By Michael F. Rellosa Over and on top of the fact that the Philippines is considered the most vulnerable country to natural catastrophic perils such as earthquakes, volcanic eruptions, typhoons and floods, our increasingly interconnected world makes the repercussions of natural catastrophes extend beyond borders, affecting communities, economies and ecosystems alike. The recent Myanmar-Thailand earthquake; wildfires in Korea, the United States, Mexico and Canada; floods in Bolivia and Spain; and the reawakening of various volcanoes around the world serve as a stark reminder of our vulnerability to such events. Occurring on March 28, 2025, the Myanmar earthquake not only reminded the region of its seismic risks but also raised critical questions regarding our preparedness and responses to natural disasters. As stakeholders in both the government and the private sector, we must acknowledge the urgency of this situation and act decisively to mitigate future catastrophes. The Myanmar-Thailand earthquake, which registered a magnitude of 7.7, caused widespread panic and damage, displacing thousands and leading to loss of life. Reports emerged of collapsed buildings, disrupted transportation networks and strained health care systems. As nations grappled with the immediate aftermath, it became increasingly evident that this incident was not an isolated event. Rather, it formed part of a broader pattern of natural disasters that have escalated in frequency and intensity due to climate change. In recent years, we have witnessed hurricanes that have devastated parts of the Caribbean, wildfires that have consumed vast areas in Australia and the United States, and floods that have submerged entire cities in various parts of the globe. The time for sticking our heads in the sand is over. The warnings from nature are loud and clear, and we must respond collectively and proactively. Governments and the private sector share a pivotal role in addressing this urgent challenge. We must forge collaborations that bring together resources, expertise and innovative solutions to develop comprehensive disaster preparedness strategies. This entails committing to investing in resilient infrastructure that can withstand the impacts of natural disasters. From retrofitting buildings to comply with earthquake-resistant standards to reinforcing flood defenses, these proactive measures are necessary to protect communities and ensure their safety. Moreover, the private sector possesses the ingenuity and resources to contribute significantly to disaster preparedness. Companies can implement business continuity plans that prioritize employee safety and ensure the resilience of operations in the event of a natural catastrophe. Businesses should also engage in corporate social responsibility initiatives that support local communities in disaster-prone areas. By participating in assessments of risk and resilience, the private sector can cultivate a culture of preparedness that empowers individuals and communities alike. Another critical aspect of preparation lies in education and awareness. We must prioritize research and development to enhance our understanding of the risks we face as a society. Early warning systems, which can provide information on impending catastrophes, are essential in saving lives and protecting livelihoods. Technology can play a pivotal role in this regard. The use of data analytics, satellite imagery and machine learning can help develop forecasting models, which can predict when and where natural disasters are likely to strike. By investing in education and training programs, we can ensure that communities are informed and ready to respond effectively in times of crisis. The recent incidents of natural catastrophes also highlight the importance of governmental policies that promote environmental sustainability and disaster readiness. Policymakers must act urgently to advocate for regulations that prioritize resilient infrastructure and community preparedness. By supporting collaborative initiatives between government agencies, private businesses and local communities, we can lay the foundation for a resilient future. Policies that encourage research into climate adaptation strategies will further enable us to both understand and address the risks posed by natural disasters. The Myanmar-Thailand earthquake, like other recent disasters, serves as a profound reminder of the collective responsibility we share as stakeholders. If we continue to disregard nature's warnings, we risk facing more substantial and devastating consequences. It is our duty to advocate for change, to demand accountability and to collaborate for the common good. In conclusion, the time to act is now. Let us not wait for the next catastrophe to strike before we choose to listen to nature's warnings. By coming together as stakeholders in a shared endeavor, we can protect our communities, economies and environments for generations to come. The call to action is clear: we must address the growing menace of natural disasters with urgency, determination and cooperation. Together, we have the power to shape a secure and resilient future, one that is prepared for the challenges that lie ahead. Source: manilatimes.net

