The 2nd SAARC Insurance Regulators’ Meet & International Conference, expected to draw almost 500 delegates from South Asia, aims to create closer relationships among market stakeholders and provide regional solutions to local problems through mutual learning, say Messrs Faraz Uddin Amjad and Syed Irfan Habib of the Securities and Exchange Commission of Pakistan (SECP).
Globally, the business of insurance is experiencing dramatic changes that pose unprecedented challenges both for insurers and regulators. The need is to seek greater efficiency through organisational and operational restructuring, focus more strongly on core competencies, and avoid the greater financial risks and uncertainties in the minds of various stakeholders. The pace of development is prompting numerous regulatory and market reforms as there is a need to deliberate on the policy and regulatory issues to accommodate market changes and bring together stakeholders to achieve greater collaboration.
A number of studies have shown the importance of a robust insurance system for economic growth and social security of the masses. Both life and non-life insurance premiums have positive and significant effects on economic growth as these provide opportunity for long-term capital formation. Also, insurance activity contributes to economic growth by improving financial system functions, both as a provider of risk transfer and indemnification, and as an institutional investor. All these cannot be achieved without continued partnership, cooperation and collaboration of stakeholders.
Conference objectives
With this objective in mind, the SECP is hosting the 2nd SAARC Insurance Regulators Meet & International Conference on 14-16 April in Karachi, Pakistan. While the first event of this series was held last year in Bangladesh, it was proposed that Pakistan, being one of the most prominent countries in the region, should host the second SAARC International Insurance Conference in early 2014.
The event is expected to bring together more than 500 participants and experts from around the world, exchanging experiences and discussing the challenges in insurance market development, as well as exploring perspectives on emerging risks. Participants will include representatives of insurers and reinsurers, banks and financial institutions, insurance intermediaries, international development organisations, academics, policy makers and regulators.
“Local to Glocal”
The theme of the Conference, “Local to Glocal”, was carefully developed after detailed deliberations and brainstorming. Glocalisation, a combination of globalisation and localisation, denotes the adaptation of a product or service specifically to each location or culture in which it is sold, and is similar to internationalisation. While keeping the changing dynamics of the regional insurance industry, the theme is quite relevant in the context of mutual development and growth of the regional insurance industry. The same is also reflected in the overall structure and organisation of the Conference. Key areas which will be touched upon include:
• Effective risk-based supervision and insurance market development;
• Microinsurance development and its role in financial inclusion;
• Catastrophe insurance and disaster risk financing;
• Role of insurers in financing infrastructure investment;
• Effective and efficient ways of regulatory compliance;
• Political risk insurance and its role in supporting foreign direct investment and trade;
• Significance of adequate reinsurance coverage;
• Role of donor organisations in insurance market development;
• Learning from the best insurance supervision models;
• Opportunities and challenges in takaful market development; and
• Technology and alternative distribution channels.
Sideline activities
On the sidelines of the Conference, a roundtable of insurance regulators and development organisations will be held to discuss the challenges and opportunities in the insurance regulation, and how to increase the regional collaboration for effective market development.
A pre-conference exclusive workshop is also being organised with the support from the Asian Development Bank (ADB), covering the topic of “Promoting Proportionate Regulation and Risk-based Supervision”, and sub-topics including IAIS Insurance Core Principles on solvency and related issues, the application of proportionality in practice, calibrating risk-based capital requirements and supervision, and enterprise risk management.
The international event is the result of a partnership between the SECP, the World Bank and the ADB, and is aimed at providing knowledge and increased collaboration among local and regional insurance market stakeholders for enduring advancement.
Opportunities to network
The Conference is specifically designed to provide a unique opportunity to network with participants from across the region. There will be “live” plenary sessions and dynamic debates, knowledge exchange opportunities with regional counterparts, and partnership-building opportunities. With more than 50 participating companies and more than 35 panellists and speakers, the Conference is a must-attend event for regional insurance supervisors and market participants who are not only interested in expanding their market footprint but also look forward to more relevant regional solutions for their local problems.
The Conference is expected to receive a diverse audience from the region as well as other developed and developing countries, including but not limited to regulators, insurers, reinsurers, insurance brokers, bankers, telecommunications operators, consultants and advisors, providing them the opportunity to understand the latest developments and turning bright prospects into reality.
Showcasing Pakistan
The Conference will also showcase the resilient and rapidly growing insurance market in Pakistan with business and investment opportunities for regional and foreign players. According to the last reported annual financial figures of 2012, the country’s premiums totaled over PKR154 billion (US$1.5 billion) with annual growth rate of 17%, while insurance penetration and density reached 0.93% and $7.70, respectively, from the 0.82% and $7.22 reported in the previous year.
The insurance market in Pakistan is fairly liberalised as 100% foreign ownership and control of insurance companies are permitted, with paid-up capital requirements of $4 million, with the condition of bringing in at least a minimum of $2 million in foreign exchange and raising an equivalent amount from the local market. Minimum capital requirements have been increased in phases, though they remain attractive at PKR300 million for non-life and PKR500 million for life insurers.
The economy of Pakistan is the 27th largest in the world in terms of purchasing power parity (PPP), and 44th largest in terms of nominal GDP. PPP-adjusted GDP per capita was approximately $2,900 in FY2013. The finance and insurance sector contributed 5.2% in the overall services sector in FY2013 and recorded a growth of 6.6% in FY2013, against 1.0% recorded in the preceding year. With a fast-expanding consumer base of more than 180 million population, there is a huge potential in the financial services market, including insurance. The interest of foreign investment in the financial sector remains encouraging, with nearly $1 billion of foreign direct investment recorded in FY2013 in the financial sector of Pakistan.
Details of the Conference can be found at www.saarcinsuranceconference.com and registration can also be done on this website. Details can also be found at the Facebook, Twitter and LinkedIn pages of the Conference. The SECP and the Conference organising team looks forward to welcoming speakers and participants to the Conference.
Mr Faraz Uddin Amjad is a Joint Director, and Mr Syed Irfan Habib is an Assistant Director, with the SECP.