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The hostilities in the Middle East have triggered a surge in discussions and notifications regarding Constructive Total Loss (CTL), but these have not yet translated into a material rise in accepted claims. The industry is seeing a trend where assets remain physically undamaged but are effectively "trapped" in conflict zones. In an interview with Middle East Insurance Review, Riyadh Re CUO Belhassen Tonat highlighted the severe operational disruptions currently facing the maritime sector. Vessels are frequently unable to exit ports, evacuate crews, access fuel, or obtain the necessary permissions to transit critical sea lanes due to: War risks and blockades International sanctions Prolonged security restrictions “In March alone, more than 20,000 seafarers were effectively trapped in the Arabian Gulf, highlighting the seriousness of the situation from both an operational and humanitarian standpoint,” Mr Tonat said. Despite these crises, the (re)insurance market remains largely insulated. “Most marine contracts are built around a physical damage trigger,” Mr Tonat noted. “Prolonged immobilisation, on its own, generally does not result in significant insured losses.” Offshore assets and "economic paralysis" A similar dynamic is playing out with offshore assets. Operations are frequently halted due to elevated threats, yet losses often go unrecovered due to war exclusions or the lack of physical destruction. Mr Tonat suggests this represents a pivot point for the industry: The problem: Geopolitical risk is increasingly manifesting as economic paralysis rather than kinetic destruction. The goal: Insurance must evolve to protect balance sheets against these non-physical disruptions. The challenge: Creating “next-level insurance” that addresses balance sheet impacts while remaining commercially viable and affordable for both the client and the insurer. Cyber: High activity, muted claims The intersection of cyber risk and regional conflict tells a similar story of intensified risk without a corresponding surge in payouts. Mr Tonat pointed to credible evidence of a conflict-linked spike in malicious cyber activity, including: Hacktivism and state-aligned attacks. Destructive malware targeting critical infrastructure, energy, and finance. Despite the increased frequency of attacks, the immediate impact on insurance claims has been limited. Mr Tonat attributes this to three main factors: Retention: Many incidents fall below policy deductibles. Absorption: Costs are often absorbed as internal operational expenses. Exclusions: Incidents are subject to rigorous scrutiny under state-sponsored act exclusions. “While we aren't seeing a dramatic short-term spike in attributable claims, the risk environment has fundamentally intensified,” Mr Tonat warned. The shift toward ideologically motivated cyber warfare reinforces a new reality: cyber risk is no longer just a localized operational headache. It has evolved into a strategic, systemic exposure with significant "tail-risk" implications for the global market. Source: www.meinsurancereview.com

Philippine President Ferdinand Marcos Jr called on ASEAN bloc members to ensure regional energy security and resilience, as he opened the 48th ASEAN Summit Retreat in Cebu on 8 May. He urged ASEAN members to ensure regional energy security and resilience, saying: “ASEAN must strengthen coordination and reinforce preparedness, [and] pursue practical collective measures to safeguard a stable energy supply and improve interconnectivity, all the while advancing alternative and renewable energy sources to protect our economies from further shocks and to respond to the urgent challenge of climate change. “We must also harness innovation, including inclusive and responsible applications of AI, to improve energy forecasting, strengthen grid management and system flexibility and support the clean energy transition.” He called for stronger regional coordination and effective implementation of action plans by the 11 member-nations of Association of Southeast Asian Nations (ASEAN) to better prepare for emerging global risks. He warned that in an increasingly interconnected world, disruptions in one region can quickly spread across supply chains, financial markets, and the daily lives of people in Southeast Asia. He said tensions in the Middle East have been deeply felt by Southeast Asian nationals through “higher living costs, supply disruptions, threatened livelihoods, economic strain, [and] growing vulnerability, both in our homelands and amongst our nationals in the Middle East”. “While the impact may differ from country to country in ASEAN at present, there is no denying that this disruption will have an impact on the future,” he said. “Even if the tensions de-escalate in time, the damage to critical infrastructure, vital systems, and trust in general will continue to be felt for years to come.” Mr Marcos also spoke of ASEAN’s collective position, calling for: The immediate cessation of hostilities The peaceful settlement of disputes The protection of civilians and civilian infrastructure The restoration of safe, unimpeded and continuous transit passage in the Strait of Hormuz He said it has never been more important to pursue collective action amid geopolitical uncertainties spilling over into the region. He also made a call for ASEAN cooperation, in order to achieve food security amid geopolitical disruptions. “Disruptions in trade and transport stemming from the closure of the Strait of Hormuz quickly affected food prices and supply, especially fertilizers, and subsequently, the welfare of our peoples,” he said. Source: www.asiainsurancereview.com