A series of wildfires that broke out in Japan and South Korea in March this year were fuelled by human-induced climate change according to a new rapid analysis. The analysis released by a group of European researchers, ClimaMeter, a EU-backed project studying the impact of climate change on extreme weather, said the ongoing wildfires in both countries were made more intense due to persistently dry soil, strong winds and unusually high temperatures. In the present study, researchers compared patterns of the atmospheric pressure system of 1987-2023 with those of the 1950-1986 period, when they were less affected by climate change. The results showed that the weather in the latest period was warmer by up to 2 degrees Celsius, precipitation was down by up to 2mm per day and winds were stronger by up to 4.8kmph. French National Centre for Scientific Research scientist Davide Faranda said, “In weeks, the region saw record snowfall and the worst fire in decades. Climate change isn’t just warming the planet, it is amplifying extremes of different nature, fuelling disasters from both fire and ice in the region.” University Pablo de Olavide in Spain researcher Carmen Alvarez Castro said, “The wildfires in eastern Asia in March 2025, strengthened by human-driven climate change, underscore the increasing frequency and severity of extreme weather events, stressing the urgent need to tackle the rising impacts of climate change.” In their analysis, the researchers factored in different natural phenomena such as El Nino and concluded that, while some of these changes can be caused by natural variability, the contribution of human-driven climate change was undeniable. While an average of 1,300 wildfires strike Japan every year, this year has seen a spate of events that are much worse than most. In addition to the Ofunato wildfire, which razed 2,900ha of vegetation, a forest fire in Imabari, Ehime Prefecture continues to rage, having spread some 300ha. The city has ordered a total of 3,800 households to evacuate from their homes. Source: asiainsurancereview.com

Hong Kong-based life insurer CTF Life plans to reduce absolute Scope 1 and 2 greenhouse gas emissions by 37.8% by the financial year 2029 (FY2029). The life insurer’s carbon reduction targets have been officially validated by the Science Based Targets initiative (SBTi), a corporate climate action organisation that enables businesses worldwide to play their part in combating the climate crisis. The result shows CTF Life's commitment to decarbonisation and provides a set of measurements by which the company's stakeholders can monitor its ongoing efforts. In October last year, CTF Life demonstrated leadership in advancing sustainability through science-based targets aligned with the Paris Agreement and became the first company from the banking, diverse financial and insurance sector that primarily operates in the Greater Bay Area to submit a carbon reduction commitment letter to the SBTi. Additionally, within its Scope 3 emissions, CTF Life commits to the following, which covers 65% of its total investment and lending by assets: To reduce the greenhouse gas emissions per MWh from the electricity generation sector within its listed equity and corporate bond portfolio by 59% by FY2029, and To have at least 44.8% of the invested value in its listed equity and corporate bond portfolio allocated to companies that set SBTi-validated targets by FY2029. CTF Life executive director and CEO Man Kit Ip said that the insurer recognises that climate action is both a critical responsibility and a powerful opportunity to inspire and drive meaningful change. “The validation of our targets underscores our unwavering commitment to reducing emissions across our operations and investment portfolio. This milestone reaffirms our dedication to building a sustainable future while creating value beyond insurance for our stakeholders," he said. Source: asiainsurancereview.com

The Philippine Insurance Commission (IC) is encouraging insurance companies and health maintenance organisations (HMOs) to explore offering more gender-responsive policies, considering anticipated increases in healthcare costs nationwide. The IC has urged providers to explore and broaden insurance and HMO plans that address gender-specific health risks and needs. This could include coverage for maternal and reproductive health, gender-specific critical illnesses, and related medical services. “The commission supports initiatives that promote inclusivity, empowerment, and financial resilience through the availability of specialised insurance and HMO products that address women’s health, financial security, and overall well-being,” Insurance Commissioner Reynaldo A Regalado said in a press statement. “These products provide comprehensive protection tailored to the diverse needs of individuals, ensuring that financial security and healthcare remain accessible for all,” he added. This policy recommendation comes at a time when healthcare costs are on the rise. A recent study by WTW predicted an 18.3% increase in medical expenses in the Philippines for 2025, one of the highest growth rates in the Asia-Pacific region. The survey highlighted several factors contributing to this trend, such as the higher demand for health services, rising hospital and professional fees, and the increasing prevalence of chronic diseases. Source: asiainsurancereview.com

New capital requirements for insurers in Korea, including a lower capital adequacy benchmark, are expected to relieve the insurers' capital burden while raising their capital flexibility and quality, said Fitch Ratings in its latest report. The reduced capital burden would also alleviate financial pressure on insurers, making it easier for them to comply with regulatory requirements. The Korean regulator plans to lower the capital adequacy benchmark by 1H2025 under the Korean Insurance Capital Standard. The benchmark ratio is likely to be reduced to 130%-140% from the current 150%. This adjustment will affect the benchmark for certain operational events such as the optional redemption condition of capital securities, M&A and licensing. The regulator will simultaneously introduce core capital ratio requirements to enhance capital quality. The introduction of a mandatory core capital ratio requirement will tighten the quality of capital that insurers hold. The regulator’s imposition of a minimum limit of core capital, such as paid-in capital and retained earnings, is intended to ensure that insurers maintain a sound capital base to absorb potential shocks in adverse scenarios of financial stress or market volatility. Fitch believes that the new capital requirements announced by the Financial Supervisory Service on 12 March 2025 are partly in response to the excessive reliance on capital security issuance to maintain capital adequacy, which could threaten insurers’ financial soundness. The new rules are likely to decrease the need for capital issuance, depending on the insurers’ capital structure and risk appetite. Source: asiainsurancereview.com

