The Insurance Institute for Asia and the Pacific, Inc. (IIAP), in collaboration with the Philippine Insurers and Reinsurers Association (PIRA), will be holding the Philippine Insurance Summit 2024 with the theme "Navigating the Future: Trends, Technology, and Transformation in the Rapidly Evolving Landscape of Insurance." on May 30, 2024, at the New World Hotel, Makati City Step into the future of the insurance industry with "Navigating the Future: Trends Technology and Transformation in the Rapidly Evolving Landscape". This summit is your gateway to exploring the dynamic interplay between era of rapid change and innovation, this event brings together industry leaders stakeholders and experts to delve into the key forces shaping the future of insurance. ​ Join us as we dive into how data analytics and AI are reshaping risk assessment and enhancing customer experiences. Discover the innovative agile methodologies driving transformation beyond IT and uncover the profound implications of technology on the future of insurance in the digital age.  Stay ahead of the curve by staying abreast of local industry developments and market outlooks. Engage in thought provoking panel discussions and glean insights into the emerging trends in motor vehicle insurance. ​ Whether you are a seasoned executive, an industry veteran, an aspiring professional insurance or a tech enthusiast "Navigating the Future" offers a unique opportunity to seize new opportunities, exchange ideas and network with industry stakeholders. For more information, kindly visit: www.philippineinsurancesummit.com

The Philippine Insurers and Reinsurers Association (PIRA) , in partnership with the Insurance Institute for Asia and the Pacific (IIAP) and the Philippine Insurers Club (PIC) will be holding the Philippine Insurance Cup Golf Tournament to be held on October 11, 2024 at the Riviera Golf Club, Inc. in Silang Cavite . The event aims to provide industry practitioners, clients, friends, and acquaintances an avenue to network among themselves in the spirit of cooperation, collaboration, and friendly competition. As a valued business partner and friend of the Industry, it is our pleasure to invite your company to be one of our esteemed Sponsors. For your ready reference, we are attaching a detailed summary of the available Sponsorship Packages for your consideration. To confirm your interest, you may access the link provided below. We hope to receive your Sponsorship confirmation on or before September 25, 2024 to allow ample time for the preparation of banners, logos, videos and other materials for the event. For additional information or other inquiries, please feel free to get in touch with our Secretariat: Jadeson Ortega – jjortega@pirainc.com.ph Marilou Serrano – mserrano@pirainc.com.ph We thank you in advance for considering being a Sponsor and we look forward to sharing a fun-filled day with Industry friends and partners.

In celebration of this year's ICM, the Philippine Insurers and Reinsurers Association (PIRA)  in collaboration with the Insurance Institute for Asia and the Pacific (IIAP)  and the Philippine Insurers Club (PIC)  and in cooperation with the Insurance Commission (IC),  are pleased to announce a series of activities lined up for this October. Registration for each of the event is provided below: DOJ SEMINAR ON ANTICOMPETITION Register here: https://forms.gle/p1nMR2BvdPUu6ToP9 ICD CORPORATE GOVERNANCE ROUNDTABLE Register here: https://us06web.zoom.us/meeting/register/tZ0sc-GrqjsuGN3mpDo3sdDvjJQKkE5JCASf Updates to be provided when available.

By Herminia S. Jacinto The Philippine insurance industry celebrated Insurance Consciousness Month during the whole month of October. This celebration was done simultaneously with the other insurance industries in the Asian/Asean region. The purpose of the celebration was to further enhance the appreciation of the insurance industry by its members and customers. The industry associations, the Philippine Life Insurance Association (PLIA) and the Philippine Insurers and Reinsurers Association (PIRA), lined up various activities like seminars, meetings with regulators, and sports events which were well attended by the many members of the industry. PLIA hosted a seminar on "life goals" in partnership with Mapua University. Both associations sponsored golf tournaments in the Canlubang and Riviera golf clubs for their members and guests. PLIA opened the month-long celebration with basketball and volleyball tournaments at the Assumption College gymnasium. PIRA held seminars on various topics like ESG and sustainability, anticompetitive acts and cartels, corporate governance and cybersecurity, which topics are very timely and relevant to insurance companies' operations now. All these events were intended to support the theme of the celebration, which is "Insurance Consciousness." Amid all these events came Typhoon Kristine and Super Typhoon Leon, within a week of each other. Both typhoons took many lives and destroyed many properties as well. Upon seeing the destruction and the people climbing rooftops just to be saved, buildings collapsing, and vehicles floating, what immediately came to my mind was — do they have insurance? If yes, are they insured to value and insured for what we call "acts of God" like typhoons and floods? It is a well-known fact that buying insurance covers for properties and vehicles is not top of the mind of the owners of such properties. Insurance covers of mortgaged properties are usually monitored by the lending institutions to protect the amount of the loan only. And more often than not, the insurance covers are handled by the supplier (as in car dealers for vehicles) and the bank so the customer may just assume that the protection is adequate. Individual agents are very good at explaining these details to their customers but I heard that we have less of them now in the nonlife or property and casualty sector of insurance. I admire so much the life insurance agents, or financial advisors as we call them now, because of their personalized approach to the customer. It requires a lot of talent and charisma to make the customers aware of illness and death and convince them to buy an insurance policy. Life insurance agents and their clients become friends even after the sale. Sana all! It is the responsibility of the insurance companies to hire and train their sales force, which includes the agents, to explain and convince the customer to insure and insure to value their properties. Many property