Incubate solutions for new and emerging risks, embrace technology and innovation, and build strong pipeline of talent – these are the three priority areas for the general insurance industry, said Singapore’s Second Minister for Finance Lawrence Wong at the General Insurance Association (GIA) of Singapore’s 50th anniversary party, where he congratulated GIA for a job well done in helping Singapore grow and flourish all these years.
Mr Wong, who is also Minister for National Development, said Singapore’s general insurance industry has come a long way and the nation is today a thriving eco-system of global insurers, intermediaries, ancillary services, research institutes and innovations labs, offering a full range of innovative insurance solutions to meet the region’s growing needs.
Embracing technology and innovation
On embracing technology and innovation, he said that technology will be a key driver of innovation in the financial industry and it brings enormous promise to bring significant improvements along entire value chain in the insurance industry. He cited a PwC survey which found that annual investments in InsurTech startups have risen five-fold over the past three years.
He was pleased to note that Singapore’s insurance industry is embracing technology with several insurers having set up innovation labs or are collaborating with FinTech companies to tap their technologies and expertise.
Pervasiveness of digital technology has itself created a growing market for insurance. GIA can take the lead in exploring the opportunities and changes that emerging technology brings to the local general insurance industry, he said.
Citing the example of cyber, he said that for the most part, these new risks are still not well understood by businesses, and they remain a challenge for insurers to quantify. In many cases, these risks are currently uninsured or they are inadequately covered by traditional insurance. So it really presents a significant market opportunity for the insurance industry.
On the talent pipeline, he said: “Even though it is a world of automation, I don’t think robots will replace humans any time in the foreseeable future. We will still need the human touch in many areas. Ultimately, the insurance business is a people business. We will need to have the people in place in order to drive the growth of the general insurance sector.”
To remain relevant
Mr A K Cher, President, GIA, also spoke about the importance of innovation. To stay relevant, he said insurers need to research and develop innovative products, review and reform workflow process, and explore and embrace non-traditional distribution channels.
He said: “Insurers need to develop innovative products to meet the complex risk exposures facing business. As an example, Cyber Risks Insurance is available today because businesses have become reliant on technology and are prone to cyber-attacks. Secondly, insurers need to reform our workflow and increase productivity. Intense engagement of technology is likely to result in operational efficiency.”
And thirdly, he said that the distribution of general insurance products has taken a new and dynamic dimension with the advent of smart phones, digital devices and user-friendly applications. “Insurers should not be contented with current distribution channels but challenge ourselves to embrace disruptive models which offer fresh opportunities in capturing data and deals.”
“As a trade association, we are fully dedicated to deliver our commitment to all stakeholders for mutually beneficial outcomes. This is our pledge as we move forward in the next 50 years and beyond,” he concluded.