By Claire Huanghuangjy@sph.com.sg@ClaireHuangBT

Singapore

THE grass is perhaps not that green

on the side of the chief financial of-

ficers (CFOs) in Singapore, as they

now face added pressures from rapid

technological changes and fluid stake-

holder expectations.

This was a key finding based on a

2016 poll by EY Financial Accounting

Advisory Services (FAAS) titled “How

can reporting catch up with an acceler-

ating world?”.

The survey sought the views of

1,000 CFOs or heads of reporting of

large organisations across 25 coun-

tries, including 40 from Singapore.

It said that 32 per cent of Singa-

pore CFOs cited changing stake-

holder expectations of information as

the top external challenge compared

to 18 per cent of global participants.

Some 30 per cent of Singapore

CFOs cited the frequency of reporting

requirements as another top external

problem, compared to 17 per cent of

global respondents.

Joon-Arn Chiang, EY Asia-Pacific

FAAS managing partner, Ernst &

Young LLP said: “Many Singapore com-

panies have overseas business in-

terests or are subsidiaries of multina-

tional corporations (MNCs), and so

are subjected to the various reporting

requirements of GAAP (Generally Ac-

cepted Accounting Principles) and

rules in Singapore, their home coun-

try, and their country-of-listing. This

‘onion-layering’ of regulatory risks

compels Singapore CFOs to be adept in grappling with the different rules and reporting expectations across jur-isdictions.”

The poll found that coping with technological changes such as cloud-based systems, data analytics, and artificial intelligence (AI) is the top issue for 35 per cent of emerging markets respondents and the number two issue for those in Europe.

This, as many are encumbered by legacy systems that do not allow re-porting teams to extract forward-look-ing insight from large, fast-changing data sets, said Mr Chiang.

About a third and 40 per cent of global and Singapore respondents, re-spectively, rank their reporting oper-ating model as “average”.

A sizable number also said trans-forming their reporting model is a ma-jor focus.

Over the next two years, 54 per cent of those polled expect to see a very significant or great increase in the use of outsourcing, followed by managed services and onshore or near-shore captive shared services centres.

Among Singapore CFOs, more than half expect to see an increased use in outsourcing (55 per cent), fol-lowed by offshore captive shared ser-vices (45 per cent), onshore or near-shore captive shared services (43 per cent), managed services (35 per cent) and centralised centres of ex-cellence (25 per cent).

The survey said the top three drivers of what Singapore CFOs hope to achieve by these new reporting ar-rangements are: the use of data ana-

lytics, a more flexible and agile report-ing function and future-proofing the reporting function against disrup-tions and changes.

“High operating costs over more routine transactions are driving the outsourcing of high-volume work to lower-cost countries. The concentra-tion of data prepared in a consistent manner in a centralised location, com-bined with the use of analytics, presents companies with the oppor-tunity to derive insights and anticip-ate opportunities that were not viable previously,” Mr Chiang said.

Currently, the dominant organ-ising principle for corporate report-ing is one that is led by the head of-fice, but decentralisation is expected, with local markets taking on more re-sponsibilities, said the survey.

The poll covered 14 main industry sectors. More than 40 per cent of the organisations the CFOs were with had revenues in excess of US$5 billion a year, with 21 per cent in excess of US$20 billion.

London

OPEC (Organization of the Petroleum

Exporting Countries) talks in Vienna

on Tuesday didn’t resolve whether

Iraq and Iran will join any production

cuts, instead deferring the crucial mat-ter to ministers who will meet on

Nov 30, said two delegates.

While Libya’s Opec governor Mo-

hamed Oun said that the meeting

ended with a consensus that will be

presented to ministers, he declined to comment on whether the group’s

second and third-largest members

are willing to limit output.

The continuing questions around

Iranian and Iraqi production don’t

make a deal impossible next week, the delegates said, asking not to be

named because the talks are private.

However, the lack of agreement on

Tuesday leaves open the possibility

the group fails to implement the cuts

first outlined in late September.Officials leaving Opec headquar-

ters in Vienna told reporters they

have agreed on most details and that

they were happy with the outcome of

Tuesday’s talks.

But on top of the pending Iran and Iraq issue, securing cooperation from

non-members including Russia has

emerged as a mounting concern

among some Opec countries, said

one delegate. Saudi Arabia and its al-

lies in the 14-nation group want Rus-sia to cut output rather than freeze it,

the delegate said.

“Just as the market has become op-

timistic about the prospects for an

Opec deal, challenges have emerged,”

Amrita Sen, chief oil analyst at con-sultant Energy Aspects Ltd in London,

said in a note to clients. “Iran and Iraq

are now revisiting their demands for

exemptions, seeking to pressure

Saudi Arabia to do all the work.”