owners need good advice from insurance professionals who can help them assess their insurance requirements. The companies should also do their part in reminding customers about the importance of insuring their properties. As part of the celebration of Insurance Consciousness Month in October, when many typhoons visit the Philippines, the insurance industry should mount impressive campaigns about the need for insurance protection. The recent activities were mostly addressed to the members of the industry and almost none to the buyers of insurance. It was like preaching to the converted. There is no disagreement that our employees should be knowledgeable and up to date about the business, but let us educate the buyers too. A full-page ad may not be as effective as in the past when people bought and read printed newspapers, but plugs in some popular TV shows may make them more insurance-conscious. Imagine the impact of Luis Manzano or Vice Ganda plugging insurance into their TV programs. In past years, some insurance personalities were invited as guests on popular radio programs where they talked about the importance or need for insurance. Facebook and Instagram are full of reels about people and events. Reels showing the effect of the recent typhoons can be shown but slanted towards the advantage of being protected by insurance. The insurance industry has yet to maximize the use of social media to broadcast its mission — the protection of lives and property. Source: manilatimes.net

The health maintenance organization (HMO) sector may have to be passed around again as the Insurance Commission (IC) is seeking other agencies to handle the sector nearly 10 years after it was placed under its jurisdiction. On the sidelines of the Pru Life UK Takaful launch late Monday night, IC commissioner Reynaldo Regaldo said the agency is working with Congress particularly Rep. Anthony Golez on how to go about the HMO sector. Regalado said the IC is still having difficulties in handling the industry given its complexities unlike the overall insurance sector. HMOs are entities legally organized to provide or arrange for the provision of pre-agreed or designated health care services to its enrolled members for a fixed pre-paid fee for a specified period of time. “It’s not very clear on how we’re supposed to be handling them. It’s also unfair for the HMOs when they were placed under us because there are so many requirements that we ask of them because they are covered by the anti-money laundering rules,” Regalado told reporters. “They are regulated entities and yet there’s no chance of money laundering in HMO products,” he said. It was in November 2015 when then president Benigno Aquino III transferred the jurisdiction of HMOs from the Department of Health (DOH) to the IC. At the time, the Aquino administration saw the need to streamline and consolidate functions related to the regulation of HMOs to eliminate redundancy, simplify the organizational structure, improve accessibility and accountability, provide efficient use of specialized expertise and realize savings in administrative costs. Even after the transfer, all issues relating to medical matters including, but not limited to, practice of the medical profession, medical procedures and standards and health programs, policies, services, and facilities were still referred to the DOH. “If I were to choose, I’m willing to let go as long as it will be transferred to a better agency,” Regalado said. “For me, if there would be better people or a better organization to handle it, I’ll be more than happy to transition,” he said. As such, Regalado noted that there is a need to get the wisdom of legislators and ensure that any move will be covered by law for a clearer mandate. Regalado, however, cannot say which agency would be competent to handle the sector. In a related development, the IC is still reviewing the plan of increasing the minimum paid-up capital of HMOs. Regalado said the original target of the end-2024 deadline will likely be delayed. “It’s a moving target. We are still reviewing,” he said. Last July, the IC issued a draft circular calling for an increase in the prevailing minimum paid-up capital requirement to P50 million for existing HMOs and P100 million for new ones by year-end. Currently, existing domestic HMOs must have a minimum paid-up capital of at least P10 million. A quick look at IC data showed that these eight firms include Wellcare Health Maintenance Inc. (P33 million), Asian Care Health Systems Inc. (25 million), IMS Wealth Care Inc. (P20.6 million), Carewell Health Systems Inc. (P17.5 million), Health Plan Philippines Inc. (P17 million) Dynamic Care Corp., MetroCare Health Systems Inc. and Optimum Medical and Health Care (P10 million each). Among the HMOs, Medicard Philippines Inc. has the highest capital base at P3.45 billion followed by Maxicare Healthcare Corp. at P1.85 billion. Based on the IC circular, the capital will be raised again to P100 million for existing and new HMOs by end-2025. After that, further hikes will be done every three years which means that minimum paid-up capital should be P200 million by 2028, P350 million by 2031 and P500 million by 2034. Community-based and cooperative HMOs will maintain a paid-up capital equivalent to 50 percent of what is prescribed for a regular HMO. The HMO industry suffered an unprecedented net loss of P1.44 billion in 2022 and reeled from the continued increases in healthcare costs and utilization rates last year that resulted in P4.27 billion in losses. The HMO industry is just starting to bounce back after it reverted to profitability in the January to June period, with net income reaching P636.6 million as against a net loss of P1.19 billion in the same period last year. Total assets handled by HMOs went up by 12 percent to P69.27 billion while total invested assets inched up six percent to P21.31 billion. Liabilities, however, also increased by 13 percent to P58.32 billion. Source: philstar.com

