Post on 11-Dec-2015
TAPPING THE OPPORTUNITIES OF HAVING A FLAG REINSURANCE COMPANYTOWARDS ASEAN
ECONOMIC COMMUNITY
Bali, Indonesia
October 2014
Contents: Opportunities for Flag RI in Asean Economic Community
1. Flag RI v global/regional RI? Defined by Purpose and Role
2. Flag RI and ASEAN Integration
3. Opportunities: roles for Flag RIs
“WHEREAS, it is the policy of the nation to promote and develop a strong national insurance industry and to provide for its integration in the country's economic and social
development;”
For Emerging Markets, the Flag Reinsurer’s reason for being: to protect local policyholders.
One risk in Emerging Markets: flight of foreign capital during times of crisis at Corp HQ.
What would happen to Hungarian policyholders if all foreign reinsurers leave?
To Mexican depositors if all foreign banks leave?
Even temporarily?
THESIS
To protect policyholders from flighty capital it is prudent for a flag reinsurer to
develop and use knowhow and capital to support locally owned insurance firms
to be sustainable going concerns so that they are not dependent on protectionist
legislation to thrive and serve the public.
Source: Presidential Decree 1270, Republic of the Philippines
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What do a centre midfielder, a quarterback and a point guard have in common?
Type Flag Local Regional Cat Global
Diversification Lo Lo Med Med Hi
Scale Lo Lo Med Med Hi
Access to RI Talent
Lo Lo Med Hi Hi
Developmental Mandate
Hi Med Med Lo Lo
Access to Govt
Hi Med Med Med Med
Access to Trade Assn
Hi Med Med Med Med
Access to Development Agencies
Hi Lo Med Med Med
1. Flag RI v global/regional RI? – Playmaker to protect local policyholders
2. Flag RI and ASEAN Integration
3. Opportunities: roles for Flag RIs
Contents: Opportunities for Flag RI in Asean Economic Community
How does a flag reinsurer help local companies who now have 620M local customers?
Source: Key Indicators 2014, ADB
AEC Strengthens ASEAN without isolationism
1. ASEAN operates in an increasingly globalised environment, with interdependent markets and globalized industries. ASEAN must therefore look beyond the borders of AEC and consider regulations outside the region in forming policies related to AEC, including the adoption of international best practices and standards in production and distribution.
2. This will be critical in enabling businesses in the region to compete successfully in global markets, achieve production objectives to become key global suppliers and ensure the ASEAN market remains attractive to foreign investors.
Source: Introduction to the ASEAN Economic Community in ASEAN Economic Community Handbook for Business
Flag RI Supports Competitiveness: Global Competitiveness Index 2014-15 Rankings
Source: http://www.weforum.org/reports/global-competitiveness-report-2014-2015
1. Flag RI v global/regional RI? - Purpose
2. Flag RI and ASEAN Integration
3. Opportunities: roles for Flag RIs
a. Facilitator for industry initiatives
b. Best Practices Consultant to local risk carriers
c. Expert on Country-Specific risk
Contents: Opportunities for Flag RI in Asean Economic Community
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3a: Facilitator for industry initiatives
Flag RI as Playmaker
for
Cat Pool
Regulator / Gov’t
Trade Association
Development Finance
Corp
Global RI community
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3b: Best Practices Consultant to local risk carriers
Transparency to CUOs / Capital
Owners: industry LoB portfolio pricing, Cat
Aggs, Capital modeling
Technical Talent
Software/Hardware
tools
Data Warehousing
UW Process Knowhow
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3c: Expert on Country-Specific risk
Data consumers
Algorithm writers
Commercial Data
Providers
Public & Private Data
Owners