Published Date: 22 February 2017

Opening Address by Ms Lee Keng Yi, Director and Department Head (Insurance Department), Monetary Authority of Singapore, at the 17th Asia CEO Insurance Summit on 21 February 2017

Distinguished guests

Ladies and gentlemen

1.    Good morning and a warm welcome to everyone, especially our guests from overseas.  It is my pleasure to be here today at the 17th Asia CEO Insurance Summit.  Congratulations to the organisers, the Asia Insurance Review and the Geneva Association, for putting together a very interesting conference program that has brought many of you here today.

2.    The theme for this summit, “Organised Chaos – Leading in a World of Speed, Insurtech & Social – A New Deal for Insurance”, is particularly appropriate in this time of change and opportunity in the business landscape.  Shifts in consumer demographics and behaviours, led by the millennial generation, have resulted in a demand for a personalised experience in the consumption of products and services, characterised by speed, convenience and transparency.  At the same time, the disruptive yet transformative potential of digitalisation can challenge existing ways of doing things and present new opportunities for growth.  As it is, new technology-enabled innovative business models are already posing disruptions to some industries in ways that better cater to consumer needs.

3.    Faced with an increasingly tech-savvy consumer base and the wide-spread digitisation of information in this internet age, insurers have to be nimble-footed to adapt to change and not lag behind.  I am pleased to observe examples of the insurance industry embracing various facets of technology, or Insurtech, across different aspects of the value chain to strengthen consumer engagement, improve customer experience and ultimately, expand insurability. Some examples include:

  • The setting up of innovation labs or Fintech units to spur innovation and experimentation;
  • The shift to digital platforms as an alternative communication channel to engage consumers and distribute products directly hence improving the user experience;
  • The use of telematics and data analytics to collect, measure, monitor and analyse large quantities of data in real time to more effectively model risks and lower insurance costs; and
  • The increasing number of insurers willing to experiment with new technologies as seen by the growing membership of the Blockchain Insurance Industry Consortium, or B3i in short, to explore the use of distributed ledger technology to automate and streamline existing manual processes whilst improving auditability.

4.    These are encouraging developments and I urge the industry to press ahead with more of these potentially game-changing efforts to better serve consumers and stay relevant.

MAS’ Initiatives to Support Innovation

5.    MAS has also been taking steps to create a conducive environment that supports innovation.  We support the use of technology to increase efficiency, manage risks better, create new opportunities and improve lives.  To achieve this, a vision was laid out in 2015 to develop Singapore into a smart Financial Centre where innovation is pervasive and technology is widely used.

6.    MAS has been working closely with financial institutions, Fintech start-ups, academia and other stakeholders towards this shared vision of a vibrant yet sustainable Fintech ecosystem.  We do so by facilitating the technology infrastructure and providing a regulatory environment that fosters innovation without compromising the safety and soundness of the financial system.  We will also be supporting the recommendations of the Committee on the Future Economy to position Singapore’s financial sector for the future, including harnessing the transformative potential of digitalisation for growth and innovation.

7.    Let me illustrate some of the initiatives that are relevant to the insurance sector:

  • First, we have launched a regulatory sandbox in June last year to provide a conducive space for industry players to test their innovations within controlled boundaries.  The Fintech Regulatory Sandbox Guidelines were issued in November last year to provide greater clarity on the regulatory sandbox approach, the evaluation criteria for entry into the sandbox, as well as the application and approval process for interested firms.  Where appropriate, specific legal and regulatory requirements may be relaxed to support experimentation during the sandbox period.
  • Second, we will be allowing insurers to offer the full suite of life insurance products online without advice to cater to the needs of a growing segment of technology savvy, self-directed consumers.  To foster safety and ensure that consumer interests are protected, we will be issuing a set of guidelines on the safeguards to be put in place for the online distribution of such products.
  • Third, we are building data infrastructure for natural catastrophe and cyber risk insurance in collaboration with the industry and academia. To enhance catastrophe insurance penetration in Asia, the Natural Catastrophe Data Analytics Exchange has been established in April 2016 to expand the availability of high-quality data on catastrophes in the region by pooling industry loss data and collecting economic data through remote sensing technologies.  On the other hand, to help accelerate the growth of cyber risk insurance, the Cyber Risk Management Project aims to better quantify cyber risks through developing industry-wide risk definitions, databases and models.

