SIRC: A virtual event in tumultuous times

When Intelligent Insurer spoke to Marc Haushofer, chairman of the Singapore Reinsurers’ Association (SRA), it was not in the expected place of a luxury hotel in Singapore. Instead, this interview was done, like so many others, over an internet connection.

That was because, for the second year in a row, the Singapore International Reinsurance Conference (SIRC) is being held remotely. That meant that Haushofer was taking part in Intelligent Insurer’s 1.1 Club, our online and on-demand platform for one-on-one interviews with industry leaders, through a screen. He, meanwhile, was looking on the bright side.

“You can reach more people,” he said from an office in Singapore. “Because of that, you can probably say that it has become a truly global event. Before, it was more of an Asian event with a large focus on Europe.

“We hardly saw anyone from the US or Bermuda. But with this virtual platform, it’s possible for our friends in the industry to be able to dial in whenever they want to attend.”

Next year, Haushofer said, would still not look like 2019, the last time that SIRC was held in person. But nor will it look like 2020 or 2021. The way forwards, apparently, will be hybrid.

“Once everything normalises again we will probably travel a bit less because we now realise that not everything needs to be done in person every time. It can also be done through a conference call like this one. In the future, we will see more and more of these hybrid events,” he said.

“SIRC is the lifeblood behind the SRA. It’s the main source of income for the SRA so we’ve been reaching out to our friends to see whether they are prepared to pay a bit to attend,” he added.

The SRA is busy with other work. Part of this is speaking with the regulator, the Monetary Authority of Singapore, and a collective approach helps in this regard, he said.

“The industry does not consist just of a few big fellows,” explained Haushofer. “A lot more are medium-sized and, even, smaller players, and many of them don’t have the ability or the manpower to take care of this.

“It’s here that the SRA jumps in and acts as a bridge between the regulator and these companies, and takes care of whatever the regulator is coming up with or wants to know.”

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Educating the industry

Education is a cornerstone of the SRA’s work. “One course we organise on a regular basis is an introduction to reinsurance. It’s not meant for a traditional reinsurer, it’s more for the administrators and people in finance, to give them an idea of which framework and in which contexts they are operating,” Haushofer said.

“Recently, we’ve been doing an introduction to insurance-linked securities and that course is very sought-after. Before COVID-19, when people were able to travel freely, we organised meetings with senior executives when they came to Singapore on a regular basis.”

Within a wider context, Haushofer spoke about the challenges facing the Asian region. “I’ve been in our business for 37 years and I don’t think we’ve had it this expensive in Asia.

“Not just in terms of nat cat severity, but in terms of frequency. At the same time, we all know about low interest rates. We can talk about past events, but we can’t compare them to the world of today. And it’s a world that’s become much tougher in many ways,” he said.

The Asian region has a notoriously low insurance penetration rate. One previous Intelligent Insurer interviewee said that in the Philippines, the culture was that people turned to family and friends first before an insurer. How can the industry might tackle such cultural issues?

“There are a lot of micro-insurance projects which allow people to get some minimal, or basic, insurance cover. Some of them turned out to be successful.

“It’s not easy, but the first concept of micro-insurance came along before the iPhone. And with almost everyone having a phone nowadays, it’s become much easier,” Haushofer explained.

Other, wider issues abound. “In recent years the average global cat losses have been giving us surprises, particularly in the last four years. They’ve accumulated way higher than we’ve seen before. It’s come to a point where the past is the past.

“Fifteen years ago, our models worked really well but things have moved on and those developing values are higher. Inflation is also kicking in and there have been some surprises in nat cat frequency and severity,” he said.

There is obviously a lot of work to be done. And being based in Singapore, in the heart of Asia, and in the position he holds, Haushofer may be in a good spot to lead that charge.

To view the full 1.1 Club interview click here