Preparation paid off: Two investor perspectives on how South Korea and Singapore handled the corona crisis
Markus Eugster, CEO of Korean Re Switzerland interviewed by Florian Schweitzer, CEO btov Partners
Florian: Markus, you are a passionate and wise angel investor with a wealth of experience. Most of your time is however dedicated to your role as CEO of Korean Re Switzerland. From Zurich you are developing the European activities of your parent company and hence you are in direct exchange with your colleagues in Seoul. What are your observations related to how South Korea is managing the COVID-19 crisis, and has the tracing app or any other digital technology played a role in that so far?
Markus: In early February, when COVID-19 still seemed to be far away from Europe, South Korea was in an emergency situation, cases grew exponentially and the source of infection was hard to find. Once the source had been identified the country reacted with determination and was able to bring infection rates down quickly. Technology certainly helped — a tracing app is being widely used — but also the general pandemic preparation of the country after SARS and MERS (e.g. large testing capabilities), and finally the discipline and participation of most individuals accepting strict hygienic measures played an important role. South Korea never went into lock-down, but rather imposed quarantine measures on infected people and their contacts and started testing right away. The result is even more amazing given South Korea’s demographics — over 50 million inhabitants living in a country 2.5 times the size of Switzerland.
Florian: What could and should European countries learn from South Korea in the context of this crisis and its future implications?
Markus: Let me emphasize that comparing individual countries in the COVID-19 context can be misleading as local situations tend to be very different. This crisis has shown how fragile we and our societies are. Being humble, accepting that we know little and that we first have to build reliable scientific evidence is a good starting base. When it comes to South Korea I am impressed with the level of preparedness in case of emergencies and the connectivity of individuals with public communication channels, long before COVID-19. In case of a fire in your neighborhood, a surging storm, or a big traffic accident next door you receive warning messages via smartphone. Due to its geopolitical situation South Korea tends to be better prepared for emergencies. It reminds me of Swiss cold war preparations combined with 21st century technology. The flipside is a higher degree of social control and the potential state intrusion into your privacy and data. There is no absolute ‘right or wrong’ and in every country and society COVID-19 has triggered questions about our rights and values, their priorities and interdependencies. Finally, let’s not forget: we are all still at the beginning of this crisis.
Florian: Your profession is to deal with uncertainty. From your perspective, where are the most important risks and opportunities being accelerated because of the corona crisis?
Markus: The role of reinsurance is to ensure economic and social continuity for individuals and companies when (large) disaster strikes — hurricanes, earthquakes, explosions, car accidents, etc. Some call COVID-19 a ‘black swan’ which it is definitely not. Pandemics have always been on the risk map of reinsurers, but timing and global dimension struck most by surprise. COVID-19 can be considered a ‘perfect storm’ hitting the industry in three ways: losses triggered by human tragedies and by business interruption during lock-downs, impairments of invested assets as a result of financial market dislocations, and a reduction of future premium income due to lower economic activity. In terms of opportunities, the general trends also apply to reinsurance — digitalization of value chain and business model, flexible working arrangements, and a wider use of communication technologies instead of travelling. When it comes to better preparedness in the future, pool solutions which already exist for nuclear risks could provide additional protection. Given the potential dimension of pandemic risks, a closer cooperation between the industry and governments seems to be very likely and public-private-partnerships are currently being discussed in various countries.
Florian: Thank you very much for sharing your thoughts, Markus and talk to you soon.
Uwe Krueger, Joint Head EMEA at Temasek International interviewed by Florian Schweitzer, CEO btov Partners
Florian: Uwe, what are your observations related to how Singapore is managing the COVID-19 crisis?
Uwe: A key factor in how Singapore has managed the pandemic is that the country has pulled together with a ‘whole-of-nation’ response. While the Singapore Government has provided much of the overall leadership, the private and public sectors have worked very closely hand-in-hand to help manage the outbreak and consequences thereof, be it through financial, psychological or emotional support.
A good example, when case numbers spiked as a result of an outbreak in migrant worker dormitories, Temasek and its portfolio companies already had people working on mass care facilities to prepare for a wider community outbreak. An exhibition centre, operated by a Temasek portfolio company, was converted into a community care facility for about 4,000 patients within six days, using the logistics and facilities planning expertise of two other Temasek portfolio companies. When the Singapore Health system needed those facilities, they were ready.
Florian: What role has the tracing app or any other digital technology played in that so far?
Uwe: Digital technology has played a significant role in contact tracing even from the earlier stages of the outbreak in Singapore. Within a short few weeks, the contact tracing infrastructure was developed and rolled out progressively across the island at key public touch points such as shopping malls, supermarkets, offices and schools. To augment this, manpower was quickly deployed and trained to work with the data to isolate close contacts of those infected, and quarantine facilities were repurposed from existing university accommodation halls, hotels and chalets, again within days.
Florian: On one hand you had to make sure that businesses such as Singapore Airlines were financed well and on the other hand it seems to us that political and corporate leaders took action. What did Temasek do in that respect?
Uwe: On our part, Temasek has been heavily involved in the fight against Covid-19. One of the strengths of an investment company like us, owners of our portfolio, is the ability to bring people together in times like this, and share critical expertise, facilities and skills. Through our extensive network of portfolio companies and partners, we have helped build direct capabilities, and funded rapid expansions, in the areas of diagnosis, containment, protection and community care. Our efforts have also extended beyond Singapore to our surrounding neighbours, and now, further afield in countries that need access to things like test kits, personal protective equipment, respirators and ventilators, and other essential equipment that we have been able to source from within our networks. We do this not to make money — far from it. We do so because at times like this, nothing is more important than providing help to those who need it.
Florian: What could and should European countries learn from Singapore in the context of this crisis and its future implications?
Uwe: It is clear that Singapore recognizes it is still in the midst of fighting the pandemic. While it has acted swiftly to contain the spread of the virus and limit community transmission, the government has adopted a very careful and calibrated approach by gradually lifting restrictions, giving priority to key sectors of the economy to resume operations.
This has meant sacrifices by many, to help those most vulnerable in the community. What we have seen, from the significant testing regime, is that most cases are asymptomatic, or exhibit only mild symptoms. However, this virus can be devastating for some in our community, particularly those with underlying medical conditions. Singapore’s deep investment in research capabilities is helping to explore treatment options, research vaccination and production techniques, and learn more about the virus, while caring for those affected by it.
Singapore has had one of the lowest case fatality rates in the world, showing that early intervention, monitoring, care and treatment regimes can help.
A function of the progress the country has made so far seems to be the trust in government to do the right thing for the better good of the wider community, even as the measures have caused a fair amount of inconvenience and economic pain in the short term. It is the combination of trust, responsibility and bold, collective action that has seen Singapore through the initial phase of what will be a long battle yet.
Florian: Thank you very much for sharing your thoughts, Uwe and talk to you soon.
