families, ranging from underwriting to claims management in both life and general insurance. SCI is playing a key role in this national initiative, having recently been appointed a lead provider for FICS-accredited training and assessment programs for general insurance, life insurance, and the retail and mass affluent segments in wealth management. SCI has already developed FICS-compliant curriculum for its General Insurance programs that are also consistent with the curriculum requirements of CII’s programs.
The CII-SCI Educational Alliance (Asia Pacific)
10 This sets a strong foundation for the establishment of the CII-SCI Educational Alliance that we are witnessing today. The formation of such a strategic alliance between two well-established education and training providers creates many exciting opportunities. I expect this collaboration to provide Singapore and the region a set of world-class insurance education programs that will not only raise the level of professional practice in Singapore but also firmly establish Singapore as an insurance education hub in Asia.
11 The success of this alliance will significantly enhance Singapore’s competitiveness as a financial centre through the expansion of the breadth and depth of expertise available in our workforce. Besides building a broad base of insurance talent, it will develop industry specialists and leaders, which are critical to the success of our financial centre.
12 It is perhaps a well accepted fact that many successful companies have one thing in common, a strong commitment to leadership development. They have state-of-the-art training centres, working with the best universities and training providers in the world, and using the latest leadership development tools. I understand that IBM invests more than US$700m annually to develop its workforce. Sophisticated training programs, tools and practices on their own are not sufficient. Companies that excel make leadership development an integral part of their culture.
13 In conclusion, I strongly urge the insurance industry, particularly top management executives like yourselves, to look towards manpower development as a key strategy in maintaining the competitive edge of your companies and seize the enormous growth opportunities in the region.
14 In this regard, I look forward to your support of this collaborative effort between CII and SCI. You should take full advantage of the programs that will be rolled out to develop the necessary talent to support your business. MAS will continue to work closely with the industry to ensure that there is an adequate pool of talent to support the long-term growth of the industry.
15 Thank you.