The Working Group I contribution to the Sixth Assessment Report addresses the most up-to-date physical understanding of the climate system and climate change, bringing together the latest advances in climate science, and combining multiple lines of evidence from paleoclimate, observations, process understanding, and global and regional climate simulations. Disclaimer: The Summary for Policymakers (SPM) is the approved version from the 14th session of Working Group I and 54th Session of the Intergovernmental Panel on Climate Change and remains subject to final copy-editing and layout. The Technical Summary (TS), the full Report Chapters, the Annexes and the Supplementary Materials are the Final Government Distribution versions, and remain subject to revisions following the SPM approval, corrigenda, copy-editing, and layout. Although these documents still carry the note from the Final Government Distribution “Do Not Cite, Quote or Distribute” they may be freely published subject to the disclaimer above, as the report has now been approved and accepted. Source: ipcc.ch

The earthquake insurance coverage rate in Turkey has crept up to 58% at present from 56% last year, according to data released by the Natural Catastrophe Insurance Pool in conjunction with the 22nd anniversary of the devastating Marmara Earthquakes in 1999 that fell on 17 August. On a regional basis, the Marmara Region ranks first with an coverage rate of 70%, followed by: Aegean, 59% Central Anatolia, 54% Eastern Anatolia, 51% Mediterranean and Southeastern Anatolia, 50%, and Black Sea, 46%. The average annual premium is approximately TRY163 ($19.40), and the highest insured amount for residential property is TRY268,000. TCIP Coordinator Erdal Turgut told Insurance Gazette, “Today, the insurance rate in our country has reached 58%. As TCIP, we make all our plans considering a possible major Istanbul earthquake, and our loss compensation capacity has increased to TRY40bn.” This capacity, under the management of Turk Reasurans, has been created completely independently of government resources and will only be used for the compensation of earthquake-induced damages to the homes of Compulsory Earthquake Insurance policyholders. Goal Mr Turgut added, “Our goal, of course, is to reach a 100% coverage rate and to insure all homes within our scope under the Compulsory Earthquake Insurance scheme. That's why we declared 2021 as the year of mobilisation with the goal of reaching 100% insurance coverage.” TCIP operates the Compulsory Earthquake Insurance scheme (DASK), which was established in 2000 after the 17 August 1999 Marmara Earthquake to cover damages caused by earthquakes to residential properties. The total amount of compensation paid out by TCIP to the insured since its establishment has reached TRY1bn. Source: meinsurancereview.com