Navigating and Leading in the Disruptive Environment

8.    In addition, I would like to take this opportunity to briefly put forward three areas that leaders of insurance companies must continue to build upon, when harnessing innovation to stay relevant and ahead of competition.

  • First,  enhancing the social value of insurance;
  • Second, building a sound risk culture; and
  • Third, improving competencies and skill sets.

 Enhancing the social value of insurance

9.    First, I would like to urge the industry to use technology to enhance the social value of insurance by developing more affordable and efficient solutions to better meet consumers’ insurance needs.  The availability of granular data from digitisation and the development of advanced analytics tools can help insurers perform greater consumer segmentation, and more effectively model risks and underwrite policies.  Where the use of big data helps to influence behaviour of consumers to reduce moral hazard, this is a good outcome. However, the adoption of new technologies to develop innovative solutions for consumers can be a double edged sword.  The same use of big data could also result in certain segments of the society being labelled as higher risk, potentially creating groups of seemingly “uninsurable” people due to factors that are beyond their control such as genetic or living conditions.  This is an outcome that we want to avoid, and a potential challenge that may arise that will require both private and public sector leaders to address.  It is thus imperative for leaders of insurance companies to carefully consider the impact and trade-offs, that technology and innovation may have on public interest.  Instead of unfairly excluding existing insurable groups, insurers can leverage technology to narrow protection gaps of individuals.

10.    Overall, I am heartened to see that the insurance industry has been actively using technology to promote financial inclusion and consider how insurance coverage may be provided.  For example in emerging markets, technology firms are partnering mobile operators and insurance providers to distribute products via mobile devices to consumers in rural areas that were previously unreachable due to geographical barriers, hence extending insurance protection to the underserved.

 Building a sound risk culture

11.    Second, on building a sound risk culture.  Just as technology provides new opportunities, it also poses risks especially in areas such as cyber security and protection of customer data.  The consequences of compromising these areas go far beyond financial loss and can be devastating to an insurer’s reputation.

12.    Therefore, it is key for insurers to foster a sound risk culture to ensure that your existing and emerging risks are managed effectively.  To achieve the desired risk culture, the board and senior management must set the tone from the top.  The risk culture should be aligned to the organisation’s overall objective and risk profile, and permeate the organisation to encourage strong commitment to responsible business behavior by all staff.  There should also be effective frameworks in place to facilitate open communication, sharing of knowledge and best practices, and proper accountability for undesirable behavior and practices.

13.    An effective governance framework and a sound risk culture are necessary for an organisation to remain profitable, competitive and resilient through the increasingly complex business environment influenced by the rapid growth of innovation.

Improving Competencies and Skillsets

14.    This brings me to my final point, on improving competencies and skillsets. With technology and innovation increasingly taking on a bigger role in the insurance industry, the nature of jobs and the competencies required will also evolve over time.  While insurers continue to invest in technologies, it is equally important to ensure that your people continue to have the adequate skillsets to harness these technologies and innovations to their fullest potential.

15.    In Singapore, we have a nationwide movement – SkillsFuture – to provide Singaporeans with opportunities for lifelong learning, through the provision of subsidies and grants.  For the financial sector, MAS is seeking to uplift the proficiency of the existing work force through various schemes.  One example is the Tech Skills Accelerator Finance Committee which was established in collaboration with the Info-communications Media Development Authority of Singapore, as part of the SkillsFuture movement, to facilitate the career development of tech professionals within the financial sector.  We are also working with the Singapore College of Insurance and various insurance companies to look into providing better pathways to develop and nurture Singaporeans in our industry.

16.    A strong and competent workforce capable of making the best use of technology is essential for success in this fast evolving business landscape.  In this regard, we encourage insurers to continue identifying existing gaps in competencies and skills, with a view to close this gap through investment in training and development of your people.


17.    To conclude, as insurers seek to harness technology and innovation “in a World of Speed, Insurtech & Social”, it is important to keep the aim of enhancing the social value of insurance, fostering a sound risk culture within your organisations, and building a competent workforce. Focusing on these areas will serve as a compass for insurers to not only navigate, but to lead, in the current landscape of innovative chaos.

18.    On this note, I wish you a successful and fruitful summit.