Company Profile and Structure
Direct Asia Insurance (Singapore) Pte Ltd (Registration No. 200822611G) ("the company" or "we") is incorporated in Singapore with its principal places of business at 88 South Bridge Road, Singapore 058716 and 89 Neil Road #02-01, Singapore 088849. Our registered office is at 88 South Bridge Road, Singapore 058716.
The company was registered as a direct insurer to carry on general insurance business in Singapore on 18 May 2010 under the Insurance Act (Chapter 142) of Singapore ("Insurance Act").
Our immediate parent company is Direct Asia Insurance (Holdings) Pte Ltd ("DAIH"), a Singapore registered company. We are ultimately owned by Hiscox Ltd, an international specialist insurance group headquartered in Bermuda and listed on the London Stock Exchange.
DirectAsia Business and Philosophy
At DirectAsia, our aim is to change the face of insurance in Singapore and Asia, and to bring quality insurance products at more affordable prices to customers.
We wanted to depart from the traditional way of offering insurance by providing customers with a different and better way of obtaining insurance. We thus launched our online direct-to-customer business in 2010. Our products are also offered through our call centre and our office at 88 South Bridge Road.
Today we are firmly established as one of Singapore's leading online insurers. Each year we continue to grow and find new ways to offer Singaporeans better choices on their insurance.
Our Key Products
We offer the following insurance products to the Singapore market:
Our External Environment
We operate in the Singapore general insurance market.
Our Objectives and Strategies
Our mission to transform insurance in Asia is just starting.
In 2014, DirectAsia became part of global insurer Hiscox, adding decades of additional insurance expertise to our firm. Those extra resources, in addition to our carefully selected team of local and international talent, will better enable us to turn DirectAsia into a true leader of online insurance in Asia.
Despite the continued expansion of our team, our strategy has been the same from day one. To offer our clients best-value insurance policies in new ways combined with excellent customer service.
Audited Financial Statements
Financial year 2015
Corporate Governance Overview
Framework and management controls
We recognise the importance of having a set of well-defined corporate governance processes to enhance performance and accountability, to sustain business performance and to safeguard the interest of its stakeholders. The promotion of corporate transparency, integrity and accountability at all levels of the organisation is led by the Board and assisted by the management team.
Board Role and Responsibilities
The Board of Directors oversees the affairs of the company, including setting its strategic direction and long term goals, and reviewing its performance.
The Board has established two Board Committees to assist it in carrying out its oversight of the operations and business affairs of the company. These Board Committees are the Audit and Risk Committees. The Board has delegated authority and powers to these Committees to monitor and have oversight over specific areas. Each of the Committees has its own clearly defined terms of reference which describe its objectives, composition, and key duties and responsibilities. The minutes of Board Committee meetings are circulated to the Board.
The key responsibilities of the Audit Committee include:
- Review the plan, results and effectiveness of internal and external audits.
- Review the independence and objectivity of external auditors.
- Review with internal and external auditors significant accounting and financial reporting issues.
- Review with management and the external auditors the financial statements of the company.
- Make recommendations on the appointment, re-appointment or removal of external auditors and approving the remuneration and terms of engagement of the external auditors.
The Board delegates its risk review and oversight function to the Risk Committee while retaining the ultimate authority. The Risk Committee exercises the authority delegated by the Board to provide oversight on the risk management framework and policies, to cover all material risks such as Strategic, Insurance, Market, Credit (encompassing Liquidity), Operational and Group risks.
The key responsibilities of the Risk Committee include:
- Approve the framework and policies for risk management.
- Set the enterprise level risk appetite and tolerance.
- Ensure management has established adequate systems and processes to implement robust risk management, risk measurement and risk reporting.
- Highlight to the Board issues of concern on key business risks.
Enterprise Risk Management Framework
Risk Management Overview
At DirectAsia, risk management is core to our business in order to protect customers and stakeholders. The role of risk management is to ensure risks are identified, assessed, controlled or mitigated, so as to safeguard our financial strength and business continuity, and enable us to fulfil our obligations to our customers and stakeholders. We achieve these objectives through the implementation of a risk management framework that encompasses all key areas of our operations.
This Risk Management Strategy, as formulated by the Risk Committee and approved by the Board, serves to ensure that the risk management framework and risk policies are in place with the necessary processes and controls to identify, assess and manage material risks consistently across all business activities.
