SINGAPORE - Trade and Industry Minister Lim Hng Kiang has called on regulators in South-east Asia to work together to develop the regional insurance market.
This is important as the Asean Economic Community (AEC) is expected to become a single market by 2015, bringing great opportunities with a population of over 600 million and a combined gross domestic product of US$2.4 trillion (S$3.1 trillion).
To develop the nascent regional insurance market, regulatory harmonisation will help in the process, said Mr Lim at the inaugural Asean Insurance Summit held on Wednesday at Marina Bay Sands.
"Achieving greater consistency in regulatory frameworks within Asean will give markets participants greater clarity and assurance on the provision of cross-border insurance services and give consumers more confidence in taking up insurance protection," he said.
Mr Lim added that disparities in regulatory standards across Asean will hinder the development of competitive insurance markets, raise the cost of cross-border services.
Countries must also press on with efforts to free up trade in financial services to raise its attractiveness as a market, he pointed out.
Mr Lim also noted that Asean economies are under-insured and would need better protection for their assets.
Asean's insurance penetration rate stood at around 3.4 per cent last year, about half the global average of 6.3 per cent, according to a report by insurance firm Swiss Re.
The region is also vulnerable to increasing incidence and severity of natural catastrophes as floods in Thailand and the Philippines being hit by Typhoon Haiyan have shown.
Mr Lim said the insurance gap can be closed through awareness, capacity building, co-operation and liberalisation.
He also suggested three areas of focus for the insurance industry, namely maritime, aviation and transport insurance, catastrophe insurance, and reinsurance.