"Strengthening China-Singapore Insurance Connectivity" - Welcome Address by Mr Lawrence Wong, Minister for National Development and Board Member, Monetary Authority of Singapore at the China Reinsurance Office Opening Event on 25 July 2016
Ambassador Chen Xiaodong, Ambassador of the People’s Republic of China to Singapore
Mr Zheng Chao, Economic & Commercial Minister Counsellor of the Embassy of the People’s Republic of China in Singapore
Mr Yuan Linjiang, Chairman of China Reinsurance Group
Ladies and Gentlemen
Good evening. I’m very happy to join you here at the official opening of China Reinsurance (Group) Corporation’s new office in Singapore.
2. This is an occasion of double celebration. Firstly, China Re’s Singapore office is the Group’s first Asian branch outside China. This marks a significant milestone in your internationalisation strategy to become a globally diversified reinsurance group. Secondly, China Re is also the first Chinese reinsurance company setting up in Singapore. This opens up a new chapter of insurance connectivity between China and Singapore.
China-Singapore Financial Connectivity
3. Financial cooperation has become a key pillar of China-Singapore bilateral relations.
4. Today, China is Singapore’s largest trading partner, and Singapore is China’s largest source of foreign investment. The linkages between the two countries have increased tremendously. As Chinese companies expand and internationalise abroad, they are increasingly using Singapore as its gateway to Asia and the world. They recognise that Singapore is well-connected with key regional economies such as ASEAN, India, Korea, Japan and Australia, and also experienced in dealing with developed markets such as US and Europe.
5. There are now some 6,500 Chinese companies in Singapore. This number has grown tremendously. More than a decade ago, I remember there were only about 2000 companies, and this number has now increased to 6,500. Many of them, such as Lenovo and China Minmetals Nonferrous Metals, have set up regional centres of excellence in finance, treasury and insurance risk management to finance and manage their operations in Asia Pacific. A growing number of Chinese insurance companies, such as China Taiping, China Life and now China Re have commenced operations in Singapore to provide insurance and risk management services to Chinese and regional companies.
Strengthening China-Singapore Insurance Connectivity
6. Singapore’s insurance linkages with China have grown over the years. China is now Singapore’s second largest offshore reinsurance market. Many Singapore-based insurers have had a long history of providing insurance capacity and support to the Chinese market. Existing cooperation projects in the 3 cities of Suzhou, Tianjin, and Chongqing have further strengthened the cross-border flow of insurance capital, talent and ideas across the two countries. Recently, MAS and the China Insurance Regulatory Commission (CIRC) had our first exchange under the China Singapore Joint Council for Bilateral Cooperation (JCBC). This has been a very useful platform to advance collaborations in areas such as natural catastrophe insurance initiatives.
7. We look forward to stronger insurance connectivity between Singapore and China in our next phase of our partnership. This is an area where there will be many opportunities to collaborate and grow together. China is one of the world’s fastest growing insurance markets. It is expected to grow to reach RMB 5 trillion in premium volume by 2020, making it the second largest insurance market in the world by 20251. To support this structural transformation, the Chinese government has launched a new blueprint to speed up the development of China’s insurance industry. The role of insurance was also affirmed in a number of strategic imperatives in the region, such as the Renminbi internationalisation and the One Belt One Road initiative.
8. The growth opportunities for the insurance sector are not just in China, but also in the broader Asian region. Asia remains significantly underinsured, at about 1-3% penetration rate, or less than half of the global average. Within emerging Asia including ASEAN, the insurance industry is estimated to grow by 9% per annum over the next 10 years. By 2025, Asia is likely to account for almost 40% of the global insurance market. 5 of the expected top 10 primary growth markets will be in Asia-Pacific, including markets such as China, India and Indonesia. There are many opportunities to tap on the growth of Asia and the growth of insurance in this market. Going forward, there is a need for innovative risk financing solutions to address the widening protection gap, through data analytics and risk modelling.
9. Singapore is a financial centre at the heart of Asia. We believe there is much that China Re can achieve as you expand and deepen your presence in Singapore. I am confident that Singapore, with its strong cluster of global re/insurers, brokers, ancillary services, research institutes and innovation labs, offers a unique ecosystem which will enable reinsurers such as China Re to co-create a full range of innovative insurance solutions to meet the region’s growing needs.
10. In closing, I would like to extend my heartiest congratulations to the China Reinsurance Group on the opening of your new Singapore office. I look forward to stronger China-Singapore ties in the years to come.
11. Have a great evening ahead. Thank you.
1 Munich Re Insurance Market Outlook, 2015