Insurers have US$328 bln gap in uninsured CAT losses to fill
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The global insurance industry experienced US$107 billion in insured CAT losses in 2011, but this was far from the $435 billion economic losses that disasters cost last year. This poses a long-term challenge to insurers on how they could fill the $328 billion gap in uninsured losses and encourage risk transfer through insurance, said Dr Richard Ward, Lloyd’s CEO, at the 12th Asia CEO Summit in Singapore. He noted that like 2011, 2012 is a challenging year for the industry as it faces pressure both in premiums and investment income amidst the threat of another recession in the West and economic slowdown in various parts of the world. Chris Townsend, President & CEO, Asia Pacific Region of Chartis, highlighted the need to educate industry stakeholders like governments of the various roles insurance can play in society.

He urged the industry in Asia Pacific to use its recent CAT experiences, which he said had raised awareness of insurance, to distance itself from the banking sector and promote the “brand insurance” in order to attract more talent into the industry. He called upon insurers to collectively reach out and commit time, money and leadership to ensuring a flow of talent into the industry, particularly in Asia’s emerging markets. On the question of what indicators CEOs have on their dashboards, Vincent Vandendael, Zurich Financial Services’ CEO, Global Corporate Asia Pacific, said that it is equally important for insurers to have indicators that tell them what not to do and not to write. Leslie Mouat, Chairman & Head of Distribution, Asia Pacific at Chartis, said that there is no one dashboard that fits all, adding that a CEO has to make sure risk is priced properly and distribution is done right. Joydeep Roy, CEO of L&T General Insurance, he looks at what shareholders want and at his company’s underwriting profit versus set benchmarks.

Praveen Gupta, CEO & Managing Director of Raheja QBE General Insurance, said that in benchmarking for success, he looks at people, products and processes, while Vandendael said his company measures success by its shareholders, customers and employees, with each having its own benchmark. Organised by Asia Insurance Review together with The Geneva Association, the 12th CEO Insurance Summit in Asia attracted more than 130 delegates from 22 countries. It was supported by the International Insurance Society and Singapore’s General Insurance Association and Life Insurance Association, and sponsored by Chartis, A.M. Best, HSBC Insurance, Labuan IBFC and Zurich. The Summit provided an ideal platform for top officials of various insurers/reinsurers to interact with their peers and from other parts of the world.