On June 16, 2021, S&P Global Market Intelligence hosted a webinar to look at a range of ESG initiatives taking place across the global insurance industry. This blog summarizes some of the key issues that were discussed. Matthieu Bardout, Global Head of ESG Commercial Strategy, Banking and Insurance at S&P Global Sustainable 1 moderated the session that included five speakers: Butch Bacani, program leader for the UN Environmental Program (UNEP) Principles for Sustainable Insurance (PSI). Yvonne Braun, Director of Policy in Long Term Savings and Protection at the Association of British Insurers (ABI). Steven Bullock, Managing Director and Global Head of ESG Product Innovation and Analytics at S&P Global Sustainable1. Nina Chen, Sustainability and Climate Initiatives Director at the New York State Department of Financial Services (DFS). Dave Jones, a former Insurance Commissioner and Director of the Climate Risk Initiative at the University of California, Berkeley Center for Law, Energy and the Environment. Five Key Takeaways A great deal of activity is taking place around the world to address climate issues and the role that insurance companies can play in the transition to a green economy. Insurers face substantial risks on the investment side of the business with extensive exposure to fossil fuel-intensive assets, and need to begin to seriously address this reality. They are also exposed on the underwriting side, especially with increasing regional and global losses being driven by catastrophic weather events. There needs to be important dialogues between the investment and underwriting groups, so they are in sync for their firms to meet net zero targets. The regulatory world is moving towards mandatory disclosure, and insurance companies should take up these issues now. The industry already uses catastrophe modelling techniques, so there is an opportunity to start integrating more forward-looking climate scenarios into that analysis to have a better understanding of exposure to a vast array of different transition and physical risks. Yvonne Braun, ABI: Yvonne described how the ABI is the voice of the insurance and long-term savings industry in the U.K., and a lot is happening in the country. For example: (1) there are now clear requirements in place for pension providers to explain how they account for ESG risks, (2) the U.K. government will be making TCFD disclosure mandatory across the entire economy by 2025, and (3) the Bank of England launched the Climate Biennial Exploratory Scenario, which includes 10 of the U.K.'s largest insurers and long-term savings providers and will gather extensive data to enable a comprehensive assessment of the risk management required for climate change. The U.K. government is also reassessing the regulatory framework, which presents a large opportunity for insurers to support the green transition. To do that, however, some changes are needed to the capital rules. The ABI has submitted a paper to the U.K. regulators making the case for Solvency II reform to allow a wider set of assets to be eligible for the matching adjustment. That would enable the long-term savings sector to unleash both the capital they hold and the capital that is coming in future savings to help with the transition. Government can also play an important role by structuring transition investment opportunities in a way that guarantees predictable and long-term cash flows, making them attractive to the insurance sector. Yvonne feels there is a large role for insurers to play in the transition, given how connected the industry is to the economy and the lives of customers. Dave Jones, Climate Risk Initiative at the University of California: Dave explained how the National Association of Insurance Commissioners (NAIC's) Climate Risk Disclosure Survey asks a series of qualitative questions of insurers in the U.S. regarding what they are doing to address climate change. Looking back at answers given in 2016, it was clear that U.S. insurers were not paying enough attention to transition risk, particularly in their investment portfolios. In response, he launched the Climate Risk Carbon Initiative that required the top 670 U.S. insurers to report on their investments in oil, gas and coal enterprises, as well as utilities deriving more than 50% of their electricity from fossil fuels. Findings showed that there was approximately $555 billion (U.S.) in fossil fuel investments, and approximately $21.4 billion in thermal coal enterprises. The work has continued to evolve, and in 2018 Dave undertook the first climate risk scenario analysis of insurers' portfolios using the 2° Investing Initiative's Paris Agreement Capital Transition Assessment (PACTA) model under three scenarios for the portfolios of the 600 largest insurance companies. Findings showed a significant misalignment. David pointed to a number of critically important developments since that time. For example, in 2020 the Commodity Futures Trading Commission looked at the entire landscape of U.S. financial regulators. One of the recommendations was that the insurance industry should undertake climate risk analysis as part of its ongoing enterprise risk management governance, and that there should be mandatory disclosure of those risks. More recently, the Biden administration has issued an executive order directing the Treasury Secretary, as the Chair of the Financial Stability Oversight Council, to oversee a plan that would encompass all U.S. financial regulators and their approach to incorporating climate risk analysis in their supervision oversight of financial institutions. One component directs the Federal Insurance Office of the U.S. Department of Treasury to assess the adequacy of state insurance regulators' oversight as it relates to climate risk. Hopefully that will encourage more state insurance regulators to incorporate climate risk analysis and assessment in their supervisory practices. Nina Chen, New York State DFS: DFS supervises and regulates the activities of nearly 1,800 U.S. insurance companies and more than 1,400 banking and other financial institutions. As the first ever Director of Sustainability and Climate Initiatives at DFS, Nina works across insurance, banking, consumer protection and research innovation to integrate climate considerations into all programs. DFS is the only U.S. financial regulator to establish a holistic set of expectations on managing the financial risks from climate change for both banking and insurance-regulated entities. Nina described how DFS has now included questions on climate-related financial risks in the exams of insurers, and has been providing feedback to the responses. A report was recently released on the transition risk exposure that New York domestic insurers face based on the 2019 asset data. Findings showed that these investments have a meaningful exposure to carbon-intensive sectors, and exposures vary dramatically by insurer. Nina sees supporting insurers on the journey of managing climate risk as part of her work. DFS is also actively engaged with national and the international counterparts to facilitate consistency across jurisdictions, an important issue for all. Butch Bacani, PSI: PSI now has 200 members worldwide that have signed global ESG principles that are tailored to the insurance industry, including 100 insurance companies that represent $14 trillion in assets under management (AUM). An extensive network of insurance market bodies and supervisory authorities have also signed the PSI. Butch explained that the priorities for the organization include: (1) understanding different climate change scenarios and their impact on insurance portfolios across physical, transition and litigation risks, (2) determining the meaning of ESG for underwriting, (3) reviewing the agenda for life and health insurers on the underwriting side, such as looking at the connection of climate change and mortality, and (4) establishing a Net-Zero Insurance Alliance. The UN-convened Net-Zero Asset Owner Alliance is a sister initiative being led by insurance companies and pension funds committed to the transition. Steven Bullock, S&P Global Sustainable1: Steven reviewed recent research conducted by his team to provide visibility on some climate-related risks and opportunities relating to the investment activity of the insurance industry in the U.S. Taking Trucost Environmental data, which is carbon emissions and fossil fuel exposure of listed and private companies, along with NAIC information on disclosures, team members were able to understand the different types of assets in insurance portfolios to calculate the climate-related issues. They then created a financial hierarchy using S&P Global data. For example, investments in corporate bonds were mapped to the issuer, and investments directly in subsidiary companies were mapped to the ultimate owner. The team looked at almost 4,000 insurance portfolios, representing approximately 1.65 million securities and $6.5 trillion in AUM. Within the portfolios, there was exposure to fossil fuel-related activities amounting to approximately $582 billion worth of revenue, or 9% overall exposure. On the opportunity side, the team looked at activities linked to the sustainable activities outlined in the EU taxonomy, which are those that can contribute to the transition to a low-carbon future. Findings showed that 22% of the AUM was linked to sustainable activities, indicating some of the potential opportunities. The team also found extensive variation depending on the size of a portfolio. The approach and findings underscores the fact that a very detailed analysis of portfolios and their exposure to fossil fuel activities is required to truly understand a company or the constituent-specific factors. In wrapping up the session, it was agreed that collaboration is needed to move things forward, as no one organization has all the answers. Source: spglobal.com

