Shanghai’s Pudong area became a focus of insurance activity yesterday as the revamped China Rendezvous 2019 ushered in a ‘brave new era of reinsurance in China’.
China Re P&C assistant general manager Wang Zhongyao kick-started proceedings with an expansive opening address on the development of CAT models in China – and how these models will help build resilience in China’s economy.
China, said Mr Wang, has suffered a growing number of Nat CAT events over recent years – ranging from earthquake to rain storm to typhoon – and he predicted that already events in 2019 “will bring huge economic loss” to China. The dilemma, he said, was that “fast-growth in CAT exposure has still not led to higher insurance penetration.”
China Re has positioned itself at the centre of China CAT-modelling as the regional director for the China Earthquake Co-insurance Pool and aims “to help pricing and loss estimation” of catastrophe events through the development of the China Re CAT Risk Platform. This allows for map visualisations, spatial data processing, spatial analysis and spatial information queries.
Mr Wang outlined the need for “an open platform for the whole industry” and indicated that China Re had already launched version two of its earthquake model and as well as version one of its typhoon and flood models. “We can build and iterate a CAT management platform to deal with the challenges brought by more disasters,” he said.
Overwhelming need for new talent
International Insurance Society president and CEO Michael Morrissey spoke next and said, “The future potential is what makes China so fascinating. The industry is still at a very early stage of maturity.” He then went out to remind the audience that according to Swiss Re estimates, China would overtake the USA as the biggest insurance market in the world by 2030.
Future issues, he said, included cyber, healthcare access, digitalisation of the customer experience and regulation – but the burning issue was “the emerging issue of talent development.”
“For many young men and women, a career in insurance may not appear to be very exciting,” Mr Morrissey said. “But we can’t make an industry out of what’s left. Talent has to be our number one priority.”
Flux and mutability
DXC Technology global head of reinsurance Kent Chaplin built on this theme when he looked at “The future of reinsurance and how we need to reimagine it to be able to survive in the future.”
His presentation focused on the changing nature of the market – convergence of insurers and reinsurers and the influx of new capital in the shape of ILS and CAT bonds. “Reinsurance has become an asset class in its own right. Alternative capital is here to stay – even with the recent massive losses,” he said.
The China Rendezvous continues today at the Kerry Hotel Pudong, Shanghai – organised by Asia Insurance Review and sponsored by DXC Technology, Singapore Re, Munich Re, Fairfax and HSBC Life.