Four of the top five brokers in the world have their regional hubs in Singapore. Today, brokers are not just intermediaries, but also high-value service providers who drive innovation and collaboration in the industry. •  Many brokers provide a wide range of risk management services. These include dynamic financial analysis, risk management and actuarial consultancy, portfolio and financial modelling, and catastrophe modelling. •  Some brokers have also begun to tap alternative risk transfer solutions to manage more complex and larger risk exposures and liabilities. We are keen to encourage brokers to use Singapore not just as a placement centre, but also as a centre of excellence for innovation. •  A good example of this is Aon, which recently established its Analytics and Innovation Center in Singapore to provide analytics solutions to the Group’s business units on a global basis. Second, encouraging a subscription market. To underwrite large and complex risks, insurers need to collaborate. Risk sharing enables market participants to diversify their portfolios. We want to promote a true subscription market, where insurers not only share risks, but also expertise. The subscription concept leverages both the deep expertise of the lead insurer and the supporting capacity of the other insurers to cover a variety of large and complex risks. 4  BIS central bankers’ speeches  Such deep collaboration requires contract certainty. Contract certainty ensures the finalisation of terms and conditions of the policy prior to inception of risk and therefore, serves to minimise ambiguity and disputes over claim and coverage.

Ravi Menon: Singapore as a global insurance marketplace Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the 12th Singapore International Reinsurance Conference, Singapore, 6 November 2013. *  *  *  Distinguished guests, ladies and gentlemen, good morning. Asia’s changing risk landscape These are interesting times for the insurance industry. The operating environment has become more challenging. •  Underwriting results are being pressured by a combination of sluggish economic growth, softening rates, and rising claims. •  Investment returns are being depressed by the low interest-rate environment. In Europe, for instance, returns on long-term safe assets are at their lowest since the creation of the European Economic and Monetary Union. •  Regulatory and capital requirements are being tightened as the world shifts toward risk-based regimes like Solvency II. At the same time, the growth potential has never been better. At a time, when questions are being raised globally as to whether the financial industry has grown too big, no one is asking the same of insurance. Much of the world remains under-insured. The prospects in Asia are especially bright. The Asian risk landscape is transforming rapidly, generating robust demand for insurance and re-insurance. •  Over the next decade, the insurance business in Asia is projected to grow at about 8% per annum. •  By 2020, Asia is likely to account for almost 40% of the global market. There are three large factors driving insurance demand in Asia. First, Asia is growing.