Freshly appointed regional director of credit, surety and financial risks says access to cash is ‘a real issue’ for many Singapore-based firms

Clarence Goh (pictured) believes that “companies are now realising that getting insurance to cover corporate risks like insolvency is an investment, not a cost”.

“We have certainly seen, over the last 12 months, a tightening in the regional markets,” he said.

“Although Singapore is far better insulated that most, companies are having to deal with much more commercial uncertainty.

“Access to cash has become a real issue for a number of businesses.”

Goh, who prior to his most recent role as associate director at ANZ was commercial head at Coface South Asia-Pacific, said companies that wanted to be involved in big government infrastructure contracts and projects needed to provide surety and performance bonds, which have traditionally been provided by bank guarantees.

“The only problem is, these guarantees take the form of cold hard cash as collateral,” he said.

“Putting cash up as collateral isn’t great if money is needed to pay contractors and suppliers.”

Goh said he believed the insurance industry could provide commercial flexibility to corporates in Singapore.

“Giving businesses the option of using the insurance market to cover Performance Bonds is a great way of allowing businesses to free up much needed cash,” he said.

“This, in turn, increases competition and service standards and provides a trusted second option.

“I believe this is going to have a very positive effect on the Singapore market.”

Mid-term opportunities

Although Goh will focus on the Singapore market, head of Lockton Companies Singapore Peter Jackson said there were also considerable mid-term opportunities throughout wider Asia.

“Singapore’s place at the heart of South East Asia and its position as a natural gateway into greater China means there will only be an increasing need for trade credit solutions,” he said.

Jackson has told StrategicRISK that the insurance programmes of firms operating in Asia were too often focused on remote physical risks, rather than intangible risks that were far more immediate.

He said his aim was to “help clients understand the most pressing risks for their business”.

“I think that an industry-wide challenge is educating clients about how insurance works and the types of cover that is now available to help them protect their business,” he said.

Jackson added that it was about making insurance relevant to clients’ needs.

“Too often it’s seen as a commodity purchase based on price without a full appreciation of how insurance protects a client’s balance sheet,” he said.