A new survey has revealed that uncertainty around long-term earnings sustainability, emerging risks and affordability pose new challenges for insurers through 2030. Bain & Company’s report, “Bridging the Protection Gap: Affordability, Access, and Risk Prevention”, shows that protection gaps are expected to worsen across all lines of the insurance business through 2030 as insurers worldwide contend with rate-driven growth that is unsustainable. The challenges facing the insurance industry lie in matching price-to-risk profitably. This is in part due to changing risks such as the rise in natural disasters and cyber attacks, unaffordable property premiums, and the declining relevance of life insurance—especially among younger generations. Only one-quarter to one-third of the damage from natural disasters will be covered by insurance by 2030; for mortality, it could be less than half, Bain found. Bain’s global insurance practice head Sean O’Neill said that, bolstered by unsustainable tailwinds, insurance companies find themselves at an inflection point. “Over the past couple of years, we’ve seen rate increases in the property and casualty sector and interest-rate–driven annuity sales in the life sector. While capital and balance sheets remain reasonably strong, several challenges have emerged, and profitability has come under pressure for many lines of the insurance business. Insurers will need to be proactive and act now if they wish to navigate these impacts,” he said. The report shows that investors are skeptical about US insurers’ prospects for future growth but are more bullish on life insurers in emerging markets. Valuations of US life players include negative “white space” from long-term earnings growth, suggesting either declining profitability or hidden losses yet to emerge from today’s in-force blocks. P&C insurers face the same problem, albeit on a smaller scale, due to concerns around the sustainability of recent price increases alongside potentially increasing claims. Rising cyber risks Another challenge facing insurers worldwide is the threat of rapidly increasing cyber risks in a much more digitally enabled and data-rich world. Costs from global ransomware damage are expected to climb to more than $250bn within the next six years, and actions by individual carriers will not be sufficient to address future risks, Bain warns. The Bain survey also reveals that despite several challenges, insurers face a rich set of opportunities, including recent technology advancements. The rapid proliferation of unstructured data and the rise of AI are reshaping the industry landscape and harnessing data presents insurers with a unique opportunity to enhance affordability and access. Bain anticipates that AI-driven industry improvements will allow insurers to realise a 10%–15% revenue uplift, up to 30% operating expense savings, and a 30%–50% reduction in P&C. Source: asiainsurancereview.com

Supported by improving results and relatively benign natural catastrophe loss activity across the region, renewals were broadly favourable for Asia Pacific insurers at 1 April, says Aon, a leading global professional services firm providing a broad range of risk, retirement and health solutions. In the report titled “Reinsurance Market Dynamics – April 2025 Renewal”, Aon points out that 1 April is a key renewal period for Asia, with around 60% of the region’s treaty business renewing, and as much as 95% in Japan. Supported by improving results and relatively benign natural catastrophe loss activity across the region, renewals were broadly favourable for Asia Pacific insurers. Reinsurers continue to see Asia Pacific as a diversifying growth opportunity and were willing to deploy additional capacity at 1 April. While the Los Angeles wildfires in January formed the backdrop to negotiations, they had little to no impact on capacity, pricing and terms for APAC renewals. Facultative capacity has also increased, including Aon’s recently launched Marlin APAC, a new exclusive facility for Asia Pacific clients currently with up to $15m of dedicated capacity available per risk and growing. Across the region, insurers enjoyed healthy reductions, particularly in Japan and South Korea, where some outcomes exceeded pre-renewal expectations. Risk-adjusted rate reductions in the mid-to-high single digits were typical, with double-digit reductions available in some territories. Insurers were also able to leverage the market’s appetite for property catastrophe business to achieve more favorable terms across the board, including for previously challenging areas like US casualty and property per-risk covers. With stable demand and growing capacity, buyer-friendly conditions are expected to continue through 2025, which sees further renewals in Greater China as well as major renewals for Australia and New Zealand. Source: asiainsurancereview.com

