Page 14 - AEC Digital Edition
P. 14
locally. Lastly, we have seen great success in businesses regulators would be able to ensure a level playing field
using online benefits platforms to deliver services and amongst insurance service providers and, at the same time,
solutions to their employees quickly and cost efficiently. establish and enforce best practices so as to strengthen
and improve the overall presence and reputation of the
Insurer Lens – How to take advantage of insurance service providers.
a more integrated business, capital and
regulatory environment? How should ASEAN member states strive to
achieve regulatory harmonisation?
Financial Services integration has been limited,
naturally given its importance as a key pillar in the stability Recognising the differences in domestic demands
of a national economy. Liberalisation in this sector has and current-state infrastructure, ASEAN members
been shielded under Free Flow of Services provision to could potentially first work on identifying the areas of
allow countries to liberalise according to each country’s commonality and the areas where there are clear demand
readiness. However, cross-border flow of capital will not gaps. For the lines of insurance practices that are common,
be fully achievable without the opening of the financial a uniform minimum standard could be applied across all
services sector, including capital markets, banks and ASEAN members so that insurance service providers can
insurers. better focus on customer service. Where there are demand
gaps, AEC could play that role of encouraging resources
How should insurers in less economically from the more sophisticated markets to participate in those
developed countries cope with competitive lesser developed markets and to provide market guidance
pressures from an influx of large and well- through that process.
capitalised foreign insurers?
How should regulators in ASEAN import best
Similar to non-financial companies, domestic insurers face practices not only from each other, but also from
growing competitive pressure as foreign capital compete outside of ASEAN to establish a more vibrant
for the same set of risks within a market. Whilst insurance regional insurance market?
markets tend to be more regulated or protected than say
the hospitality industry, foreign carriers are increasingly Similar to banking regulators and central banks, insurance
extending their coverage throughout the region. Local regulators routinely engage with their counter parts from
insurers are best protected when they boost their capital neighboring countries as well as further abroad. We
position to ensure financial soundness, and invest in strongly encourage continuation of such practices to ensure
understanding their client’s needs better than the newly ASEAN member countries strengthen the foundation of the
entered foreign players. domestic insurance market to facilitate the growth of the
real economy.
How should insurers assess overseas expansion
opportunity within ASEAN? In competing with the mega-economies of the US, China
and the EU, ASEAN member countries may not be able to
Conversely, entering a protected market may be slow (and achieve that individually. Hence, the sooner AEC is able
not possible for some of the markets at present). Local to establish that voice representing the region, the more
insurers with cross-border ambitions need to study the prominent and effective it may be in finding its voice on
full array of costs of entry: capital requirement, fixed the world stage.
operating costs, and distribution costs. It may be possible
that partnering with an international broker, as well as Authors:
potentially local capacity providers are better options than Marshall Lee
a direct organic entry. Head of Strategy & Business Planning
Marsh Asia Pacific
Regulator Lens – How should regulators
help facilitate the integration effort? Douglas Ure
Practice Leader
While the ASEAN Economic Blueprint was Marsh Risk Consulting Asia
adopted as a regional initiative, implementation rests
within the hands of multitude of government agencies and Joan Collar
bureaus. National application of policies to systematically Employee Health and Benefits Regional Leader
remove barriers will inevitably clash with financial Marsh Asia
regulators’ mandate to shield the domestic market from
excess turbulence. Thus the role of regulator is critical in Matthew Simmonds
achieving balance. Multinational Leader, Asia Pacific; Risk Management
Leader
What should be the role of insurance regulators? Marsh Asia
Insurance regulators are pivotal in providing a structured Jonathan Tan
and safe infrastructure for insurance related service Chief Risk & Compliance Officer
providers to (a) innovate and introduce market relevant Marsh Asia
products and, (b) serve and protect consumers through
their policy making and supervision.
By way of active guidance and supervision, the insurance
12 AEC – IMPACT ON INSURANCE • DECEMBER 2015 Back to Contents
