Damage in Myanmar from Devastating Cyclone Largely Uninsured
The international insurance market is likely to be little affected by Cyclone Nargis, which ravaged Myanmar a fortnight ago, according to the US-headquartered modelling firm, Risk Management Solutions (RMS). Domenico del Re, senior model manager at RMS, in a statement, said: "This event is a massive humanitarian disaster. However, it is a catastrophe that the international insurance industry has escaped. Insurance is greatly underdeveloped in Myanmar, with no international insurance brokers operating in the area and non-life premiums of barely $5 million in 2004. Given the isolation of the country, international investment in Myanmar is also very limited. The most significant foreign interest in the region is a large gas field in Yadana, which generates millions of cubic feet of gas a day and is close to the path of the cyclone, but it is not yet known whether the production has been interrupted. Disasters such as these should be taken as a wakeup call to the global insurance industry, as companies extend their portfolios outside areas where the understanding of risks and their quantification is well-established."
eWeekly Asia, Vol VIII Issue 19, 12 May 2008

Asia: CFOs Facing Significantly More Complex Challenges
The increasing number of financial woes such as those that brought an end to Enron, WorldCom and others, as well as the recent sub-prime crisis that has resulted in significant losses to many well regarded financial institutions, have caused heightened investor scrutiny and the need for stronger corporate governance in ensuring the financial soundness of corporations. This in turn has turned the spotlight on the role of CFOs, bringing them into a new position of responsibility alongside the CEOs, said Mr Low Kwok Mun, Executive Director, Insurance Supervision, Monetary Authority of Singapore during his keynote address at the 2nd Asian Insurance CFO Summit held last week in Singapore that attracted some 150 delegates from 21 different countries. Citing audit and consulting firm Deloitte, Mr Low said the CFO has four critical roles, namely steward, operator, strategist and catalyst. These involve financial control and risk management; ensuring operations are done in the most cost-efficient manner and charting business directions with financial strategies.
eWeekly Asia, Vol VIII Issue 19, 12 May 2008

Reinsurers Stand Firm in Asia in April Renewals
While property catastrophe reinsurance rates decreased globally during the 1 April 2008 renewal period, Asian cedents were less successful at extracting reduced rates from reinsurers than their more aggressive counterparts in the US which managed to win significant reductions, according to a report by Guy Carpenter & Company. In its review of annual reinsurance market conditions at the 1 April renewal period, Guy Carpenter notes that while cedents pushed hard for rate reductions in Asia, reinsurers stood firm, with rates in general already close to technical levels. "Most of the rate decreases witnessed in Asia were therefore in the single digits," says the report. It cites, for instance, that rates across each line in Japan generally decreased from 5%-10%. In Korea, reductions were as high as 20%.
eWeekly Asia - Vol. VIII No. 17, 28 April 2008