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Singapore has emerged as a reinsurance hub in Asia Pacific, with about 30 reinsurers and 15 reinsurance brokers operating in Singapore. 20 of the world’s top 25 reinsurers have branches in Singapore, and Singapore has the biggest market for Lloyd’s outside of London. 

The Vision of a Regional Reinsurance Hub

Decades ago, the Singapore insurance industry had been closed off to direct foreign insurers, and relied very much on the life insurance business. The global marketplace it is today could not have happened without the vision of our then Chairman of the Monetary Authority of Singapore, Mr Lee Hsien Loong. In 1999,  Mr Lee Hsien Loong set a goal for Singapore to transform itself to become an Asian insurance and reinsurance hub by year 2003. 

Singapore’s insurance industry was liberalised in 2000, and opened up to foreign insurers. This led to an influx of global insurers, reinsurers and brokers setting up branches in Singapore. Gross offshore and Singapore insurance fund premiums grew exponentially.

Propellants of Growth

The success of Singapore as a reinsurance hub could be attributed to the confluence of several factors. Singapore’s prime geographical location, political stability, regulatory regimes and the general boom of demand for insurance in Asia all play a part in Singapore’s emergence as a regional marketplace for reinsurance.

Future Outlook

Singapore’s next goal is to become a global insurance marketplace by year 2020. Fulfilling that vision would mean having to overcome the challenges of an increasingly complex operating environment, tightening regulations and capital requirements, depressed investment returns and many more. Despite that, Asia Pacific can be expected to continue to lead global growth in this industry. In Singapore, close collaboration between the market players, including the sharing of knowledge and expertise, will definitely help in elevating the entire industry to greater heights. 

Post published on 26 August 2016.