The cost of fraud across the Asia Pacific (APAC) region last year rose to 3.51 and 3.87 times the amount of actual lost transaction values due to the rise of fraudulent transactions. These figures, which came from the LexisNexis® True Cost of Fraud Study from LexisNexis® Risk Solutions for the Philippines in 2020, show a significant increase from 2019’s regional average of 3.40. LexisNexis Risk Solutions is a global leader in combining advanced analytics and global identity intelligence technology with innovative financial crime technologies like machine learning, artificial intelligence (AI), and robotic process automation (RPA). These solutions enable precise risk perspectives during the customer lifecycle, allowing customers to make timely and correct decisions and address financial crime risk. Source: 1.Manila Bulletin https://mb.com.ph/2021/08/19/ph-true-cost-of-financial-crime-compliance-rises-by-44-in-2020/ 2. Adobotech https://www.adobotech.net/financial-crime-compliance/ 3. Techpatrol https://www.techpatrl.com/regtech/ 4. The Philippine Business & News https://thephilbiznews.com/ph-true-cost-of-financial-crime-compliance-rises-by-44-in-2020/ 5. Teknogadyet https://www.teknogadyet.com/2021/08/lexisnexis-risk-solutions.html 6. Malaya Business Insight https://malayaph.com/index.php/news_business/ph-true-cost-of-financial-crime-compliance-up-44/

The inaugural multi-modular ASEAN Reinsurance Programme (ARP), developed collectively by members of the ASEAN Insurance Education Committee, was launched in the early part of 2021 in response to the call for concerted regional efforts to raise technical capabilities in reinsurance. Endorsed by the ASEAN Reinsurance Working Committee, the Programme has to-date trained about 100 young ASEAN reinsurance executives in the various aspects of Reinsurance under the various modules. This Capstone Programme was conceived to serve as a culminating learning experience for those who had attended the earlier modules of the ARP. Applying the concepts that they have learnt, participants will be grouped by countries to develop their own case-studies that are specific to their country and to present them to a panel of judges on the last day of the ASEAN Reinsurance Team Challenge. Learning will be peer-based as well as facilitated by mentors/coaches. Those who did not attend the earlier modules can benefit from the morning lectures which will touch on the topics that had been covered in these modules. A webinar highlighting the various capital management regulatory regimes in ASEAN will be organized prior to the module. Click here to register and download the brochure.

The 4th ASEAN Insurance Summit, organised by the ASEAN Insurance Council and managed by the Singapore College of Insurance (SCI), will be taking place virtually on Tuesday, 26 October 2021. This year’s Summit provides a platform for senior insurance leaders and practitioners to share their perspectives on sustainability issues, such as climate change and its impact on the ASEAN insurance industry, as well as to contribute to the ASEAN Economic Community policy-making process. Source: asiainsurancereview.com

Speaker: Mr. Joel Durand – Parametric Product Specialist

After being postponed due to the pandemic, we are very delighted to have the Inaugural of ASEAN Agricultural Insurance Working Group (AIWG), which was successfully held virtually on 29 July 2021. The meeting was attended by our esteemed Council Members representatives, with the attendance of our special guest speaker, Mrs. Rose Goslinga. As the founder and CEO of PULA Advisor, Mrs. Goslinga has shared her knowledge and experience in implementing the agricultural insurance within Africa and Asia regions, that will be adopted by the Working Group on its efforts. The establishment of ASEAN AIWG itself is hoped to provide a platform for the agriculture stake-holders, Senior Insurance Leaders, Regulators, and Institutions in the Region. The platform will be a gathering place for practitioners to have a constant dialogue, exchange information, sharing best practice among the ASEAN Member State (AMS) to foster the Agricultural Insurance development in the Region, with the ultimate goal to provide indispensable benefit to the ASEAN people. We wish to express our deepest gratitude for everyone who has been involved and making this possible.