The Philippine Insurers and Reinsurers Association (PIRA) is currently participating in three separate initiatives involving the Bangko Sentral ng Pilipinas (BSP), the Department of Agriculture (DA), and the United Nations Development Programme (UNDP). Each initiative aims to develop new insurance products and frameworks that could expand the role of the private non-life insurance sector in the Philippines. 1. Parametric Insurance Knowledge Exchange with BSP The BSP invited PIRA to co-present a Knowledge Exchange Activity on parametric insurance for both the banking and insurance sectors. The initiative aims to build broader understanding of parametric products across the Philippine financial system. What is parametric insurance? Parametric insurance pays out a fixed amount when a measurable event—such as a typhoon reaching a certain wind speed or rainfall crossing a defined level—occurs. Unlike traditional insurance, it does not require a claims assessment. Payment is triggered automatically, making it faster and more predictable. The BSP sees parametric insurance as relevant to banks because it can serve as a credit risk tool for agricultural and SME loans exposed to climate and weather risks. For the insurance sector, it opens distribution opportunities through bank channels and supports product innovation in climate-linked covers. The first joint event — a webinar titled "Bundled for Impact: Credit-Linked Parametric Insurance in Practice" — is scheduled on 13 May 2026, 9:00 AM to 12:00 NN. This is the fifth session of the BSP Knowledge Exchange Series on Sustainability. PIRA member companies are contributing speakers and case studies from their own parametric insurance experience. Registration is open until 11 May 2026 at: https://tinyurl.com/Parametric-Insurance-BSP-IC-KX 2. National Agriculture Insurance Pooling Mechanism PIRA is participating in the design of a national Agriculture Insurance Pooling Mechanism, a structured arrangement that would allow private insurers to participate in the agriculture insurance market alongside the Philippine Crop Insurance Corporation (PCIC), the state insurer. The initiative is part of a broader agriculture sector reform program supported by a World Bank Policy-Based Loan to the Philippine Government. The technical working group includes the Department of Agriculture, PCIC, and World Bank agriculture insurance specialists. The group is currently working on: The pool's governance structure and risk-sharing arrangements Eligible product types, covering crop, livestock, aquaculture, and multi-peril risks Standards for how private insurer products can qualify for and participate in the pool A framework linking agriculture insurance to agricultural lending, so banks can use it as a credit risk tool for farm borrowers The mechanism is intended to address the barriers—adverse selection, catastrophe exposure, and limited distribution reach—that have historically limited private sector participation in agriculture insurance. Member companies with existing agriculture insurance portfolios or interest in the sector are encouraged to contribute input through the PIRA Secretariat. 3. Nature-Based Insurance Consultation with UNDP–BIOFIN PIRA participated in a consultation workshop convened by UNDP under its Biodiversity Finance Initiative (BIOFIN), exploring the possibility of developing insurance products for natural ecosystems in the Philippines — specifically coral reefs, mangrove forests, and seagrass meadows. Other participants included the Department of Environment and Natural Resources (DENR), the Insurance Commission (IC), and the Department of Finance (DOF). Nature-based insurance treats ecosystems as insurable assets. When a qualifying event damages a reef or mangrove belt, a policy pays out funds for ecological restoration. The parametric model is seen as the most practical trigger mechanism, since assessing physical damage in underwater or coastal environments is difficult. Similar products already exist in other countries. In Mexico, a parametric policy covers the Mesoamerican coral reef, with payouts triggered by named-storm wind speeds and released within days to fund rapid restoration. Pacific island nations have explored comparable covers for mangrove systems. Key issues discussed at the workshop included how to quantify ecosystem value for insurance purposes, how to assign insurable interest and beneficiary rights, and what regulatory framework the Insurance Commission would need to put in place to authorize such products in the Philippines. The following steps are expected: follow-on technical sessions with UNDP–BIOFIN, an ecosystem valuation study for priority reef and mangrove sites, and a regulatory review by the Insurance Commission. PIRA will also assess member interest in participating in a pilot product design exercise. Member companies who wish to learn more or contribute to any of these initiatives may contact the PIRA Secretariat at pira@pirainc.com.ph or call +63 2 811 4587.

