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Organization : Ministry Of Social & Family Development
Facility Name : Insurance Linked Securities Grant Scheme
Country : Singapore
Website : https://www.mas.gov.sg/schemes-and-initiatives/insurance-linked-securities-beta

MAS Insurance Linked Securities Grant

Insurance-Linked Securities (ILS) are an alternative risk financing solution that allow risk carriers to transfer their peak portfolio risks to capital market investors.

Related / Similar Grant : MAS Grant for Equity Market Singapore

Background

Singapore aims to be the leading ILS hub in Asia for Asia, which will complement Singapore’s deep debt capital market and current offerings as a reinsurance and specialty insurance centre in Asia.

A vibrant ILS market will help to provide additional insurance capacity through financing from the capital markets that can be catered towards all forms of risks (e.g. natural catastrophes, longevity, mortality, operational risks, cyber-risks etc.).

MAS has adopted a three-pronged approach to grow the ILS market and ecosystem in Singapore.

This includes :
I. Improving data quality and the standardisation in the region to develop industry-loss based indices upon which ILS can be structured.
II. Establishing and enhancing our regulatory, tax and legal infrastructure to support various ILS instruments.

III. Developing Singapore ILS ecosystem through incentivising ILS issuers to domicile their ILS in Singapore through our grant schemes, encouraging ILS service providers to anchor their operations here.

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Funds

Funds 100% (capped at SGD 2 million) of upfront ILS bond issuance costs covering all forms of risks such as longevity, mortality and operational risks, beyond just natural catastrophes.

How to Apply?

Parties who are interested to apply for the ILS grant scheme or to set-up an ILS related service/entity, fund, or fund manager in Singapore may write directly to fsdf [AT] mas.gov.sg

Qualifying Issuer

Companies and Financial Institutions based onshore and offshore. This includes multilateral organisations.

Insurance and Risk Financing Initiatives

Asia’s long-term growth prospects for the insurance industry remain strong, underpinned by rapid urbanisation, infrastructure development and trade growth in Asia.

In turn, this will drive a greater need for insurance and risk financing solutions, as governments, corporates and individuals seek to manage their assets and wealth at risk.

Yet, the region continues to face persistent and structural protection gaps which are impacting the region economically, financially, and socially. Such structural gaps sometimes arose due to the lack of good quality data, as well as less developed loss frequency and severity models in Asia.

To narrow the protection gap and strengthen Asia’s risk resilience, MAS has embarked on a number of industry-wide initiatives to support more robust quantification of risks and the co-creation of innovative risk financing solutions.

Insurance-Linked Securities :
As part of our vision to grow as the leading ILS hub for Asia, Singapore has taken progressive strides to develop the ILS market in Singapore.

This includes :
** The establishment of an alternative risk transfer workgroup to advise MAS on initiatives to support the development of Singapore as an ILS hub.

** The introduction of the ILS grant scheme which funds up to 100% of upfront issuance costs of a ILS catastrophe bond in Singapore. The scheme was launched in February 2018 and has been extended currently till December 2022.

** Ongoing review to enhance Singapore regulatory, corporate and taxation regime to accommodate different and innovative forms of ILS instruments.
** Supporting the set-up of ILS service providers, funds, and fund managers in Singapore.

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