During an unveiling ceremony for the new Allianz hub this week, Singapore Monetary Authority’s head Ravi Menon used the occasion to hail the new district as the country’s “own version of London’s Leadenhall Street”.
Other tenants within the development’s Towers 2 and 3 include DBS Bank, Macquarie, and Barclays.Regus, the serviced office provider has also taken up 16,000sq ft of space in the third tower.
The MAS managing director compared the German insurance firm’s own story to that of Singapore’s development as an insurance specialist. “Just ten years ago, the insurance industry in Singapore was focused on writing pure domestic risks. Singapore has now developed the capacity and expertise to underwrite large and complex risks across Asia.
“With the opening of Allianz’s new office here, Asia Square is also shaping up to be Singapore’s own version of London’s Leadenhall Street, where many prominent insurers and brokers are located.
“Such physical co-location will help to promote greater exchange of ideas and collaboration, and create an insurance marketplace that is committed to deliver customised and innovative solutions.”
Menon predicted that a growing middle class and rising affluence would underpin a steady increase in insurance penetration rates in Asia. “Over the next decade, insurance business in Asia is projected to grow at about 8% per annum,” he said.
“By 2020, Asia is likely to account for almost 40% of the global market.” He added that continued industrialisation, growing trade activities, and infrastructure development would mean greater demand for insurance solutions to mitigate a variety of risks.
“It is vital that insurers seeking to expand in Asia have a deep understanding of Asia’s risk landscape,” he said.
“Aggregate exposures have grown steadily in Asia, due to rapid urbanisation and economic growth over the last two decades. Asia’s strong record of development means that we have more to lose from unforeseen calamities.”
He added that events such as the Tokyo earthquake and tsunami, Thai floods and New Zealand earthquake acted as reminders of why the industry had to constantly stay ahead of the risk management curve.
Menon said that Singapore must deepen its underwriting expertise in reinsurance and specialty insurance with an Asian focus. He added that the global insurance industry continued to face pressure from weak economic growth, soft pricing and persistently low investment yields.
“Insurers can no longer rely on investment income or rate increases alone, to compensate for weak underwriting,” he said.
“Likewise, even as Singapore’s insurance industry diversifies the span of its activities to include capital markets, it must continue to stay focused on core competencies in underwriting insurance risks. High underwriting standards are critical for sustainable growth.”
Allianz divisions that will be moving to the hub in November include Global Assistance, Global Corporate and Specialty, Global Reinsurance, Global Investors, Capital Partners, Real Estate, Managed Operations and Services, and Global Automotive Business.
Manuel Bauer, a member of the Allianz SE board of management and responsible for insurance growth markets, added that the company’s move – which will take up three floors over Asia Square Tower 2 – represented a firm commitment to serving the fast-growing Asian market.