The Insurance Commission (IC) has stepped up in support of its regulated entities by granting extended deadlines on key reportorial requirements under Circular Letter No. 2026-10, dated 06 May 2026. This regulatory relief comes in response to Executive Order No. 110, s. 2026, issued by the President of the Philippines, which declared a State of National Energy Emergency following geopolitical conflicts in the Middle East that have disrupted global oil production and transportation. The E.O. called on all government agencies to implement responsive and coordinated measures to address the impact of the global energy crisis on the domestic economy — and the IC has answered that call. As the primary regulator of the insurance, pre-need, and HMO sectors, the IC recognizes the adverse operating conditions currently faced by its regulated entities and has taken a proactive step to ease compliance burdens during this challenging period. What this means for Non-Life Insurance and Professional Reinsurance Companies: Among the extended deadlines is one of the most significant annual compliance requirements — the filing of 2025 Annual Statements. Original deadline: 30 April 2026 New deadline (without penalty): 1 June 2026 Submissions made on or before the extended due dates will not incur penalties under CL No. 2014-15 (Fees and Charges). This move reflects the IC's commitment to being a responsive and industry-sensitive regulator — one that balances the need for regulatory compliance with the realities faced by the industry on the ground. It is a welcome demonstration of government and regulatory solidarity with the private sector during times of national emergency. The Philippine Insurers and Reinsurers Association (PIRA) commends the Insurance Commission for this timely and meaningful relief measure. We encourage all member companies to take note of the extended deadlines and to refer to Annex A of CL No. 2026-10 for the complete list of covered reportorial requirements. For inquiries, please reach out to your compliance officers or visit the IC website at www.insurance.gov.ph.

In Step. That was the theme — and the afternoon pretty much lived up to it. PIRA's Regular General Membership Meeting on 28 April brought together the Philippine insurance and reinsurance community for one of its two annual gatherings. Part governance, part industry conversation, and this time around, something a little more. The meeting opened with recognition: plaques for past trustees and certificates of appreciation for the many who gave their time to PIRA's technical working groups and committees. It is easy to overlook the volume of work that happens in these committees. The GMM is when that work gets its due. Business items were taken up and approved: financial statements, budget, auditors report, and ratification of Board actions. The association's Actuarial Study was also presented to the membership. As part of the updates, members watched a short video — PIRA 2026: In Step — on the steps PIRA has taken to improve how it communicates with its membership, from a refreshed website and Viber Community to a more deliberate presence on Facebook and a dedicated email address for all circulars and advisories. New this year, PIRA used live polling via Mentimeter to hear directly from members on current issues facing the industry: energy crisis impact, climate risk pricing, talent and workforce, and the growth outlook for Philippine insurance over the next five years. To close the afternoon, Mr. Mike Ricafort, Chief Economist of RCBC, spoke on the Philippine Economic and Financial Market Outlook from 2026 to 2030. The meeting was presided over by Chairman Atty. Darren de Jesus. PIRA: In Step.

