Relational urban geographies of re/insurance 149
the first ILS issuance in Singapore (Interview 2019-A). Legal frameworks
were retooled to accommodate a new offshore special purpose reinsurance
institutional structure, while regulatory structures were revised to make
oversight and compliance streamlined and cost-effective for issuers and
investors. An array of specialist professional services providers (brokers,
lawyers, actuaries) had to be recruited or trained. A new state-funded grant
scheme was launched to attract issuers, and to offset the ‘frictional’ costs
of issuing a transaction in unfamiliar territory. Asian regional investment
managers had to be thoughtfully introduced to this new asset class and
courted for future deals.
First Coast Re and the transactions which followed represented a crucial proof of concept, a symbolic and strategic ‘practical accomplishment’ (Fields 2018) within a larger play to cultivate an expanded role of
Singapore as a broker within global catastrophe risk finance circuits. First,
the growth of catastrophe re/insurance and risk finance-related services is
seen by aligned actors as a means to extend and secure the scope and scale
of Singapore’s international finance centre. Financial services comprise an
increasingly important driver of Singapore’s unique state-capitalist economic development model (Olds & Yeung 2004; Chua 2017), growing from
4.6% of Singapore’s GDP in 1965, to 12.3% by 2016 (Lai 2018, p. 154). Re/
insurance is one of several financial subsectors which have registered state
investment in recent years (Lai & Samers 2017; Lai 2018; Dodge 2020). In
line with this strategy, many activities like manufacturing have been gradually relocated to neighbouring countries (yet often remain under the control of Singaporean enterprises), in favour of the growth of higher-wage
advanced producer services, including finance (Chua 2017; Lai 2018). By
2020, Singapore’s financial sector employed more than 170,000 workers,
yielding 13.3% of the GDP despite accounting for only 4.5% of the workforce (Monetary Authority of Singapore 2020). Financial institutions also
comprise a significant source of demand for ‘Grade A’ office space, the
sustained re/development of which is an important driver and feature of
Singapore’s unique property-driven state capitalist model (Haila 2016).
Absent the need to finance large volumes of domestic property catastrophe exposure (as in Florida), Singapore-based re/insurance institutions specialise in brokering risks across Asia and Australia. In 2018, Singapore’s
offshore re/insurance hub wrote $12.8 billion in gross premiums, of which
nearly 60% was in property lines (Monetary Authority of Singapore n.d.).
The largest sources of premium were China (34.9%, exclusive of Hong Kong),
Japan (13.7%), Australia (10.8%), and Thailand (8.3%) (ibid). Nevertheless,
the extent of re/insurance activity in Singapore remains modest in comparison to larger reinsurance hubs like London, Bermuda, and Zurich. In
2017, London captured $110 billion of premium, or roughly ten times that of
Singapore (London Market Group 2020, p. 2).
Long-term visions for Singapore’s re/insurance sector therefore tend to
focus on exploiting the city’-state’s access to Asian risks and capital. In
the first ILS issuance in Singapore (Interview 2019-A). Legal frameworks
were retooled to accommodate a new offshore special purpose reinsurance
institutional structure, while regulatory structures were revised to make
oversight and compliance streamlined and cost-effective for issuers and
investors. An array of specialist professional services providers (brokers,
lawyers, actuaries) had to be recruited or trained. A new state-funded grant
scheme was launched to attract issuers, and to offset the ‘frictional’ costs
of issuing a transaction in unfamiliar territory. Asian regional investment
managers had to be thoughtfully introduced to this new asset class and
courted for future deals.
First Coast Re and the transactions which followed represented a crucial proof of concept, a symbolic and strategic ‘practical accomplishment’ (Fields 2018) within a larger play to cultivate an expanded role of
Singapore as a broker within global catastrophe risk finance circuits. First,
the growth of catastrophe re/insurance and risk finance-related services is
seen by aligned actors as a means to extend and secure the scope and scale
of Singapore’s international finance centre. Financial services comprise an
increasingly important driver of Singapore’s unique state-capitalist economic development model (Olds & Yeung 2004; Chua 2017), growing from
4.6% of Singapore’s GDP in 1965, to 12.3% by 2016 (Lai 2018, p. 154). Re/
insurance is one of several financial subsectors which have registered state
investment in recent years (Lai & Samers 2017; Lai 2018; Dodge 2020). In
line with this strategy, many activities like manufacturing have been gradually relocated to neighbouring countries (yet often remain under the control of Singaporean enterprises), in favour of the growth of higher-wage
advanced producer services, including finance (Chua 2017; Lai 2018). By
2020, Singapore’s financial sector employed more than 170,000 workers,
yielding 13.3% of the GDP despite accounting for only 4.5% of the workforce (Monetary Authority of Singapore 2020). Financial institutions also
comprise a significant source of demand for ‘Grade A’ office space, the
sustained re/development of which is an important driver and feature of
Singapore’s unique property-driven state capitalist model (Haila 2016).
Absent the need to finance large volumes of domestic property catastrophe exposure (as in Florida), Singapore-based re/insurance institutions specialise in brokering risks across Asia and Australia. In 2018, Singapore’s
offshore re/insurance hub wrote $12.8 billion in gross premiums, of which
nearly 60% was in property lines (Monetary Authority of Singapore n.d.).
The largest sources of premium were China (34.9%, exclusive of Hong Kong),
Japan (13.7%), Australia (10.8%), and Thailand (8.3%) (ibid). Nevertheless,
the extent of re/insurance activity in Singapore remains modest in comparison to larger reinsurance hubs like London, Bermuda, and Zurich. In
2017, London captured $110 billion of premium, or roughly ten times that of
Singapore (London Market Group 2020, p. 2).
Long-term visions for Singapore’s re/insurance sector therefore tend to
focus on exploiting the city’-state’s access to Asian risks and capital. In