The Australian Prudential Regulation Authority (APRA) is studying ways to promote general insurers' access to reinsurance, including alternative reinsurance arrangements. In a letter yesterday to general insurers and reinsurers, APRA member Suzanne Smith said that to date, general insurers have largely utilised traditional reinsurance solutions. To continue to access appropriate, cost-effective reinsurance, industry has expressed an appetite for alternative reinsurance arrangements. She said, “In our August 2023 letter, APRA reminded insurers that APRA’s prudential standards permit the use of alternative reinsurance arrangements, such as catastrophe bonds and other types of Insurance Linked Securities (ILS), and invited insurers to engage with APRA should they wish to use alternative reinsurance arrangements. Industry feedback has indicated that aspects of APRA’s prudential framework present challenges to accessing the full suite of available reinsurance solutions.” Consultation exercise Ms Smith added that APRA is consulting on targeted adjustments to its GI reinsurance framework. APRA seeks:  general feedback on adjustments to APRA’s GI reinsurance settings and processes that would assist insurers in accessing reinsurance; and  specific feedback on adjustments in relation to APRA’s GI reinsurance eligibility criteria   Any adjustment to the prudential framework will be assessed in line with the following objectives:  promoting access to all forms of reinsurance solutions whilst ensuring insurers’ financial resilience is maintained in alignment with the object of the current insurance capital framework;   reducing regulatory burden and improving transparency for industry; and   ensuring consistency with international standards and practice.  APRA is also proposing to make technical updates to the GI reinsurance framework. These updates will in aggregate reduce regulatory burden by streamlining existing processes, improving transparency, clarifying APRA’s expectations, and improving consistency across industry. APRA says it is particularly interested in views on the following questions:  1. How could APRA adjust its reinsurance settings, or its process for approving the capital benefit of reinsurance arrangements, to improve access to all forms of reinsurance for general insurers?   2. What are the likely impacts (including costs and benefits) of APRA adjusting requirements regarding all perils, reinstatement and capital requirements for reinstatement premiums as outlined in Attachment B?   3. Are there any further technical refinements to the GI reinsurance framework that APRA should consider?  Written submissions should be sent to  PolicyDevelopment@apra.gov.au  by 17 February 2025. Source: asiainsurancereview.com

Ethical AI includes explaining how models work by Sarah Si L-R: Mr John Maroney, Ms WenWen Chen, Mr Ian Chapman-Banks, Mr Marc Haushofer, Ms Sofia Kyriakopoulou and Ms Anne Lohbeck AI first made its way to the industry in late 2022, according to SCOR group chief data and analytics officer Sofia Kyriakopoulou, where it “created a lot of excitement”. However, Ms Kyriakopoulou also said, “The struggle was always scalability. The previous models were simply very laborious to train or to annotate. It really took an effort … to make them work. And then it was very expensive to [scale them up] so they could cover the line of business or a certain region, but it was very hard to go beyond.” Generative AI models then came pretrained, she said. “They worked very well with unstructured data and insurance,” she said, leading to the creation of proxies. This year, the insurance industry then moved to shaping strategies, creating foundations and building the right frameworks around what could be called “responsible AI”, according to Ms Kyriakopoulou. “As we move ahead, we are going to [see some] players getting all the benefits. But the technology is also still evolving, right? And we see incredible improvements of versions that come out,” she said. An example, Ms Kyriakopoulou said, includes extracting elements and summaries from electronic health records that would allow underwriters to “consider more data points that they would have previously considered”. Role of the regulator According to Swiss Re CUO Specialty Anne Lohbeck, using AI to extract elements and summaries entails the ever-evolving legal, ESG and sanctions scope would need to be “reflected in a near real time manner in the underwriting process”. In this case, Global Asia Insurance Partnership CEO John Maroney said, as the regulator would be “better informed in terms of what the risks [and] benefits would be”, they would be important in what reinsurers were allowed to do. Responsible/ethical AI Responsible or ethical AI can be “manifested”, Ms Kyriakopoulou said, as long as there is emphasis on the right framework and approach. She said, “But how do you start the first steps of validating the performance, fine tuning and capturing all the artifacts we collect as we perform this process?” When the model is deployed, she said, performance would need to be monitored for decay, so that necessary actions could be taken. “Ultimately … emphasis [should be on] explaining to people how the models work. Explainability is now very much a tagline. We are using it [and] making the consciousness of the bias real. And I think the regulators are definitely driving this agenda,” Ms Kyriakopoulou said. Cyber security An area of risk for insurers is cyber security. “Any risk linked to data privacy and the use of sensitive data, we believe these are on top of regulators’ agendas,” S&P Global Ratings director, lead analyst WenWen Chen said. However, SQREEM Technologies CEO and co-founder Ian Chapman-Banks also noted that regulations can never keep up with technology. Mr Chapman-Banks said, “AI is probably going to make attempts at fraud more frequent and more complex and creative. But at the same time, (re)insurers and reinsurers will be using AI to improve fraud detection … there is certainly no doubt that criminals will be trying to keep ahead of both the regulators, the enforcers and the industry terms of using AI.” Cyber risk should be higher priority “Malfunctions, copyright violations, faulty advice and data bias introduced by AI are just a few of the dangers we and our clients will have to contend with as we put these new technologies to use. We will also hear about data … which all of us here work with on a daily basis and is crucial to the success of using any AI driven tools,” Ms Lohbeck said. With AI and digitalisation, as well as use of, and access to, data on the rise, “cyber risks should be higher on our radar”, said Ms Lohbeck. Believing that insurance data is magic by Paul McNamara L-R: Ms Tai Hui Yen, Ms Anusha Thavarajah, Messrs Derek Shi, Masaru Kikukawa and Robert Newbold Day three of this year’s SIRC ended with an Asian-centric panel discussion called ‘The devil is in the data: An essential element to revolutionise our industry’. Moderated by Gallagher Re regional director, head of SEA Korea and