Opec reached a preliminary agree-ment in Algiers on Sept 28 to reduce

collective output to 32.5 million to 33

million barrels a day, compared with

the group’s estimate of 33.6 million in

October. Technical specialists from member countries met in Vienna this

week in an attempt to figure out how

to share the cuts. While the talks fo-

cused on reaching the lower end of that production range, some mem-bers continued to resist Iran and Iraq’s argument that they should be exempt from reducing output, said one delegate.

The technical committee pro-posed that all members except Ni-geria and Libya reduce their output by between 4 and 5 per cent, two del-egates said. For most nations, this re-duction would be based on the Opec secretariat’s assessment of the level they pumped in October, they said.

To accommodate Iran and Iraq’s special circumstances, the committee proposed allowing them to lower pro-duction from a different level, one of the delegates said. For Iran, this would be the amount produced be-fore international sanctions were im-posed in 2012, the delegate said. It was unclear whether the countries would accept these terms, which are yet to be presented to their oil minis-ters.

If there’s no agreement to restrict output, the International Energy Agency has said that oil prices are likely to fall in 2017. Opec’s own es-timates of supply and demand also show that the Algiers agreement would barely drain a record oil sur-plus next year without the coopera-tion of non-members such as Russia, the world’s largest energy exporter.

Deferring the question of Iran and Iraq’s participation to the ministerial meeting means the group won’t have a finalised agreement to present to Russia and other non-members at a meeting scheduled for Nov 28 in Vi-enna. Moscow has insisted Opec should reach an internal deal before seeking the backing of other produ-cers. President Vladimir Putin has also repeatedly said that he would prefer to freeze output at current re-cord levels to making cuts.

In public, Opec delegates charac-terised this week’s meeting as making progress. “There is certainty that everybody is on board,” Nigerian Opec delegate Ibrahim Waya told re-porters on his way into the meeting on Tuesday. “Everyone knows that the stakes are high.” BLOOMBERG

By Claire Huanghuangjy@sph.com.sg@ClaireHuangBT

Singapore

THE region’s insurance industry has high stability and can play an essen-

tial role in supporting and sustaining Asean’s economic growth, data from

the 2016 Asean Insurance Statistical Report indicates.

Total gross written premiums re-corded in Asean rose 2.9 per cent to

US$96.3 million, while the overall in-surance penetration rate edged up

0.4 percentage points to 3.8 per cent last year.

The report was released on Wed-nesday by the Asean Insurance Coun-

cil (AIC) at the opening of the 2nd Asean Insurance Summit (AIS) in

Yogyakarta, Indonesia. Within the region, Singapore, Thai-

land and Malaysia have the most de-veloped insurance markets, contrib-

uting 33 per cent, 23 per cent and 21 per cent respectively of the gross writ-

ten premiums.

Cambodia, Vietnam and the Philip-pines recorded the highest growth in

gross premiums.In the life business, net written

premiums in the region hit US$68.7 million last year, up 3.9 per cent.

Not surprisingly, Singapore, Malaysia and Thailand were top con-

tributors; Cambodia, Vietnam and the Philippines registered the highest

growth in the life insurance segment. Over on the region’s general insur-

ance side, gross written premiums grew 3 per cent to US$27.5 million,

led by Singapore, Thailand and In-donesia.

Again, Cambodia and Vietnam re-corded the highest growth in this seg-

ment at 16.4 per cent and 13.9 per cent, respectively.

AIC secretary-general Evelina Pietruschka said: “Several markets

like Singapore and Thailand have comparable penetration rates to ma-

ture markets like the United States or

Europe, nearly in the double digits, but the overall Asean insurance pen-

etration rate still measures just 3.8 per cent, indicating there is still

plenty of room for insurance to grow in this region.”

She added that the overall Asean gross written premiums had a com-

pounded annual growth rate of 5.8 per cent between 2012 and last year,

“indicating the industry’s stable growth and potential, despite the ups

and downs of various markets and sectors in our region”.

Aimed at pushing the region’s in-surance industry to play a greater

role in the Asean Economic Com-munity (AEC), the summit paves the

way for more than 200 regional insur-ance companies and regulators to

seek solutions to key issues. These re-late to marine, aviation and transport

development, insurance education as well as infrastructure financing.

Following the summit, the AIC will

provide feedback and recommenda-tions from the industry to regulators

for their consideration in policy for-mulation.