The insurance industry's losses due to wildfires are rising, with an escalation in wildfire risk beyond the traditional fire seasons and regions, commented the director of wildfire models, North America at Moody's, Firas Saleh. Escalated wildfire severity and expanded exposure in wildfire-prone areas, alongside an increase in reconstruction costs, have all contributed to devastating impacts on insurers’ bottom lines, he added. Explaining why the situation matters, Mr Saleh pointed out: In South Korea, the largest wildfire ever recorded has devastated forests and towns, destroying priceless cultural sites and causing significant loss of life.  This escalation in wildfire risk is due to several key factors. Increased urbanisation in high wildfire hazard areas and development in the wildland-urban interface contribute to the growing wildfire threat. As these challenges persist, it is crucial to understand the underlying causes and continue to implement comprehensive risk preparedness efforts that extend beyond traditionally fire-prone regions. South Korea  Separately, Moody’s Ratings commented on the credit implications of Korea’s wildfires for Korean non-life insurers. Moody’s Ratings AVP-analyst Gil Jo said, “The recent wildfires in Korea's Gyeongsangbuk-do region are likely to lead to higher claims for Korean non-life insurers. However, we expect the ultimate losses to remain manageable for several key reasons: the affected areas are primarily mountainous and rural; a significant portion of the damaged properties are uninsured; and non-life insurers typically cover only 10%-20% of the total losses resulting from domestic wildfires. Additionally, insurers' net losses will be limited due to their reinsurance arrangements, particularly for excess-of-loss coverage.” South Korea’s most deadly wildfires that razed the southeastern part of the country began about two weeks ago and have burned more than 48,000ha, equivalent to about 80% of the area of the capital, Seoul. Japan saw the worst wildfires since 1975 in early March around the northern city of Ofunato in the Iwate region. It blazed for more than a week over 2,900ha. Source: asiainsurancereview.com

According to a new global survey, a large majority of executives in Asia Pacific believe that the current economic climate is making meeting their sustainability targets less of a priority. The "Risk & Resilience report: Spotlight on Environmental & Climate Risk 2025" report published by the specialty insurer Beazley reveals that 83% of executives based in Asia believe that the current economic climate is making meeting their sustainability targets less of a priority, while globally, 73% of executives feel so. The report also found that 77% of the executives in Asia are adopting new risk management procedures due to extreme weather, compared to 72% of executives globally. Also, 26% of regional executives ranked economic uncertainty as their top risk, up from 20% in 2024. Further, 22% of Asia-based executives ranked climate and associated risk catastrophe as a top risk concern, compared to just 20% of global executives. A press release by Beazley said, “In the current economic environment, executives are focusing on the challenges of the here and now, leaving their businesses unprepared and exposed to the intensifying environmental and climate risk.” The report included 3,500 global business leaders and how they perceive the threat posed by climate risk, the energy transition, greenhouse gas emissions and environmental damage to their operations today. The report said the last 12 months have brought home the real, far-reaching and devastating impact of extreme weather events – and businesses are increasingly exposed. Yet despite the pressing need to protect their business from the growing impact of extreme weather, concerns about the uncertain economic environment are making meeting sustainability targets less of a priority (83%). Also, only 22% of Singapore-based executives rank climate and associated catastrophic risk as a top concern. Combined, this paints a concerning picture of businesses being left vulnerable and unprepared. As Singapore sets ambitious targets for sustainable development, particularly in relation to maritime energy transition, over two-thirds (68%) of Asia-based executives believe they are struggling with the transition to non-carbon energy sources. Yet concern around the energy transition risk is falling, with just 17% selecting it as their top environmental risk this year, down from 25% in 2024. The report said that the regulatory road for international businesses is complex. With a host of new and stringent regulations set to come into force in some regions, and diverge in others, navigating this landscape will prove difficult. Beazley head of Asia Pacific Jessica Schappell said, “Communities and businesses across Asia are experiencing the devastating and wide-ranging impact of climate risk, yet our data reveals that executives are turning their attentions to the economic uncertainties of the here and now. But as Asia warms up faster than the global average, businesses can’t afford to underestimate the impact of climate and environmental risks. “Now is the time to invest in resilience and with 77% of business leaders in Asia telling us that they plan on adopting new risk management procedures due to extreme weather, the role of insurance is vital.” Ms Schappell said, “Climate risk can often feel too big to tackle for many, but by harnessing forward looking climate risk data, and through innovative solutions, insurance can help businesses in identifying, understanding and preparing for these new exposures.” Source: asiainsurancereview.com