Lim Hng Kiang: Growing Singapore’s vibrant insurance industry Speech by Mr Lim Hng Kiang, Deputy Chairman of the Monetary Authority of Singapore and Minister for Trade and Industry, at the General Insurance Association 40th Anniversary Dinner, Singapore, 26 October 2006. *  *  *  Mr Derek Teo, President, GIA Distinguished guests, ladies and gentlemen  Introduction I am happy to be here celebrating your 40th anniversary with you. As we celebrate this important milestone, let us draw lessons from the past as we consider opportunities for the future. From $ in gross premiums in 1965, the general insurance industry has grown more than 60 times, writing premiums of $ in 2005. In real terms, the compound average growth rate is a credible 8.2%, just above Singapore's average GDP growth of 8.0% over the same period. GIA’s role and challenges going forward GIA has played an important role in shaping the growth and development of the general insurance industry. The Best Practices on Agency Management, the Premium Payment Framework and the revised Code of Practice are examples of the good work done. Another important role played by GIA is to be the voice for the industry. For example, the Motor Insurance Review Workgroup's initiatives were pivotal in steering the motor insurance sector's return to profitability. GIA has also taken a pro-active stance in educating consumers on general insurance products.
The Risk-Based Capital Framework and Risk-Based Supervisory approach give room for institutions to innovate and take more risks as long as adequate controls and risk management practices are in place. BIS Review 103/2006  1  Liberalisation of the general insurance industry MAS will also continue to encourage greater participation from a wide range of global insurance players in our market. In 2000, we lifted the moratorium on admission of new direct general insurers and removed the 49% limit on foreign shareholding in locally-owned direct insurers. Since then, the industry landscape has evolved considerably. Today, we have a diverse network of 58 direct insurers, many of whom are specialist insurers, 27 professional reinsurers and 60 captives. Most of the top international insurance and reinsurance brokers are also here. We continue to see interest from more players seeking to establish a presence here. We will consider all applicants that are well-capitalised, have an acceptable rating, and are managed by experienced professionals with a good track record even if the company is newly established. Singapore as an insurance hub Singapore has achieved a critical mass of insurance players and activities, becoming an insurance hub. This critical mass means a wide range of insurance products and services are available. Singapore is a logical choice for those seeking to purchase insurance because they know that there are capacity and expertise here. Indeed, Singapore serves as an important regional reinsurance centre as well as the largest captive domicile in Asia. Asia holds many opportunities for insurance.