Taiwan Hui Yen Tai, the panel included expert insights from Allianz Asia Pacific regional chief executive officer Anusha Thavarajah, Ping An P&C Insurance company of China ED, corporate and commercial division Derek Shi, Tokio Marine Holdings GM, head of global reinsurance Masaru Kikukawa and Verisk president, extreme event solutions Robert Newbold. Ms Tai set the scene by posing the question, “What do we need for technology to work properly? That’s when we get to data.” She went on to stress the importance of capturing, managing and processing the data and asked, “Are we doing enough to get back to the basics of data management?” Mr Kikukawa said, “Data is fundamental for any decision making, but data quality in the US is better than it is here in Asia.” Part of the reason for the difference is that the US often has standardised forms for P&C data collection, whereas in Asia it is far more ad hoc. While the quality of data capture in Asia is improving, it does take time and effort to see significant improvements. Mr Shi said, “From the Chinese direct insurer perspective, we can’t talk about data without talking about AI. But a lot of the data is unstructured – and we are learning to use AI to structure the data and how we can derive important insights from it.” Mr Newbold acknowledged that, “modelling has evolved a lot over the last 10 years. This allows us to collect much more granular data,” he said. He also indicated that the quality of data in Asia varied widely by country – with Japan and Australia near the top and China near the bottom. Ms Thavarajah counselled remaining grounded. “The challenge is that we have all jumped into believing that data is the magic. But don’t forget ‘rubbish in, rubbish out’. Every day, every step of the way, we collect data constantly. We need to ensure that it is treated like gold,” she said. Data and reinsurance pricing Mr Shi said, “How we use data in insurance is a bit of a shifting paradigm. The availability and the cost of using internet-of-things data has become much more common practice, and this is changing the way we see insurance as a product. This allows us to reassess risk on a dynamic basis. We are only starting to look to see how this is feeds through into reinsurance pricing.” Mr Kikukawa said, “There are so many ways we can use the data from a property risk perspective -but providing better quality data to the reinsurer means that there is a direct benefit from a pricing and a terms-andconditions point of view.” He went on to highlight the ways in which the data can also be used for portfolio optimisation. “There is a big cost, but there is a huge reward,” he said. The question was raised over whether the source of much of this data was being effectively incentivised to make sure that it was of the best possible quality. Mr Newbold said, “There is a staggering amount of time still spent today trying to convert data into a useable format. We do think that there is a premium that can be calculated on better data. Better data leads to a better technical price.” Ms Thavarajah said, “The reality, from a direct insurer perspective, is that the most important factor is the customer. We must use data – but it doesn’t have to be complete. We can interpolate the data we have to predict what is going to happen – to predict what the customer is going to do. Our team is trained to deal with that appropriately,” she said. Collective insurance solutions for a collective problem The (re)insurance industry has been working on finding solutions to the climate crisis for the past decade, with varying degrees of success. MSC I’s Mr Sylvain Vanston spoke to Asia Insurance Review about the many risks associated with climate change and biodiversity, as well as possible solutions. by Ahmad Zaki ESG has been a heavy topic of discussion around the world, with many governments attempting to solve the climate crisis. However, MSCI executive director of climate and biodiversity investment research Sylvain Vanston believes that there has been no gamechanging piece of regulation yet introduced in the insurance industry. “Instead, we’ve seen some impactful initiatives from individual insurers and coalitions of insurers that had a significant impact on how climate change is being tackled,” he said. The first of these coalitions was the Net Zero Insurance Alliance (NZIA), which, according to Mr Vanston, disbanded under significant political pressure due to allegations of antitrust concerns. Recently, the alliance was superseded by the Forum for Insurance Transition to Net Zero (FIT), which is helmed by the United Nations Environment Programme Finance Initiative (UNEP FI) and includes noninsurers within its ranks, such as brokers and policymakers. “The idea is that within the format of a forum, it will be less prone to attacks from policymakers on antitrust guidelines and rules. And importantly it doesn’t come with a need to set a target,” he said, calling the FIT the ‘spiritual successor’ to the NZIA. While it is too early to say how successful this new forum will be, Mr Vanston hopes this is where conversations, engagements and solutions for the climate transition will come from. An uninsurable world Last year, US insurer State Farm declared several parts of California ‘uninsurable’ from the seasonal wildfires and stopped selling new policies to homeowners in affected regions. In March this year, the insurer discontinued coverage to 72,000 homes. “This came as a shock, because in such cases, government-regulated mechanisms might have to step in, and there are very different solidarity regimes across different markets,” said Mr Vanston. “But what we know is that society cannot survive without insurance. At some point when the population is left to own their devices to shield against risks and when those risks become more acute and frequent, the population, home owners, some businesses cannot cope.” In order to combat the higher risks and costs of Nat CAT, insurers must necessarily raise premiums, but there might come a point where the risk is just too expensive to insure against, as happened in parts of California. “The future of insurance is probably going to involve a lot more public-private conversations about how far does the market cover risks and how far should state-funded regimes cover some of the excess risks,” he said. There is only so much an individual insurer or asset manager will be able to accomplish when it comes to sustainability, he said. “You can have your own ambitions, but at some point, because