BY the time the next typhoon makes landfall, the question will not be whether Filipino farmers and fisherfolk will lose their crops, livestock and livelihoods — it will be how much, and who, if anyone, will help them recover. The Philippines has the unenviable distinction of being among the most disaster-prone countries on Earth, and our agriculture sector — already battered, undercapitalized and structurally fragile — sits squarely in the crosshairs. The proposed Public-Private Agriculture Co-Insurance Pool, advanced under the Department of Agriculture and World Bank’s PRIME Project, is not merely a technical reform. It is, plainly, a national imperative. Consider the convergence of pressures bearing down on Philippine agriculture today. Typhoons, floods, droughts and volcanic activity strike with a frequency and ferocity amplified by climate change. The Middle East crisis has driven up the cost of fuel and fertilizer, squeezing farmers whose margins were already thin. We are now the world’s largest importer of rice — a humbling status for a country whose civilization was built on it. We import fish from neighbors whose seas are smaller than ours. We even import salt. Each of these facts is a symptom of an agriculture sector that lacks the financial resilience to invest, recover and grow. And without insurance, recovery after each climatic shock becomes a slower, more painful and more incomplete affair. The Philippine Crop Insurance Corp. (PCIC) has carried this burden for over four decades, and its mandate to cover smallholder farmers remains essential. But the numbers tell their own story: Insurance penetration among rice farmers has historically hovered between 8 and 14 percent, and for corn, just 2 to 6 percent. The gap is widest precisely where the country needs coverage most — among the semicommercial and commercial farmers and fisherfolk whose productivity feeds the nation, and whose losses ripple through food prices and rural economies. PCIC alone cannot shoulder catastrophe risk at the scale climate change now demands. Nor should it have to. This is where the proposed co-insurance pool changes the equation. By bringing PCIC together with private nonlife insurers — under a shared management structure organized in coordination with the Philippine Insurers and Reinsurers Association — the pool combines public sector experience and farmer reach with private sector capital, technology and access to international reinsurance markets. The model is not experimental. Spain’s Agroseguro, Turkey’s Tarsim and Thailand’s TNCIS have all demonstrated that pooled public-private structures can deliver agricultural insurance at scale, with better products, lower costs and stronger catastrophe absorption than either sector could achieve alone. The benefits are practical and immediate. Pooling allows insurers to share risk that would otherwise be unbearable individually, making it commercially viable for the private sector to enter a market it has long viewed as too volatile. It permits the development of modern products — parametric and area-yield index insurance, for instance — that pay out quickly when triggers are met, sparing farmers the agonizing wait for loss adjustment after a disaster. It pools data across PCIC and private participants, enabling more accurate pricing and better-designed products. And it achieves economies of scale in administration, ultimately translating into more affordable premiums for the very farmers we are trying to protect. The Insurance Commission’s recently circulated draft amendments to the Regulatory Sandbox Framework for Piloting Agriculture Insurance contains amendments that streamline documentary requirements, formally recognize parametric and index-based products, and allow institutional intermediaries such as cooperatives, farmer associations and LGU-linked entities to distribute coverage. Together with PRIME’s first-loss claims fund, premium subsidies for targeted farmer segments and capacity-building investments, the architecture for a functioning, scalable pool is finally falling into place. What remains is the will to execute — and to execute quickly. Five years of pilot, with a target of 750,000 insured semicommercial farmers and fisherfolk, is ambitious but achievable. Every season we delay is a season in which a typhoon, a flood or a drought will visit ruin on families which had no instrument to share that risk. Food security, rural poverty reduction and climate resilience are not parallel goals; they are the same goal, viewed from different angles, and agriculture insurance sits at their intersection. The pool will not stop the storms. But it can ensure that when the storms come — and they will come — Filipino farmers are no longer left to absorb the loss alone. That, in a country like ours, is not a luxury. It is the floor. Source: www.manilatimes.net

