##uance of catastrophe bonds have grown strongly and total catastrophe bonds outstanding reached a new high of almost usd 30 billion as at the third quarter of this year. this is despite the persistent reinsurance headwinds of excess capacity and depressed rates. 13 catastrophe bonds present unique benefits to reinsurers : they provide multi - year capacity and pricing certainty ; they are more secure due to their fully collateralised nature and ability to be rated ; they are a good alternative to traditional reinsurance for risks that are hard to model ; and they are capital - efficient. 14 to an investor, catastrophe bonds proffer strong benefits too : their low correlation with the 2 / 4 bis central bankers'speeches financial markets make them an effective asset diversification instrument ; they have low volatility and stable returns ; they provide liquidity ; and they can be issued via private placements or as tradable securities. 15 we are therefore seeing a growing cluster of institutional investors and fund managers like quantedge exploring allocation into catastrophe bonds, as they venture into niche and specialised strategies to extract better risk - adjusted returns. 16 on the supply side, we too have seen healthy interest from asia - pacific issuers in the development of an apac market for catastrophe bond issuances, due to the proximity to and better understanding of the underlying risks. 17 given the above, the mas has thus taken progressive strides towards developing the catastrophe bond market in singapore. 18 as a first step, we have formed an alternative risk transfer work - group comprising industry experts in the ils space. chaired by jon paradine of renaissance re, the work - group advises the mas on specific initiatives that will support the development of singapore as an ils hub. 19 today, i am happy to announce one such initiative – the newly created ils grant scheme. to catalyse the development of singapore ’ s ils market, the mas will fund 100 % of the upfront costs incurred in issuing catastrophe bonds out of singapore. this grant will run from 1 january 2018 and will be applicable to ils bonds covering all forms of risks beyond just natural catastrophe risks. 20 it is my hope that this grant scheme will encourage insurers and reinsurers to consider issuing a catastrophe bond here. in fact, mas is already working with key industry players such as iag re singapore with a view to issuing a catastrophe bond in singapore. this is but the first step of a longer journey, as we look forward to working more closely with the industry to further

liability. this is particularly relevant for asia as industrialisation and infrastructure investments in this region will propel demand for insurance solutions to mitigate construction and project cargo risks. we have established a group of interested lead and follow markets in singapore to offer coverage in these two lines. the markets comprise leading insurers, reinsurers and lloyd ’ s syndicates operating in singapore. we look forward to the industry ’ s active participation in this bold venture. conclusion 29 ladies and gentlemen, insurance is fundamentally about risk management. as the region around us continues to grow, the insurance industry can support this growth and development by creating relevant risk management solutions that can pave the way for a broader range of corporates and investors to participate in its growth. 31 the two strategies of ils and public - private partnerships that i have highlighted earlier mark the metamorphosis of singapore ’ s reinsurance industry as we transform from a mainstream traditional reinsurance hub, to a sophisticated full - fledged global capital for asian risk transfer. 32 i invite you to be a part of this metamorphosis, as we chart new paths together in this journey that singapore is embarking on. 33 thank you very much. 4 / 4 bis central bankers'speeches