the problems that we’re tackling when it comes to the climate and the biodiversity crises are so large, so much broader than any individual insurer or investor, and in fact, so much bigger than any individual industry, they require collective solutions.” However, he thinks that insurers might be wary of coming together once again under a high-commitment umbrella, due to the distressing experience of the NZIA. More open organisations and frameworks, such as the FIT and TNFD, would be good ways to move forward as an industry. “Eventually, collective solutions will hit commercials. Insurers are, after all, commercially minded organisations, with a need to remain competitive,” he said. “At some point, if you restrain yourself significantly in some markets or lines of business, if you raise your premiums too high, if you price yourself out of the market, then you’re going to lose. Collective problems require collective solutions, together with policymakers.” Mr Jeffrey Liew Senior director, insurance APAC, Fitch Ratings Reinsurance sector expected to remain stable over coming year Balance sheets and financial performance have been forecast to remain very strong in 2025. Even though the pricing cycle may have peaked, market conditions remain favourable. According to Fitch Ratings senior director, insurance – APAC Jeffrey Liew, Fitch Ratings’ base expectations for the coming year is that reinsurers will have “a more competitive but still disciplined market”. “There is a greater interest [in] CAT risk, offset by limited casualty appetite. In property CAT, there is a general expectation for continued moderate softening in rates if losses within expectations. “However, [rates] should remain adequate, and the strict terms and conditions secured in 2023 should hold. This means insurers will continue to retain more risk on their books,” said Mr Liew. He also believes that most market participants agree that favourable market conditions will not end abruptly. He said, “(The) market is cautious and [there is belief] it could harden again if (a) highmagnitude, unexpected industry event occurs in the coming [year].” ‘Neutral’ outlook Mr Liew said that Fitch currently has a ‘Neutral’ outlook on the reinsurance sector, meaning that “we expect trends in the sector’s main credit drivers to remain broadly stable over (the) next [year]”. “Balance sheets and financial performance should remain very strong in 2025, through profitability should be [slightly] down from the record of 2023 and 1H2024. “While the pricing cycle has likely peaked, market conditions remain favourable and supportive of strong returns. Downside risks are elevated, but the sector is in a stronger position than a year ago to face major shocks,” he said. Mr Liew also forecast a calendar year combined ratio for the industry “of 88% in 2024 (and) 90% in 2025, up from 87% in 2023”. He said, “Combined with stable investment income, this would translate into a strong sector of ROE of 19% in 2025, [close] to 21% in 2024, [as compared to] 22% in 2023.” Mr Reza Andre Nasution Director, Maipark Reinsurance Human touch remains critical despite AI advancements “Globally, reinsurers are in a solid position. Financial performance indicators show improved capital, reaching $700bn - a 5% increase compared to fiscal year 2023. Reinsurers have also achieved a stronger combined ratio at 85% and return on equity in the 13-15% range. Despite some losses, such as the Baltimore Bridge collapse and CrowdStrike events, these remain within the expected budget,” said Maipark Reinsurance director Reza Andre Nasution. “For us, this robust standing of the reinsurance industry presents an opportunity. Meaningful discussions with reinsurers at this time can help ensure sustainable growth. We believe that as strategic partners, our global reinsurers share our commitment to this vision of sustainable growth,” he said. “In Indonesia, we face unique challenges. Local insurers have navigated a hardening market, marked by rising prices and tighter terms and conditions. However, translating these conditions into our primary markets has proven difficult, resulting in a significant gap between the primary and reinsurance markets in Indonesia,” Mr Reza said. “Furthermore, primary markets here are highly competitive, making it challenging for reinsurers to align with the fierce competition at the primary level,” he added. Mr Reza said there have been significant advancements within the data and technology innovation. However, he said, there remains a critical missing piece in the reinsurance space - the human touch. “Reinsurance isn’t solely about data. While improving data quality is essential for better analysis and outcomes, we also need to preserve the human elements - negotiations, discussions and the exchange of perspectives. Data and AI enhance productivity, enabling instant modelling and underwriting decisions with higher-quality data. Yet, human relationships and interactions remain indispensable in reinsurance,” he said. SIRC “I have been attending SIRC for many years and it’s only getting bigger each year. The crowd is a very good indicator of how strong the SIRC platform is to connect, engage and exchange views with our partners about our future business plans,” Mr Reza said. Mr Darryl Pidcock Head of Asia Pacific and cyber, PERILS Non-peak perils gain traction “We’re seeing a notable focus on ‘nonpeak’ perils,” said PERILS head of Asia Pacific and cyber Darryl Pidcock, referring to hazards beyond primary perils such as earthquakes or typhoons. “Flooding remains a critical issue, but this year, we have also witnessed unusual hailstorms in Japan, which shows the need to understand these emerging risks,” he said. Mr Pidcock talked of the pressures posed by population and industrial growth in South and Southeast Asia. “It’s essential to look beyond current perils and consider the exposures tied to rapid urban expansion and development,” he said. He spoke of the urgent need for more accurate data and advanced modelling to meet these demands. “The quality of data is just as important as quantity,” he said, stressing that it depends on insurers to provide exposure and post-event claims data, making it accessible to the wider industry. He said, “Everything we do really based on (that) feedback. We’re always looking at what’s important for the industry, but where does that come from? It comes back from interacting, talking to the industry. The primary insurers that we with closely, continually give us feedback and often