The insurance industry here must adapt to meet the demands of emerging technology such as autonomous vehicles and address the threat posed by cyber security risks, National Development Minister and Second Finance Minister Lawrence Wong said yesterday .
He was speaking at a dinner at the Raffles City Convention Centre to mark the 50th anniversary of the General Insurance Association (GIA).
Mr Wong said the industry continued to expand, with total onshore and offshore premiums growing at about 7 per cent a year to reach almost $7 billion last year. However, there was a need to develop insurance solutions for "new and emerging risks", including cyber attacks, he said.
"Cyber attacks are real and they cost the global economy more than $400 billion a year," he said, citing the recent attacks on StarHub's broadband network as an example.
He said that this presented a "huge market opportunity" as traditional insurance did not adequately cover businesses against such risks, and that the Monetary Authority of Singapore (MAS) was working with partners to deepen knowledge and expertise in this area.
Said Mr Wong: "Work has begun to standardise policy definitions, gather cyber loss data and develop cyber loss scenarios to better understand insurers' exposure to cyber risk, as well as enhance the relevance of insurance coverage."
He also said the emergence of autonomous vehicles could provide opportunities for the insurance industry.
"Would breakthroughs in driverless technology make driving safer and would that contribute to lower motor insurance premiums?" said Mr Wong, adding that the technology could also lead to new liabilities and new forms of insurance coverage.
He praised the GIA for taking the lead in engaging autonomous vehicle manufacturers on the opportunities and challenges posed by the new technology.
There was also a need to grow the pool of insurance talent here, Mr Wong said, citing several initiatives by the MAS on this issue, including working with the Nanyang Technological University to produce more risk management and insurance graduates.
He also identified the creation of the Financial Sector Tripartite Committee and the co-funding of the Singapore College of Insurance as efforts that could provide insurance professionals with the skills necessary for the evolving financial landscape.