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Singapore hub expansion ‘increases exposure’

Offshore gross insurance premiums in Singapore have quadrupled in the past 13 years, according to Standard & Poor’s (S&P).

A helpful regulatory and business environment, plus strong economic growth in Asia-Pacific, has driven the industry.

“We believe premium volumes will grow in property and catastrophe risks and specialty lines in Singapore’s offshore insurance hub as the country enhances its tax-exemption scheme for offshore insurance businesses.”

However, the ratings agency warns growth in insured assets has also increased catastrophe exposure.

Outdated catastrophe models, growing capacity and competition and weakening underwriting standards could result in significant losses.

A more sophisticated Singapore insurance industry will increase penetration and provide profitable growth and diversification for insurers and reinsurers, S&P says.