direct us. Cyber risk protection across Asia is a critical area of focus, which Mr Pidcock said was “well documented”. “Cyber insurance penetration remains low, but with increasing incidents, the need for protection is growing,” he said, citing both malicious attacks and accidental disruptions, like the recent CrowdStrike incident. “As attacks rise, it’s vital for insurers to meet this demand, particularly among SMEs that form a large part of Asian economies.” As renewals approach, reinsurers seem focused on stability, said Mr Pidcock. “There’s less tension than two years ago, but cedants are still pressing for better terms,” he said. Mr Les Loh CEO Southeast Asia and Korea region, Guy Carpenter The reinsurance industry is transitioning At the moment, the reinsurance industry is currently in a “transitioning stage”, according to Guy Carpenter CEO Southeast Asia and Korea region Les Loh. Mr Loh said that the reinsurance market is “tilting towards the reinsurer in terms of the advantage that we are seeing” after the hardening conditions over the past two years. He said, “Reinsurers are in a better position today in terms of stronger pricing, balance sheet and results... plus the structure of programmes are putting them in a better position to manage their exposure overall. “And I think there should be a transition period when demand and supply should meet each other and find the right intersection.” As a result, he noted that there are expectations for better conversations this year in the overall market. “There is an air of optimism, and we see insurance [companies] having more confidence,” he said. “We do experience more intense wind conditions and the weather getting hotter. The industry needs to work together to address this issue, to give the right sort of protection,” he said. Other challenges he listed included geopolitical uncertainties, macroeconomic growth challenges and compliance issues that especially smaller companies may need to invest resources into. Mr Koji Takahashi CRO, Sompo Japan Insurance Reinsurance industry in a good place for more business The reinsurance industry has been “enjoying some good underwriting and investment results in recent years, so I feel they have more appetite to write more businesses”, particularly from a Japanese point of view, Sompo Japan Insurance CRO Koji Takahashi said, as risk in the region would offer reinsurers diversification from risks in the US. At the same time, Mr Takahashi noted concerns about US casualties, aggregate covers or short return periods. “It is not that straightforward, (and) it is a bit complicated. But overall, I feel the reinsurance industry is in a good environment for more businesses. “How we do business and how we process the operation should be more efficient through the most edge cutting edge technologies. That is where we have room for improvement and serve customers better,” he said. Mr Takahashi also noted that climate change may lead to more severe or frequent Nat CAT, which reinsurers are trying to move away from. Insurers are now retaining more risk, and there is a coverage gap for insurers and clients, he believes. This would mean finding ways to allocate risks or results among the industry, society and corporates, and work together with the government to mitigate losses when the severity or frequency of the loss was too much for the private sector to bear, he believes. The real value of reinsurance meetings As the (re)insurance conference season for 2024 starts, Asia Insurance Review spoke to Asian Re ’s Mr Anil Sant and First Policy Insurance Brokers ’ Mr Hari Radhakrishnan about what the conferences offer and how participants can make the best of the available opportunity. by Anoop Khanna There are some who think that physical conferences have become passé. There is also an argument that conference attendance by so many people leads to an increased carbon footprint of companies and should be cut down from an environmental standpoint. Notwithstanding such criticism, conferences still continue to witness ever greater participation and interest. More conferences are coming up in various markets apart from the premier events such as Monte Carlo, Baden-Baden or the Singapore Insurance and Reinsurance Conference. There are also limits to the amount of business travel one can do. Further, the travel options between countries are at times restricted, so frequent meetings are not feasible or practical. This has the effect of having to rely on incomplete data or scanty information for efficient decision making. The insurance and reinsurance business thrives on data and information and therefore conference participation became a valuable tool, to gather market information first hand, rather than rely on reports or mailers. Reputed organisations very often make attendance at reinsurance conferences a business requirement for their executives. Set the tone and tenor Speaking to Asia Insurance Review , First Policy Insurance Brokers regional director Hari Radhakrishnan said, “International reinsurance conferences have long been an essential element in the transaction of insurance and reinsurance business worldwide. He said, “The conferences originated in a mostly analogue world in the last century, where communication was not as efficient as it is today. There was no Zoom or Skype to do virtual meetings. The mode of communication was largely through letters or faxes and ‘phone calls.” Asian Re CEO Anil Sant said, “The global reinsurance conferences serve as a catalyst for dialogue, innovation and collaboration, highlighting the resilience and adaptability of the reinsurance industry in the face of uncertainty. “As the reinsurance industry continues to evolve in response to shifting market dynamics and emerging risks, the insights and innovations shared at the global reinsurance conference undoubtedly shape the future of the sector.” A thriving segment There are many important aspects of a conference that can be overlooked. One is the timing. The conferences are not held in the peak of reinsurance renewal seasons. Mr Radhakrishnan said, “The reinsurance conferences usually precede the renewal events, providing an important backdrop for setting the broader context and giving cues to the market. “Will there be market hardening or softening? Will there be changes in capacity allocations? What kind of rate movements can be expected? One gets cues on these kinds of questions from conferences and gets to prepare for them. This is something that cannot be achieved in