Dear DRR Focal Points and colleagues, Warn greetings from the UN Office for Disaster Risk Reduction, Regional Office for Asia and the Pacific. The year 2020 was indeed a test of our resilience. However, we must acknowledge that while COVID has posed significant challenges to achievement of the Sendai Framework, the Sendai Framework also offers solutions to recover from COVID-19 and move the world towards resilience, marked by a multi-hazard, multi-sector and multi-stakeholder approach. Please visit https://www.undrr.org/asia-pacific to see our publications and products launched in 2020 that make a strong case for this approach. So, as we step into 2021, the first year of the “Decade of Action”, the UNDRR Asia-Pacific team wishes all of you a very happy holiday season and a safe, resilient and sustainable new year!

#InsurtechSummit2021 is the Philippines’ first major Insurtech Summit gathering speakers and audiences from around the globe. Happening this January 25 -27, 2021, we are launching the event with the theme: Winning the Digital Wave, giving focus on how the pandemic has been a defining moment to the insurance sector as the challenges it brought pushed for a pivot towards digital innovation and transformation. This 3-day virtual conference will showcase talks from a diverse set of speakers aiming to provide the insurance sector a playbook on how to survive and thrive in these unprecedented times. Get your tickets now at https://bit.ly/34dqGVV Insurtech Summit 2021 is organized by Microinsurance Intermediaries & Practitioners Association of the Philippines (MIPAP) and Impact Advisory Services (IAS) with the support of the Philippines Insurance Commission, Philippine Life Insurance Association Inc. (PLIA), Association of Insurers and Reinsurers of Developing Countries (AIRDC), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), and Mutual Exchange Forum on Inclusive Insurance (MEFIN).

Insurance Institute for Asia and the Pacific (IIAP) and ASEAN Insurance Council (AIC) will be organizing again the 3rd ASEAN Microinsurance Course 2021.

WHAT: Philippines BBL Building Resilience using the GeoRiskPH WHO: with DOST Usec. Renato Solidum WHEN: NOVEMBER 26, 4:00-5:30pm

LINK: https://youtu.be/045kSCdHU68

When: Nov 19, 2020 01:00 PM PHILIPPINE TIME ​ Register in advance for this meeting: https://us02web.zoom.us/j/83803721338 pwd=ZjVvUE1maFI5c2NRcm9iTVgwNXBMdz09 After registering, you will receive a confirmation email containing information about joining the meeting.

THE recent decision of the Department of Finance(DoF) not to cap the minimum net worth requirement of insurers at Php900 million will likely cause a further reduction of the Filipino-owned insurers. The next increase of capital is mandated at Php1.3 billion which means an additional infusion of Php400 million to meet the final requirement of Republic Act No. 10607.  In other words, all insurers are given two years to comply before December 31, 2022. The Insurance Commission report of 2019 disclosed that only 48 of the 58 non-life insurers were Filipino-owned.  The report also clearly shows that 28 Filipino insurers could not meet the capital increase of Php900 million. On the life sector composed of 30 insurers, only twoFilipino companies did not meet the Php900-million requirement. Another revelation was that of the 57 insurers, only 26 non-life insurers produced more than Php900 million in premium whilst 31 Filipino-owned companies made much less. The impact of the COVID-19 pandemic has caused a slowdown of business opportunities such that the insurers will have a difficult time in raising the Php400 million to meet the Php1.3 billion paid up capital. It is therefore expected that there may be again a reduction in the number of Filipino insurers. With the foregoing as a background, we reiterate the appeal of Filipino insurers for the DoF to appreciate their situation, as there are other ways to create “virtual capital” to expand protection of clients and the insurer, using a reinsurance facility to share risk exposures with reputable and global reinsurance companies. The insurers have access to reinsurance facility support to cover the risk beyond their planned retention, which is limited to 20% of their capitalization. This reinsurance support allows insurers to protect much bigger risks for their valued clients. Based on their past portfolio, insurers can also negotiate with reinsurers for an annual reinsurance treaty for automatic sharing of risks. They can also secure reinsurance support on a case by case basis, a facultative support for one big client at a time. Further, insurers can secure an Excess of Loss(XOL) protection for their annual retained risks, with a manageable deductible share for each and every event loss. This XOL reinsurance facility protects the insurers from excess of loss from their annual aggregate risk exposure. The proper management of these reinsurance support expands the capability of insurers to protect bigger portfolio of their valued clients by sharing the bigger risk exposures with reinsurance partners. These global reinsurers also provide innovative reinsurance solutions. These reinsurance treaties are reviewed and monitored by the Insurance Commission. Our National Reinsurance Corporation provides this local reinsurance support. All other reinsurance companies must be registered locally with a local representative agent. In this respect, we would advocate that local insurers can continue to offer protection for their valued clients by leveraging the reinsurance partnership – like a “virtual capital” to enhance their financial stability. *The author is Editor of Insurance Philippines. REYNALDO A. DE DIOS Link to original post: http://pilipinomirror.com/reinsurance-a-viable-protection-in-lieu-of-increasing-capitalization-of-insurers/

Local insurers in the Philippines will still face significant pressure on underwriting growth and profitability amid the ongoing COVID-19 pandemic with the recent rejection of a proposal to relax minimum capital requirements, says AM Best. A new Best’s Commentary, titled, “Philippine Insurance: Dropped Proposal to Amend Minimum Capital Rule May Have Mixed Impact,” notes that the government has stood firm on the capitalisation requirement, which is to be met by 2022. According to the commentary, the requirement not only prompted capital injections in the market to strengthen the insurers’ capitalisation, but also led to increased merger and acquisition (M&A) activity in Philippines’ highly fragmented insurance market. However, in view of the economic fallout from COVID-19, AM Best notes that there is a possibility that M&A momentum and the impetus to shore up capital positions may falter over the near term. All insurers will need to have a minimum net worth of at least PHP1.3bn ($27m) by 31 December 2022. Many small- and medium-sized companies will need to bolster their capital bases to comply with the increasing minimum net worth requirements, and given the remaining time period, AM Best expects that this will likely be achieved through capital raised with new/ existing shareholders, rather than through internal capital generation. Last month, the government scrapped a proposal to cap the minimum net worth requirement of local insurance players at PHP900m to ensure the financial strength of the industry, according to the Insurance Commission. It will implement minimum capital requirements of PHP1.3bn as was originally planned. By Asia Insurance Review Link to original post: https://www.asiainsurancereview.com/News/ViewNewsLetterArticle/id/74501/Type/eDaily/Philippines-Insurers-face-significant-pressure-on-profits