The Middle East conflict is taking a major toll on global shipping and trade, leading to growing interest in alternative maritime routes, including the Arctic corridor. In a new study by trade credit risk management company, Coface, shows that over the next five years, the Arctic region’s commercial potential will remain limited despite changes in navigation conditions due to climate change. Whilst they do not constitute a credible alternative for container transport, these routes may nevertheless offer significant benefits for certain commodity flows (including crude oil and gas), particularly US and Northern European exports to Asia. Shorter routes in a strained global maritime system Maritime transport accounts for over 80% of global trade, concentrated between three major regions – East Asia, Europe and North America – and structured around a limited number of strategic corridors. This concentration makes global trade particularly vulnerable to geopolitical shocks. The disruptions observed in recent months in the Red Sea, combined with tensions around the Strait of Hormuz and changes in international trade policy – particularly US policy – highlight this vulnerability. In this context, Arctic routes appear to be a theoretical alternative, significantly reducing distances – by up to 40% between East Asia and Northern Europe, and by around 20% to the east coast of North America. Their increased navigability due to climate change raises the question of their economic viability. Real potential, but mainly focused on bulk transport To assess the economic viability of these routes, Coface compared unit transport costs on Arctic routes and traditional corridors for two major routes – Asia–Northern Europe and Asia–North America – and for three main categories of vessels: tankers, bulk carriers and containerships. The results show that, over a five-year horizon, Arctic routes will remain primarily dedicated to the transport of raw materials. Cost savings are particularly significant for liquid bulk (crude oil, diesel, methanol or LNG), with reductions of up to 45% to 50% in some cases. Dry bulk (cereals, ores, construction materials) may also become competitive, but mainly when ships can operate without icebreaker escort. Conversely, containerised transport remains uncompetitive, despite the shorter distances. Operational constraints, the limited size of vessels and the specific costs of Arctic navigation prevent it, at this stage, from competing with the economies of scale of traditional routes. A major geopolitical issue Whilst Arctic routes offer a distance advantage, their development nevertheless faces significant constraints. Navigation windows remain seasonal, ice conditions remain variable and unpredictable, and the use of icebreakers is often essential. The Arctic has thus primarily become an arena of growing strategic rivalry. The Northern Sea Route remains largely controlled by Russia, whilst China is gradually strengthening its presence and polar capabilities. The United States, too, is seeking to increase its influence in the region. Against this backdrop, the development of Arctic routes is not merely a matter of weighing up logistics costs, but also involves issues of sovereignty, control of critical infrastructure, access to resources and the reshaping of the balance of power. In the short term, the value of these routes therefore appears to be less commercial than political. Until container transport there becomes economically viable on a large scale, they are unlikely to radically disrupt the major balances of global trade. “The Arctic maritime routes are attracting attention because they shorten distances. However, the commercial interest – over the next few years – remains very limited and is concentrated mainly around raw materials,” said Coface Sector Economist Eve Barré. Source: www.asiainsurancereview.com

The Philippines' Insurance Commission (IC) recorded a near 90% increase in its fines and penalties collection in 2025, with the agency attributing the rise to intensified efforts to enforce compliance and strengthen oversight of regulated entities. The IC collected a total of PHP87.72m ($1.47m) in fines and penalties last year, representing an 86.21% increase from 2024. Despite stricter enforcement, the Philippine insurance industry sustained its expansion, with total assets rising by 7.93% and invested assets increasing by 8.01%. The pre-need sector also saw total assets grow by 8.19%, while the health maintenance organisation (HMO) segment recorded a 17.34% increase. Premium collections and product sales continued to climb, surpassing PHP502bn, reflecting growing public trust in and demand for insurance products. “Effective supervision helps ensure that the industry operates with accountability and transparency. When companies comply with regulations and consumers are protected, public confidence in insurance grows,” Insurance Commissioner Reynaldo Regalado said. The IC highlighted that enforcement actions are not merely punitive, but part of a broader effort to encourage responsible business practices and strengthen the credibility of the insurance sector. Source: www.asiainsurancereview.com

