'Very few' digitalisation barriers for Singapore insurers: report

The central bank assumes a tech-agnostic regulatory approach.

There are very few regulatory barriers to digitalisation for Singapore insurers as the country is “very conducive” to digital business models, according to a report by the Geneva Association.

The Monetary Authority of Singapore (MAS) has a technology-agnostic regulatory approach through schemes such as the Financial Sector Technology and Innovation and Digital Acceleration Grants, the report said. During lockdowns, insurers could readily switch their operations to digital channels as long as appropriate controls were in place.

Another factor contributing to the country’s success is the fact that potential issues were quickly identified, facilitated by ongoing interactions between the regulator and insurers.

MAS also keeps a close eye on business continuity measures, outsourcing arrangements and capital adequacy, whilst pre-emptively raising attention to heightened cyber risk though supervisory circulars, the report noted.

Regarding distribution regulation, agents were granted a grace period to fulfill health and general insurance exam requirements which allowed them to conduct regulated activities during the period. Restrictions against selling accident and health plans over the phone were also temporarily lifted.

On the other hand, insurers’ medical exam requirements were cited as barriers during lockdowns. As medical providers had to defer non-essential health services, MAS urged insurers to find alternatives to ensure that insurance coverage and services remained available whilst managing underwriting risks.

Another barrier cited was data protection and privacy policy. For insurers, this means they need to ensure sufficient controls are in place, such as restricting access to sensitive data and implementing system access restrictions for remote staff, the report said.