Ravi Menon, the outgoing Managing Director of the Monetary Authority of Singapore (MAS), says that government agencies and companies need to do more to pool insurance data across Asia.
“We have made progress in improving demand [for insurance solutions] through expanding the availability of high resolution data, but sizeable data gaps remain for Asian risks,” said Menon. He was speaking at the 19th annual Singapore International Reinsurance Conference (SIRC) on 30 October, 2023.
This is the first time in 10 years that Menon has spoken at SIRC. It is also likely to be his last, since he is due to retire from his current position at the end of the year.
When Menon last spoke at the conference, he outlined his vision for data infrastructure across the region. He says that there has been some progress, but it has been far from sufficient and there is a lot more that still needs to be done.
“While data exists, in many cases it is fragmented across government agencies, reinsurers, insurers, brokers, academics and businesses,” said the managing director. “Data is in different formats, not clean, not standardised, hard to use and hard to access.”
He added that data gaps are particularly acute in emerging risk areas, such as pandemic and climate risk.
These areas are “complex, evolving and less understood”, said Menon. For instance, he continued, climate change will impact the health and life expectancy of populations by accelerating the spread of vector-borne diseases such as malaria, worsening air quality and food security.
“We need to create platforms for trusted public health data to support risk underwriting,” said Menon.
However, comments from Jean-Jacques Henchoz, Chief Executive Officer at Hannover Re, show how challenging it could be for Asia to realise the vision that Menon laid out.
“It’s a difficult one because on the one hand you want [data harmonisation] to be fast and clear and transparent [but] on the other hand you don’t want to create a dynamic where individual actors don’t see the competitive advantage of pushing the boundaries,” said Henchoz during a question-and-answer session that immediately followed Menon’s address.
While he acknowledged that regulators can help improve data quality in certain areas, such as using postal code addresses to build up flood zoning maps, there are a lot of areas that remain beyond the scope of what regulators can do.
We need both the private sector and the public sector dealing with this, said Henchoz. “I wouldn’t leave it entirely to the private sector, of course, [but] I also wouldn’t make it the government’s mandate that you lose competition.”
Looking back over the past 10 years of development, Menon said that the other area where the development of Asia’s insurance industry has fallen short is talent acquisition.
“Singapore has enhanced the insurance industry through sound regulation but needs to do more [to enhance] talent development,” he said. “We are still short of talent with good familiarity of growth markets in Asia, especially in Southeast Asia, which is a prerequisite for regional leadership roles.”
We need “a stronger industry-wide effort”, targeted at both plugging the data gaps and developing regional talent in core growth areas, said Menon.