What every Filipino — and every insurer — needs to understand about the world we are living in now. LET’s be honest with each other. No one planned for this. For generations, Filipinos have survived by being resilient. We pick ourselves up after every typhoon, rebuild after every earthquake, and somehow find a way to smile through it all. That “diskarte” — that instinctive, improvisational toughness — is one of our greatest national gifts. But resilience alone, without a plan, without preparation, and without the financial tools to back it up, is no longer enough. Not in the world we are entering now. Look at what is bearing down on us simultaneously. Typhoons are arriving stronger and more frequently than the generation before us ever recorded. The rains flood provinces that never flooded before. Droughts dry up rice fields in regions that used to be reliably wet. El Niño and La Niña no longer behave on the schedules farmers memorized from their grandparents. Our 7,000-plus islands — beautiful, yes, but also sitting squarely in the world’s most active typhoon belt and along the Pacific Ring of Fire — make us among the most climate-exposed nations on Earth. And that is before we even talk about what is happening beyond our shores. Regional wars are disrupting the global systems that the Philippines quietly depends on. When conflict chokes oil supply routes, we feel it at the pump and in the price of rice. When geopolitical tensions rise in the South China Sea — in waters we have every legal right to call our own — it is not abstract. It is fish. It is fuel. It is the livelihoods of millions of Filipinos in coastal communities. And if those regional conflicts continue to escalate, the remittances that over 10 million overseas Filipino workers send home every month — the financial lifeblood of countless Filipino families — become dangerously uncertain. This is what the world now calls a “polycrisis”: not one disaster at a time, but many disasters feeding each other, arriving together, without pause. Advertisement So, what does a prudent person do? What does a prudent nation do? Our faith teaches us that hope is not passive. “Bahala na” is so often misunderstood as fatalism — as leaving everything to God and doing nothing. But the deeper Filipino spiritual tradition is one of active trust: you pray, “and then you prepare.” You trust in the Lord’s providence, “and then you build the ark.” Genuine faith and genuine preparation are not opposites. They are partners. The first thing any prudent Filipino household, business or community leader must do is honestly assess what they are actually protecting — and what it would cost to lose it. Your home. Your family’s income. Your small business. Your rice harvest. Your fishing boat. These are not just assets. They are the accumulated effort of a lifetime, and in many cases, the inheritance of the next generation. The second thing is to accept that the old ways of managing risk are no longer sufficient. Sending a prayer, relying on barangay solidarity and hoping the government arrives in time are not strategies — they are last resorts. The Filipino tradition of “bayanihan” is beautiful and real, but communities can only share what they have. When the disaster is large enough, and frequent enough, there is simply not enough to share. This is precisely where insurance — long underutilized in this country — becomes not a luxury, but a moral responsibility. The Philippines remains one of the most underinsured nations in Southeast Asia, even as it is among the most disaster-prone. That gap is not just a market failure. It is a vulnerability that compounds every time a typhoon makes landfall or a conflict overseas rattles the economy. The Filipino-insuring public must begin asking harder questions of their insurers, their government, and themselves. Is my home covered for what typhoons look like “today,” not what they looked like 20 years ago? Does my livelihood have any protection if a regional conflict cuts off my market or my supply chain? Does my family have a financial floor — not just faith and goodwill — to stand on when the worst arrives? Because the worst is arriving. Not as punishment, not as fate — but as the predictable consequence of a world changing faster than our institutions have adapted. “Diskarte” built this nation. But “diskarte” backed by preparation, backed by coverage, backed by a clear-eyed understanding of the risks we face — that is what will carry the next generation of Filipinos through. Source: www.manilatimes.net