A corroborative effort involving both public and private sectors, through a public-private partnership, is key, especially in Asia. This is in light of the large size of risks to be insured, the substantive size of population which needs insurance cover but remains unreachable, and the lack of natural incentives for the private sector to offer sufficient coverage for certain risks. A PPP approach recognizes the different roles as well as limitations of governments and private insurers, and can enable innovative solutions collectively. Public-private financing solutions, such as natural catastrophe insurance pools, micro insurance, and alternative risk transfer solutions such as catastrophe bonds, have the potential to enlarge the financial capacity of insurance solutions, by providing affordable cover to a wider pool. With the expertise and capital  BIS central bankers’ speeches  3  support from international and regional organisations, the public and private sectors can work together in developing purposeful risk transfer solutions for the region. 12. It is encouraging that governments, regulators, industry, academia and international organisations in Asia have already taken initial steps to develop effective PPPs to enhance natural catastrophe risks management. In October last year, for example, the International Finance Cooperation (“IFC”), a member of the World Bank Group, announced a partnership agreement with MAIPARK Indonesia, a specialised catastrophe reinsurer formed by the government and industry, to develop an earthquake-index insurance product to help protect banks that provide loans to individuals and micro, small and medium enterprises from losses due to natural disasters such as earthquakes6.

Jacqueline Loh: Public-private partnership – the way forward for natural catastrophe risk management in Asia Opening address by Ms Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore, at the 5th Institute of Catastrophe Risk Management Symposium, Singapore, 24 April 2014. *  *  *  Professor Bertil Andersson (President, Nanyang Technological University, Singapore), Professor Haresh Shah (Founding Chairman, Institute of Catastrophe Risk Management (“ICRM”)), Professor Pan (Director, ICRM), Distinguished guests, ladies and gentlemen, good morning. Introduction 1. It is my pleasure to join you today at the 5th ICRM Symposium. The theme for this year’s Symposium, “Financing of Natural Catastrophes in Asia – The Role of Private Sectors, Governments and Regulators in Natural Catastrophe Management”, highlights the importance of having both the private and public sectors collectively manage natural catastrophe risks. Management of catastrophe risks spans a spectrum of activities across the entire risk management value chain, from raising risk awareness, to promoting effective risk assessment and pricing, and co-developing ex-ante risk financing solutions. This is a very relevant discussion topic, at a time when Asia is facing increasing vulnerability to natural catastrophes. 2. In keeping with the conference theme, I will be sharing a few observations on how we can strive towards sustainable risk financing using a Public-Private Partnership (“PPP”) approach. Asia is more at risk from natural catastrophes 3. 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 disasters1.