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

4

GAME: NAME THIS ATHLETE

5

GAME: NAME THIS ATHLETE

6

GAME: NAME THIS ATHLETE

7

GAME: NAME THIS ATHLETE

8

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

Top Economies by 2050

Source: HSBC’s The Wider World in 2050

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

15

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

17

3c: Expert on Country-Specific risk

Data consumers

Algorithm writers

Commercial Data

Providers

Public & Private Data

Owners

THANKS FROM NRCP

Bali, Indonesia

October 2014