Dubai

SAUDI Arabia’s dominance of Opec isn’t what it once was. Iraq and Iran, shaking off shackles of

sanctions and war, have raised oil output to re-cord highs and are asserting themselves within

the Organization of the Petroleum Exporting Countries. Together, they produce more than

eight million barrels per day (bpd) – nearly a quarter of the oil pumped by the group – and

both want to boost their output further.The ambitions of Opec’s second and

third-largest producers are the main obstacle to the Saudi-backed effort to trim the group’s out-

put and buoy prices. Even if members reach a deal next week and accept production quotas,

the reluctance of Iraq and Iran to cut output bodes poorly for their long-term cooperation

with the kingdom – and for stability in global oil markets.

“Iran and Iraq want an equal relationship with Saudi Arabia within Opec,” Jaafar Altaie,

managing director of Abu Dhabi-based consult-ant Manaar Group, said on Monday. The two are

“in a coincidental collusion in Opec because it

suits their common interest of getting as high a

quota as possible”.

Opec ministers will meet on Nov 30 to work

out a shared cut in production to between 32.5

million and 33 million barrels a day. Trimming

output could help balance an oversupplied mar-

ket and reverse a price slide that’s rupturing

budgets from Venezuela to Saudi Arabia. Bench-

mark Brent crude has tumbled from more than

US$115 a barrel in June 2014 to less than US$50

this week and traded 0.3 per cent lower at

US$48.96 a barrel at 9am on Wednesday in

Dubai.

The group’s members granted special consid-

eration to Iran in September, when they reached

a framework agreement in Algiers, to help the

country recover from international sanctions

that were eased in January. With Iran now pump-

ing almost as much as it did before the sanc-

tions, Opec has yet to specify a level at which it

will try to limit the nation’s output.

Iraq too is pressing for an exemption from

cuts, citing the urgency of its offensive against the Islamic State (ISIS). Oil Minister Jabbar Al-Luaibi said last month that Iraq would not pump any less than its official September out-put figure of 4.7 million bpd. Opec disputes that figure and puts Iraq’s production for that month at less than 4.5 million bpd.

An Opec committee convened on Monday and Tuesday in Vienna to decide how to share the burden of the Algiers agreement, but de-cided to defer the issue of Iraq and Iran’s parti-cipation to the ministerial meeting on Nov 30, according to two delegates.

Iran and Iraq have grown in importance within Opec as their production has increased. Iran has added about 880,000 bpd since the loosening of sanctions. Iraq has boosted output by about 50 per cent over the past three years, to a record high in October.

Both countries need the higher prices that could result from a deal to attract foreign invest-ment vital to their long-term production plans. They also want to sell as much oil as possible in the short term to bolster their depleted

budgets. By securing exemptions to any cuts, Iran and Iraq could duck this dilemma.

That would leave Saudi Arabia to shoulder the biggest burden of a collective decrease – O-pec’s first in eight years – and cost the kingdom market share as its two biggest Opec competit-ors keep their output unchanged. The Saudis ve-toed an earlier deal in April when Iran, a polit-ical as well as an economic rival, refused to join in cutting.

Opec is working towards a six-month agree-ment, delegates said this week. Such a short time frame could make it easier for Iraq and Iran to accept limits, if not cuts, in their own produc-tion, Manaar’s Mr Altaie said.

Setting output limits now may create bench-marks for more permanent production caps for individual Opec members, according to Tushar Tarun Bansal, director at Singapore-based con-sultant Ivy Global Energy.

“Iraq is looking to the future,” Mr Bansal said. “They are trying to agree to a higher level of pro-duction for any halt so that they will be in a bet-ter position down the road.” BLOOMBERG

Changes in tech, stakeholder expectations pressure local CFOs: EY

OPEC

Question of Iran, Iraq production cuts deferred to ministers: delegates

Asean insurance growing, and shows potential: report

Saudi sway in Opec getting curbed by resurgent Iraq and Iran

On top of the pending Iran and Iraq issue, securing cooperation from non-members including Russia has emerged as a mounting concern among some Opec countries, said one delegate. Saudi Arabia and its allies in the 14-nation group want Russia to cut output rather than freeze it, the delegate said. PHOTO: REUTERS

Choose from variousclub memberships or sell

yours in CLASS 66

To advertise, call thePrint Classified Hotline:1800-289 9988

Brunei

Cambodia

Indonesia

Malaysia

Philippines

Singapore

Thailand

Vietnam

225

84

13,982

19,870

5,517

31,409

21,863

3,156

Source: Asean Insurance Council

2015 gross written premiums (US$ million)

Insurance markets

The EY poll found that coping with technological changes such as cloud-based systems, data analytics, and artificial intelligence is the top issue for 35 per cent of emerging markets respondents.

CFOs also have to be adept in grappling with the different rules and reporting expectations across jurisdictions

4 | TOP STORIESThe Business Times | Thursday, November 24, 2016