Remarks by Mr Tharman Shanmugaratnam, Deputy Prime Minister, Minister for Finance & Manpower and Chairman, Monetary Authority of Singapore At the Official Naming Ceremony of AXA Tower
Remarks by Mr Tharman Shanmugaratnam, Deputy Prime Minister, Minister for Finance & Manpower and Chairman, Monetary Authority of Singapore at the Official Naming Ceremony of AXA Tower
Mr. Olivier Caron, Ambassador of France to Singapore,
Mr. John Dacey, Vice Chairman for Asia Pacific, AXA,
Ladies and gentlemen,
1 It is my pleasure to join you this evening at this significant event for AXA. The new office brings together more than 600 AXA staff as well as supports AXA’s expansion in Singapore.
Harnessing Asian Growth Potential
2 AXA, and the broader insurance industry, is well-poised for growth in Asia. This growth in Asian economies will drives demand for risk management solutions. Emerging Asia is expected to post the strongest growth in insurance premiums over the next decade – industry sources project this at about 10% per annum, compared to 3-4% globally.
3 Insurance penetration rates in Asia are still very low, and there is clearly significant untapped potential for growth. To realise this potential, however, the industry has to develop a deeper pool of talent - people with a sound understanding of risks and Asian markets.
Developing the Insurance Talent Pool
4 I understand that AXA is a firm believer in people development. Your commitment to training was reflected in the launch of the AXA University Asia Pacific Campus in Singapore two years ago. The Campus has seen more than 4,200 participants pass through its doors since its establishment, and also played host to important events such as AXA’s first Executive Committee meeting in Asia and the upcoming AXA-Aon Asia Pacific Natural Catastrophe Conference in September.
5 Several industry-wide initiatives have also been initiated to augment the pipeline of talent, both at entry and mid-career levels of the insurance industry. These include the Global Internship Programme (“GIP”), helmed by the General Insurance Association, and the Insurance Executive Scholarship Programme (“IESP”), introduced by the Singapore College of Insurance (“SCI”). For experienced professionals, various training programmes under the Financial Sector Development Fund are available to support further education, training and overseas attachments.
Understanding Asian Risks
6 Besides developing our people, it is critical that we invest in research needed to develop effective risk solutions. This is especially so for Asia, where the understanding of risks is less developed and the dynamics of risks are evolving quickly. The AXA Research Fund has shown considerable foresight in its identification of three focus areas for research – life risks, environmental risks and socio-economic risks. These are highly relevant in the study of Asian risks today.
7 The first area is life risks. Longevity risk and its implications for retirement security is becoming more significant in Asia, as in Europe and the US.
8 The second area of environmental risks is also important. The incidence of natural catastrophes is unfortunately on the rise, whether due to climate change or urbanisation. It is of particular concern to Asia, which is the most disaster-prone area in the world. A report by the United Nations found that that Asia lacks preparedness and capacity to cope with such disasters – while the region generated one quarter of the world’s GDP, it accounted for 85% of deaths and 42% of global economic losses due to natural disasters.
9 Third, economic risks. Supply chains are becoming increasingly international, with manufacturing processes spanning across borders. Events in one part of the globe can affect the rest of the world. This has been demonstrated by the recent spate of natural catastrophes in Asia Pacific. The impact of these disasters went beyond local property damage – business interruption losses due to supply chain disruptions were major, and few were prepared for it.
10 These risks clearly need to be better managed. But first, they need to be better understood. More data and research into Asian-centric risks should be encouraged. Data standards should also be raised over time so that timely, detailed and accurate information can be gathered. This will help insurers to deliver appropriate risk management solutions for Asian clients.
11 Recognizing the importance of augmenting the knowledge base for Asian risks, several research institutes have been established in Singapore to study a variety of relevant research topics, ranging from the Centre for Silver Security under SMU’s Sim Kee Boon Institute for Financial Economics which will look at longevity risks to NTU’s Institute of Catastrophe Risk Management which will focus on catastrophe risks.
12 I am pleased to note that the AXA Research Fund recently awarded its first grant in Asia to the National University of Singapore for its research project on the Biology of Decision Making under Risk.
13 I hope AXA continues its investment in talent development and research initiatives. I am also happy to see that you continue to dedicate resources to your Singapore platform, with your non-life business as well as complex and specialized insurance risks for the region headquartered in Singapore.
14 Congratulations to AXA on the opening of its new office here at 8 Shenton Way. I wish you all the best as you embark on the next phase of your growth in Asia