Risk Management Principles
Risk is defined as events which have a range of probabilistic outcomes, some of which have a negative impact on the organisation. As an insurer, risk is a key part of our business and the objective of risk management is to ensure that these risks are identified, assessed, controlled or mitigated.
In order to achieve the objective, DirectAsia operates in accordance with the following principles:
- Board ownership and oversight of an effective risk management framework operating within a formal governance framework, which features an independent risk function;
- Operation of a common risk framework and risk language across the organisation;
- Clear business ownership of risks including reporting and escalation of business risk issues and risk management actions;
- Clear articulation of risk appetite around strategic and business objectives; and
- Heightened focus on the critical risks to DirectAsia, with proportionate focus and approach to non-critical risks and new, evolving or emerging risks
Under the risk management framework, risks are classified under six broad categories which are considered to be most central to our business:
- Strategic Risk
- Market Risk
- Credit Risk (encompassing Liquidity Risk)
- Operational Risk
- Group Risk
- Insurance Risk
Insurance risk comprises:
- Underwriting risk: Underwriting risk is defined as the risk that insurance premiums will not be sufficient to cover future insurance losses and associated expenses.
- Reserving risk: The risk of the reserves set in respect of insurance claim losses are ultimately insufficient to fully settle these claims and associated expenses. This definition also applies to reserves which have been set previously.
Underwriting risk is mitigated by:
- Purchasing reinsurance with highly creditable reinsurers to mitigate the impact of unexpected large claim or several claims,
- Actively manage its portfolio by expanding and/or contracting into various segments depending on the pricing cycle, and
- Having guidelines to assist underwriters to make decision on whether to underwrite a particular risk in line with the broader underwriting philosophy.
Reserving risk is mitigated by:
- Regular review of the insurance reserves, by the Group Actuary, to ensure that they are sufficiently held at all times. Additional reserves are held to cover the possibility of adverse development in claims experience and comply with the regulatory requirements,
- Guidelines and procedures to follow for claims that require investigation and claims adjustment, thereby preventing settlement of fraudulent claims, and
- Prompt claims handling reduces the risk of under-reserving as majority of the claims in Singapore are generally reported and settled within a short period.
- Specific risk strategies and appetite are established for each of the categories of risk. They set the boundaries within which management is expected to operate as they seek to deliver the Company's objectives.
- Each of the business lines is responsible for ensuring their business strategies align with the established risk appetite, for thoroughly evaluating and managing all risk exposures consistent with our enterprise risk policies and for earning economic returns commensurate with the level of risk assumed.
- A formal review of our risk appetite and quality of risks is undertaken on a regular basis.
- Annual review for policies and procedures that facilitate the identification and management of material risks, and those relating to the monitoring and reporting of risk issues are conducted.
Capital and regulatory risk management policies and objectives
Our policy is to maintain a suitable capital base so as to support the underwriting strategy. We are also required to maintain a minimum amount of capital as prescribed under the Singapore Insurance Act (Chapter 142) and Insurance (Valuation and Capital) Regulations 2004.
We have complied with the abovementioned regulatory requirements with Capital Adequacy Ratio of 278%, which is well above the minimum regulatory requirement of 120%.
Investment objectives and strategy
Our investment objective is to maximise the investment result in the prevailing financial, economic and market conditions, from the assets matching technical reserves and shareholder funds, subject to a prudent risk appetite. Our assets are managed in a sound and prudent manner in accordance with the regulations promulgated by the MAS, in particular, MAS Notice No. 125 issued on 2 April 2013. We currently adopt a very low risk profile for our investments.
Policies and processes
We adopt a risk-based approach through the investment process with due considerations to the range of investment related risks, mainly credit, liquidity, interest rate and currency risks. Broadly, there are 4 steps involved in the investment process:
- Investment policy setting – establish the investment guidelines including the target asset allocation range, the time horizon, the investment limits and the risk controls mechanism.
- Investment execution – identify and select the specific investments in accordance with the parameters set out in the investment policy.
- Performance monitoring and reporting – regular review of portfolio performance against return and risk characteristics and reporting to key stakeholders, including the Board.
- Portfolio rebalancing – rebalance the portfolio in accordance with the changing business mix and liability profile.