a digital setting.” Mr Sant said, “The global conferences have played important role in development of reinsurance industry and will continue to do. They are the forums to discuss and address the challenges faced by the industry. Climate change, increasing frequency and severity of Nat CAT events, cyber risk, affordable reinsurance capacity, protection gap, long term sustainability, ageing populations, talent crunch and ESG considerations are aspects that merit much thought and discussion. Apart from the appropriate timing, the reinsurance conferences also offer a neutral space for free-wheeling discussions unlike meeting in an office in a formal setting. These may not just be confined to working sessions, but also may extend to evening or late evening fellowship meetings and dinners. Important market developments and the thoughts of important thought leaders can be gathered in such settings, which can be a valuable input for future underwriting decisions. “The reinsurance conferences provide an opportunity to discuss current issues. Capacity availability and price for the same is always current topic in view of the everchanging dynamics, networking opportunities and business deals,” said Mr Sant. Which of the following do you employ in order to increase talent retention in your organisation? Source: AIR website visitors Musical chairs at Singapore Reinsurers’ Association At the end of yesterday’s conference, former Singapoe Reinsurers’ Association (SRA) chair Marc Haushofer said a few words to close the conference and formally hand over the chair to Allianz Re ’s Mr Kenrick Law . by Ahmad Zaki SRA bids farewell to Mr Marc Haushofer Mr Marc Haushofer “Serving as the chair of the Singapore Reinsurers’ Association for the better part of the last decade has been one of my most rewarding chapters of my career. It involved a lot of time, but it was really rewarding,” Mr Haushofer said. He has led SRA for close to two decades and was instrumental in creating the current version of SIRC as it exists today. He was, at the same time, quick to commend the entire SRA team on their hard work, stating that none of it would have been possible without their input. “I have learned so much during those years, and I feel it’s a privilege that I was able to contribute to the incredible growth of the conference and also the growth of the industry. Together we went head on against challenges and celebrated milestones, each step taking us closer to our final goal,” he said. “The connections formed here at the conference are the fruits of hard work by everyone from the organising committee, our dedicated speakers and of course, all of you who have attended.” Mr Kenrick Law Mr Law then took the stage, thanking Mr Haushofer for his guidance, his passion and his drive. “I have learned a lot from this man over the past eight years,” he said. “Under your leadership, I have witnessed the transformation of the SRA in the last few years and the progress has been nothing short of remarkable. It’s been very inspiring for us, and I look forward to building on our shared vision and to continue to strengthen the reinsurance industry in Singapore and beyond.” The dates of the 21st SIRC have also been announced – 3-6 November 2025. Mr Law added that he has already been thinking about the theme for next year: “It’s about adaptation into the future, how you actually can adjust yourself and emerge even a stronger person.” Speaking to Asia Insurance Review, he also said: “Allianz Re is proud to join the global reinsurance community at the 20th SIRC in Singapore, as we work together to address the industry’s challenges directly. Under the theme ‘Revolutionize (Re)insurance!’, we’re excited to explore transformative ideas in climate resilience, digital innovation, and talent acquisition. By contributing our expertise, Allianz Re remains committed to driving sustainable growth and resilience for our clients and the industry at large.” Source: asiainsurancereview.com

Difficult conversations to build sustainability by Ahmad Zaki L-R: Mr Clemens Philippi, Mr Matthew Carletti, Ms Dawn Miller and Dr Achim Kassow With booming populations in metro areas and the tendency to build in high-risk areas such as along shorelines and on floodplains, insurers must engage politically in order to improve resilience and reduce volatility, said Munich Re member of the board Achim Kassow, during his opening speech yesterday. Following on that point later during the panel, which focused on creating a sustainable future, Lloyd’s America CEO Dawn Miller said that there is a very large role for the industry to play in working with state, country, regional and district regulators to have a fact-based discussion about why insurance is available, the cost of capital, drivers behind pricing and legacy issues. “Building for resilience is possible,” she said. “We all live in environments where, over the last 30 to 40 years, whether it’s in developing or developed countries, there are building codes and regulations (to support sustainability) and so we know it can happen. The more that our industry can work alongside regulatory bodies to help them understand the efficacy of doing this, the more insurance will be available.” She added that regulation will always lag behind innovation, but if the industry can bridge the gap and show that there are ways to deal with Nat CAT through risk management or resilient construction, people will get the capacity they need. “At the same time, it doesn’t take away if someone chooses to rebuild their home in the same zone they were in. That’s their choice. All we can do is try to bring some resilience to the fullest extent possible.” Giving up profit for good Dr Kassow also noted that the industry needs to be prepared as an insurance and reinsurance sector to give up the business it considers profitable. “Part of the debate will always be political,” he said. “If the private sector should have the opportunity to make money on something, or alternatively serve a public good, then that is the choice that should be administered.” While government pools exist and provide the capacity that people require, being silent for fear of government intervention is the wrong attitude, he said. “Even if we might lose business for a certain period of time, it’s also pretty clear that these pools will see losses and the taxpayer will then be called to pay for it, and that will provoke the next discussion. Then you get to a sustainable solution.” He also said that the industry shies away