It was the year 1972 — long before one of the greatest typhoons to date, Typhoon Yolanda, ever made a landfall in the Philippines. More than 700 people died due to the immense flooding caused by four consecutive typhoons, namely, Edeng, Gloring, Isang, and Huaning, hitting parts of Luzon for around a month. For the first time in history, the country saw what would be one of the most serious and deadly disasters known to man, “The Great Philippine Floods of 1972”. Calm Before the Storm Flooding in the early 1900s, although not non-existent, was considered to be quite tolerable back then. During the rainy season, the streets of Quiapo, Santa Cruz, and Tondo, among others, reached up to an ankle or worse, only up to knee-level. This wasn’t a problem in terms of transportation even when motorized vehicles became prominent in the 1930’s, as supplies and goods were able to reach those who are flooded with not much of a difficulty. Canals and sewages were also functional and excess water flow in nearby waters such as Manila Bay were well-constricted. Then came July 1972. Rains and increasingly alarming floods were already observed by the end of June that year, but beginning that very month, intermittent heavy rains fell unstoppably which created local flooding in Northern and Central Luzon. In a matter of days stretching to more than a month, things went out of hand. Photo courtesy of Top Gear Rains, Floods, and Aftermaths Continuous landfall of typhoons and tropical depressions succeeding Typhoon Gloring (internationally known as Typhoon Rita) in early July eventually brought the flooding to a neck-deep height. Transportation via land to northern Luzon was halted, water levels reached rooftops of residential houses in some areas, and there were shortages in medicines, food, and drinking water. Ninety percent of Manila was submerged underwater, while provinces Pampanga and Tarlac were almost entirely flooded after also experiencing a series of dam and dike failures. Photo courtesy of Top Gear In order to deliver food and emergency supplies to those affected, improvised bancas (Philippine canoe) were widely used to cross areas. No light or small vehicles were able to run; only buses and large trucks were used as transportation in some parts of Manila. This continued on for roughly six weeks. As the typhoons began to calm down, the flooding also began to dry out. Flooded areas were beginning to re-emerge, and the people were starting to reconstruct their homes and properties. However, the excruciatingly long duration of flood left a costly damage amounting up to $180 million, and approximately 2 million people were affected just by Typhoon Gloring itself. A wake-up call As it turned out, the 1972 catastrophe was only the beginning. Fast forward to September 2009, Typhoon Ondoy fell upon Luzon, affecting 872,097 Filipinos overnight. In 2013, many people lost their loved ones and properties over the strong winds and sea surges brought about by Typhoon Yolanda. Comparing the amount of damages brought by the typhoons in the past to now, it appears that what can happen over weeks back then can happen nowadays in just a day or two. With this in mind, it’s as if nature has already given us a heads-up as to what can happen in the years to come. Filipinos are not strangers to the fact that our country is indeed vulnerable to disasters. Lying directly on the typhoon belt in the northwestern Pacific Ocean, flooding has always been a problem we can never seem to avoid. Decades have passed since the 1972 tragedy occured, and with that, we must have already learned that preparing for a disaster wouldn’t hurt, or at least mitigate damages to life and property. -- Maureen Kate Basa SOURCES: Durdin, F. T. (August 1972). Slowly, Painfully, the Philippines Dries Out. The New York Times. Retrieved from https://www.nytimes.com/1972/08/14/archives/slowly-painfully-the-philippines-dries-out.html Gordon, A. H. (1973). THE GREAT PHILIPPINE FLOODS OF 1972. Weather, 28(10), 404–415. doi:10.1002/j.1477-8696.1973.tb00793.x Ragodon, R. W. (December 2019). What flooding was like in PH back in the day. Retrieved from https://www.topgear.com.ph/features/feature-articles/history-flooding-philippines-a2597-20191225-lfrm. The New York Times (August 1972). Most of Manila Swept by Floods (Archived). Retrieved from https://www.nytimes.com/1972/08/02/archives/front-page-1-no-title-most-of-manila-swept-by-floods-philippine.html Sato, Teruko & Nakasu, Tadashi. (2011). 2009 Typhoon Ondoy Flood Disasters in Metro Manila. 10.13140/RG.2.1.2817.5121. Wikipedia (n.d.). 1972 Pacific typhoon season. Wikipedia, the free encyclopedia. Retrieved from https://en.wikipedia.org/wiki/1972_Pacific_typhoon_season#Philippines Wikipedia (n.d.). Typhoon Rita (1972). Wikipedia, the free encyclopedia. Retrieved from https://en.wikipedia.org/wiki/Typhoon_Rita_(1972)#Philippines

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