Page 3 - AEC Digital Edition

EDITORIAL FOREWORD

AEC a reality no matter what the doubting is washing upon most shores, both for the developed and
Thomases say emerging economies in ASEAN.

I have seen the tempo pick up in just the past two years There are real thought-leadership papers floating on
alone and AEC has become a common acronym that rolls how AEC will help governments better manage risks on
smoothly off the tongue of businessmen keen to tap a a region-wide basis. The business councils and academia
market of 620 million people with a combined GDP of are on board with the idea of regional integration, even in
US$2.5 trillion. insurance despite its technical specificities and need for
regulatory intervention to ensure policyholder protection
Everyone with a vision to the future is looking to have an as the promise is to pay on a future date.
“ASEAN” policy. And this is happening more significantly
among the players outside the region than those within There is already talk of a common motor policy,
ASEAN. Many raise their eyebrow sceptically at the level regional coverage of marine and aviation risks as well as
of ASEAN-ness or ASEAN spirit or demand for an ASEAN insurance protection for goods and services that are traded
product. Some point to the different development status internationally. MNCs in the region already have their own
and standards of living in each of the individual ASEAN in-house ASEAN policy too.
markets from Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, Philippines, Singapore, Thailand and Vietnam There is growing awareness and grudging acceptance
as an obstacle. But that will pass. ASEAN was first 5, then that nationalism and jingoism aside, a regionally stronger
6 and now a United 10. And the ASEAN Heads of State have ASEAN insurance industry that is open can offer better
publicly committed to launch the AEC by 1st Jan 2016 to choices to consumers and even lessen the burden on
foster economic integration that will boost the competitive governments in coping with extreme CAT exposures. And
edge of the region and promote the free flow of goods, the list of benefits goes on. So there is increasing excitement
capital and services through-out ASEAN. in the air as the governments, businesses and public start
totalling up the plus-minis list of AEC.
Insurance is In
And we at Asia Insurance Review having being appointed
Though insurance is not the primary target of AEC, in as the Permanent Observer of ASEAN Insurance Council
reality, insurance is so embedded in all sectors of business since 1991 with the mandate to boost the public image
and economy that nothing moves without insurance being and profile of the AIC using our strength as media, have
involved. Hence the insurance industry will see a bigger decided to produce this AEC in Insurance Supplement
impact with the launch and actual realisation of AEC, even if to commemorate the launch of AEC. This is only the first
it takes another five or 25 years. The mantra is to start with gingerly step.
two-plus one or more and slowly move to get all 10 on board!
But I am confident that with AEC, the region will grow
I have started to see it happening on the ground. At the in leaps and bounds and realise that it is the fears and
latest ASEAN Insurance Regulators’ Meeting held in Phnom suspicions that stand in the way of ASEAN realising its
Penh in October 2015, the host country’s Finance Minister full potential of exploiting the Grace of being together in a
even offered the dream of a speeded up harmonisation geographically strategic location on the world map.
of insurance regulations to make a single ASEAN market
within the visibility range. Not a mirage that will fade in It is a dream that is soon becoming a reality.
time as you get nearer but something that can be realised Sivam Subramaniam
with commitment and strong political will. Editor-in-Chief,
Asia Insurance Review
ASEAN in Numbers

Even without the AEC, ASEAN is a force to be reckoned with
in the insurance world. There are more than 500 players
in the ASEAN market which according to sigma figures
accounted for almost US$90 billion in terms of premiums
in 2014, and this was triple the amount of that just 10 years
ago.

But its share of the global premium pie is still small at
1.86% though it accounts for 8.6% of world population. Life
is almost 64% of the total insurance business in ASEAN. And
in terms of GDP penetration, the insurance industry has
not kept pace with ASEAN’s powerful economic growth. It
has fallen by 0.05 percentage points compared to 10 years
ago to 3.32%.

Promises Galore

Figures aside, the mood is promising though some
governments will want to protect their domestic players
and get them beefed up before fully opening the market to
all of ASEAN. But the tide of liberalisation with its promises

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