•  Five of the top 10 primary growth markets will be in the Asia-Pacific; this includes China, India, and Indonesia. There are three structural factors driving demand for insurance in Emerging Asia. First, Asia is getting richer. Projections by the IMF show that Emerging Asia will remain the fastest growing region in the world over the next decade. As incomes rise in Asia, governments, corporates, and individuals will increasingly seek insurance to protect their growing economic assets. •  Burgeoning urbanisation, infrastructure development, and cross-border trade will drive demand for commercial and specialty insurance. •  A growing middle class and rising affluence will underpin a steady increase in life and health insurance penetration rates. Second, Asia is getting older. Asia is facing declining fertility rates, increasing life expectancy, and a rapidly ageing population. •  The United Nations projects that, by 2030, Asia’s old age dependency ratio will be 16%, up from today’s 11%. •  Against this demographic backdrop, public retirement and pension systems in Asia remain inadequate. The retirement gap between savings and retirement needs can be as high as 13 years. •  This will spur greater demand for private health insurance, annuity and other retirement security products. Third, Asia is becoming more aware of catastrophic risk. •  Over the last 30 years, Asia has borne the brunt of natural catastrophe losses, accounting for almost half of the world’s estimated economic losses from natural disasters. Yet less than 5% of the losses were insured, compared to 40% in advanced economies.
•  London controls more than 60 billion pounds in premiums, which makes the London market twice the size of Bermuda, three times that of Switzerland, and more than 10 times bigger than Singapore. With its wealth of insurance and specialist risk capacity, London insurance is well positioned to ride the growth in Asian demand. But insurers will benefit from closer proximity to markets, information, and talents. Global insurers and brokers are responding to a growing preference for local placements by setting up local offices in high growth markets to understand their clients better and to be more responsive to their needs. This is where Singapore and London can play complementary roles. London with its unparalleled insurance expertise and experience, and Singapore, with its market proximity and client knowledge can collaborate on providing insurance and risk management solutions that are, relevant, appropriate and responsive to Asian needs. Conclusion The fascinating origins of Lloyds, over 300 years ago – in a coffee house where seafarers gathered to swap intelligence on their trade – illustrates the enduring power of information, networking and the centrality of markets. As with Lloyd’s coffee house, the essence of financial centres lies in connecting markets and people to provide innovative solutions to further economic prosperity. The rising demand for financial services in Asia offers tremendous opportunities for London and Singapore to strengthen our connections for sustainable insurance growth. Thank you. BIS central bankers’ speeches  5