As climate change makes sure that natural disasters keep piling up, helping vulnerable societies in Asia augment their resilience becomes even more critical. We spoke to SEADRIF Insurance Company’s Mr Benedikt Signer about how the insurer is making a difference.
SEADRIF was in the headlines again recently as it presented a cheque for $3m from the Lao People’s Democratic Republic government’s parametric flood insurance policy as a first payment to help cover damages from typhoon Yagi.
SEADRIF is a regional platform that provides participating nations with advisory and financial services to increase preparedness, resilience and cooperation in response to climate and disaster risks. SEADRIF Insurance Company is incorporated in Singapore and licensed as a general insurance company to offer insurance solutions to member countries.
We caught up with SEADRIF Insurance Company executive director and board member Benedikt Signer to find out about the insurer’s development plans.
“SEADRIF is a somewhat unusual creature, like other sovereign risk pools, sitting with one leg in the public space, one leg in the private space and trying to bridge that as efficiently as possible,” Mr Signer said.
“This comes with unique opportunities, but also unique challenges, trying to get the best of both worlds and trying to avoid the worst of both worlds. The focus for the last 12-18 months was to bring in a fresh team, achieving that operational structure with the right balance between in-house and outsourced – and strengthening the core foundation,” he said.
Life after Laos
After the headline success in Laos, which countries is SEADRIF Insurance looking at next – and is there a priority order?
“Yes,” Mr Signer said. “Philippines, Indonesia, Malaysia. Malaysia is not yet a member of SEADRIF. We’re hoping they will formally join soon. Philippines is engaging very intensely right now to finalise our programme of work and then starting with Indonesia afterwards. Those are the two large markets to expand with and to figure out the right value added for SEADRIF in those markets.”
Emerging markets come with their own set of challenges.
“Other markets in the region beyond Laos, beyond Myanmar are politically challenging and have very deep institutional structures,” Mr Signer said. “They’re not a blank slate in terms of domestic industry, in terms of government programmes, government efforts.
“The challenge in the Philippines is very different from the challenges for example in Laos or in small pacific island states that are members of the Pacific sovereign risk pools PCRIC, where it’s about the pure access to an insurance product for the government. In a country like the Philippines questions are around efficient access. Is the government getting what it needs? Are we moving fast enough? Does the costing make sense so that the government feel they can trust the pricing?”
Forms of engagement
The type and level of engagement that SEADRIF Insurance has will vary by country.
“Different factors influence the right form of engagement, the right product and the right role for us,” Mr Signer said.
“The Philippines, for example, by law has a de facto monopoly. All public insurable risk has to be insured through GSIS and so - there is no expected role for SEADRIF as a direct insurer to the government.
“The role will shift to act either as a reinsurer to GSIS and provide specific product innovation or provide a support service to go to market in the most efficient manner while at the same time providing advice to government and product design,” he said.
How does Mr Signer measure SEADRIF’s impact?
“One measure is getting risk to market,” Mr Signer said. “If we see programmes, products either coming off the ground or scaling quicker to market, that’s a success. In some cases, this might involve taking risks being direct insurer. It may involve being a reinsurer or part of a reinsurance structure. This may not involve taking any risk at all.
“The second thing is when we can grow that access to markets efficiently for governments. In the Philippines, Indonesia, Laos, Vietnam, Malaysia, if that risk comes more efficiently off the ground, that can play a role to hold some of the risk diversity in place, a more efficient, diversified portfolio for reinsurance markets and then pass on those savings to our members.
“At the end of it all, it has to lead to better protection for people and better post-disaster outcomes,” he said. A