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SINGAPORE-Singapore is rapidly developing as a regional reinsurance center, with 50 reinsurers now established in the region.
The Monetary Authority of Singapore is encouraging more reinsurers to come to the region, according to Lee Yock Suan, Singapore's minister for trade and industry and second minister for finance, who officially opened the fourth Singapore International Reinsurance Conference at Singapore's Shangri-La Hotel last month. Also, the Singapore government wants international reinsurers to grant their Singapore offices greater autonomy to help develop a "dynamic, competitive reinsurance industry." The offices currently are "limited in scope," Mr. Lee said.
"MAS is keen for reinsurers to establish full offices here and for those here to expand their scope and underwriting authority," he said.
The MAS, which regulates the industry, will set no limit on the number of reinsurers or reinsurance brokers licensed to operate in Singapore, he noted.
Mr. Lee said reinsurers are gaining access to the relatively uninsured Asian markets, with 1996 gross written premiums for Singapore's reinsurers reaching $916 million Singapore ($654.7 million), of which $714 million Singapore ($510 million) is from business outside Singapore.
That compares with only $263 million Singapore ($166.8 million) of premium written by Singapore-based reinsurers 10 years ago.
Singapore reinsurers have to serve a wider region, use state-of-the art technology and use their "main competitive weapon," which is human resources, Mr. Lee said.
Reinsurers in Singapore now employ 600 people, of whom 45% are college graduates, which is "higher than the insurance industry as a whole," Mr. Lee observed.
However, 43% of the staff have less than five years' experience in the industry, and much training is required to "bring up their levels of experience."
In addition, Singapore is becoming an information technology hub and that will assist reinsurers.
In a separate panel session, Teddy Hailamsah, president/director of PT Asuransi Central Asia, based in Jakarta, Indonesia, told the conference delegates price still is the key issue for cedents in Asia.
However, in the long term that will change, and service will be the prime factor, though "it may take another 10 years," Mr. Hailamsah said.
Mr. Hailamsah said regional insurers have to step outside regulated markets.
"The governments are like our parents, they cannot keep us at home all the time," Mr. Hailamsah said.
Governments in highly regulated markets are "trying to protect their children, but they must release them into the world's playground," Mr. Hailamsah said.
John S. Davidson, regional manager of Commercial Union P.L.C. in Singapore, said customers will dictate what they want from the market, and "protected markets don't give the customer a good deal."
"There are examples of markets where customers can't get the wordings they want because the market is protected. It's artificial to try to protect customers from foreign entrants, because ultimately, the customer wants to deal with someone who can provide what he wants," Mr. Davidson said.