In an AGM filled with questions where shareholders were eager to understand the dynamics of the reinsurance business affected by lower rates and a dire investment climate, Singapore Reinsurance Corporation introduced its three new independent directors as well announced the opening of a retakaful window under its Labuan branch.
Mr Ramaswamy Athappan, Chairman of Singapore Re, said: “The wheels have been set in motion for your Corporation to better access takaful business”.
On the introduction of new blood to the board as part of the company’s compliance with the more exacting corporate governance standards and definition of independent directors imposed on financial institutions in Singapore, Mr Athappan introduced the new directors Mr Dileep Nair, Mr Peter Sim Swee Yam and Mr Ong Eng Yaw.
Mr Nair, a non-executive and independent director, was appointed to the board on 20 October 2015. He is Singapore’s non-resident High Commissioner to Ghana and sits on the Board of Thakral Corporation Ltd and Keppel DC REIT Management. He is also a Board member of the Agri-Food & Veterinary Authority of Singapore. He graduated with a Bachelor of Engineering (Magna cum Laude) from McGill University, Canada and has a Master in Public Administration from Harvard University, USA. He was awarded the Public Administration Medal (Silver) by the Singapore Government and the Friendship Medal by the Government of Laos.
Mr Sim, a non-executive and independent director, was appointed to the board on 24 August 2015. He is a partner at Sim Law Practice and an independent director of Lum Chang Holdings, Marco Polo Marine, Mun Siong Engineering and Haw Par Corporation. He also sits on the board of the Young Men’s Christian Association (YMCA) of Singapore and Singapore Heart Foundation. He graduated with a Bachelor of Law from the University of Singapore and was admitted to the Singapore Bar in 1981. He was awarded the Pingat Bakti Masyarakat in August 2000 and the Bintang Bakti Masyarakat in August 2008.
Mr Ong was appointed as a non-executive and independent director on 24 August 2015. He currently holds the position of Manager (Investments) at Hwa Hong Corporation. His prior work experience in OCBC Bank, Vickers Ballas, DBS Bank, CIMB Group and Parkway Life Real Estate Investment Trust has given him breadth of exposure in corporate finance, investment and real estate development. He graduated with a Bachelor of Law (Second Class Upper Division) from University College London and holds a Master of Science (Investment Management) from the Cass Business School and a Master of Business Administration from INSEAD.
In the difficult market conditions and with a more stringent risk selection, Singapore Re’s premium revenue fell by 12.7% to S$128.3 million (US$95 million) in 2015 of which 53.4% emanated from Singapore and the remaining 46.6% was derived largely from ceding partners within Asia, including the Middle East. The underwriting surplus for the year was down to S$950,000 compared to the S$1.9 million in 2014. This was largely attributed the poorer rates in the market though 2015 was relatively a benign year CAT-wise.
The Group’s net investment income declined by 42% to S$10.2 million in 2015 (2014: S$17.6 million) primarily due to lower revaluation surplus on property investments, higher impairment write-down on equity investments and lower profit realised on equities. Overall, the Group’s pre-tax profit decreased by 41.1% to S$12.1 million (2014: S$20.6 million pre-tax profit).
In his statement in the annual report, Mr Athappan also said that although the non-life premium growth in the emerging markets in Asia is projected to grow in excess of 10% for 2016, recent and likely impending regulatory changes in specific regional territories — particularly, China, India and Indonesia — and the more stringent solvency regimes, would render some of the regional (re)insurance markets even more challenging.
He said: “The pick-up in pace of M&As mean better capitalised primary insurers who would retain more business and cede out less. In addition, excess capital and capacity would continue to plague the (re)insurance sector with ever-widening coverages and reducing premium rates at uneconomical levels. With all these negative forces in play, healthy premium growth would be a challenging task.
“On the investment front, the continued uncertain economic outlook combined with the increasing geopolitical risks globally will make it difficult to improve upon the hitherto not-unsatisfactory investment returns. However, your Board will continue to pursue a prudent strategy in order to safeguard the interests of Shareholders.”