Singapore insurers are set to significantly increase their investment risk profiles over the next two years, with 88% of firms planning to do so, according to new research by Clearwater Analytics. The study highlights a strategic shift towards embracing risk, supported by substantial investments in technology to manage these changes effectively.
The research, which surveyed insurance asset management executives in Singapore, revealed that 84% of insurers have already seen an increase in their investment risk profiles over the past two years. This trend is notably higher compared to Hong Kong, where only 52% reported similar increases. Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific at Clearwater Analytics, noted that this shift is driven by the pursuit of better returns in private markets and the need for advanced technology to manage these risks.
Automation has emerged as the primary tool for managing risk, outpacing other measures such as increased regulation. Regulatory demands, including stress testing and solvency reporting, are key drivers of technology investment. Akeroyd emphasised the importance of modern asset liability management (ALM), stating, “Insurers recognise that modern ALM requires speed, precision, and integration that legacy systems simply can’t deliver anymore.”
Private equity and venture capital are the main asset classes driving risk escalation, with 68% of insurers expecting significant increases in risk/reward levels in the next 12 months. The study also found that 86% of insurers reported improved risk visibility, largely due to enhanced technology and regulatory demands.
Looking ahead, 58% of insurers plan to focus on data analytics and artificial intelligence integration, whilst improving customer experience and portfolio management systems also remain priorities. The findings underscore the growing complexity of private market portfolios and the intensifying regulatory landscape in the region.