from having difficult conversations about habitable and insurable areas. “But I think, as an industry, we must have clear standards based on facts and say, ‘no, this isn’t going to work anymore’. Even if we could rebuild better, this place is unsustainable. And because we have the relevant information, we can provide that clarity.” Sustainable cyber An often-overlooked part of building a sustainable future is managing cyber risk. The recent CrowdStrike event showed how vulnerable the world is to a non-malicious event, raising questions about what a black swan event would look like in the modern day. For investors, the question of cyber is way down the list, said Citizens JMP managing director Matthew Carletti. “Their job is to play devil’s advocate, and they want to manage their downside,” he said. Compared to the many decades of advancement and data that CAT models have had, cyber models are relatively new and all of the knowledge gained has been over the past few years. “That’s the scepticism that the investment community has when it comes to cyber, and the industry needs to get past and show that while it actually might not have all the answers, it does know how it’s going to manage that risk,” he said. He added that investors are most excited about the addition of cyber specialists in the industry, and the loss mitigation tools that are being introduced as part of cyber product offerings. Social connectedness and reinsurance as the glamorous side of insurance by Paul McNamara L-R: Mr James Beedle, Ms Sze Keed Wong, Mr Thomas Hofer, Ms Valerie Badcock and Ms Moira Roberts The fight for talent: Transforming perceptions towards (re)insurance’ was the subject of an insightful panel at yesterday’s SIRC. The panel was moderated by Partner Reinsurance Asia CEO, Asia Pacific P&C and CEO James Beedle and included AIA Singapore chief executive officer Wong Sze Keed, Guy Carpenter senior VP, global operations Valerie Badcock, Munich Re regional head of HR (Asia Pacific, Middle East and Africa) Moira Roberts and Selion Global founder and global managing partner Thomas Hofer. Being boring Mr Beedle kicked off the panel with a preamble about the increasing importance of recruiting and retaining staff as more senior talent is leaving the sector through retirement at a time that it is struggling to recruit younger staff – in part because it is seen as ‘being boring’. “You’re not alone,” said Mr Hofer. “It’s not just an insurance challenge – many people left during the pandemic and never came back.” Ms Roberts echoed this sentiment and said, “The industry is not good at selling itself, branding itself. There is a degree of humbleness in the industry.” “The insurance industry is seen as boring and conservative,” said Ms Wong. “People associate life insurance with agents that only hassle you to buy insurance. We don’t do enough to create awareness.” She went onto point out that AIA is working with Singapore’s Institute of Banking and Finance and the Monetary Authority of Singapore to introduce a minor insurance degree at university this year. The glamour of reinsurance Ms Badcock said, “Reinsurance is the glamorous side of insurance. “Rebranding is something we should all be considering. We need to promote ourselves better. We need to open the doors,” she said. In terms of attracting new talent, she said, “We need to be looking at a multifaceted method of getting staff – starting at graduate level – but also introducing an apprentice scheme for 18-19-year-olds. We should always be looking at attracting the best talent from universities – and not just from finance and economics courses. “We also need to be focusing on female talent,” she said. Ms Roberts indicated that Munich Re had, “started in employee branding” focusing on real staff in real countries showing the diversity of talent it employs. “It’s about personalisation – about selling the benefits of working in insurance. Hybrid working is a huge factor in attracting talent,” she said and reinforced that this needs to be part of a long-term plan. It is not a quick fix for a short-term problem – and it can be expensive to implement properly. “It’s not cheap, which is why you need to think it through,” she said. Ms Wong concurred that it requires a longterm solution. “We need to start in schools with internship programmes – and scholarships to create awareness of the life sector being much more interesting. You don’t get immediate returns, and you need to make sure that it’s sustainable,” said Ms Wong. “Young people don’t even know what we do. There’s a lot of work to be done.” Retaining talent Ms Wong was unequivocal about the most important tool available to help retain talent. “The big draw is flexible work arrangements,” she said. “It’s not just about work-from-home. They want café-style spaces in the office where they can brainstorm with each other.” Ms Roberts said, “73% of our talent is Gen Y or Gen Z and they want to work differently – more flexibly.” Also important is mobility within the company. “Mobility is important so that people can increase their skillsets. Managers don’t like it – but people need to be able to move. ‘Stickiness’ is all about having fun at work. Our staff run sessions by themselves. Staff aged between 25-45 want to be able to socialise at work – perhaps meet a life partner at work.” Social connectedness is of primary importance. “It’s important for younger staff to be in the office to learn from older staff, how to do deals and so on,” she said. APAC reinsurance market shows divergence On the ground at SIRC, we spoke to Aon’s Mr John Morley about growth opportunities and trends in the reinsurance market in Asia Pacific. by Reva Ganesan The market remains incredibly strong in certain areas, even as we see a general softening globally and shifts within the market itself,” said Aon APAC CEO Strategy and Technology Group John Morley, addressing the state of the reinsurance environment in the APAC region. “While some sectors show signs of softening, others continue to experience a hard market, particularly in the Pacific and parts of APAC,” Mr Morley said. “The APAC region, given its diversity, is often viewed in sub regions like North Asia, Southeast Asia, South Asia and the Pacific. Each of these areas exhibits distinct characteristics; some regions are still experiencing hardening, while others like Singapore, are beginning to see softening, especially within ceded impact business,” he added. Opportunities “We’re experiencing a surge of inquiries about growth in the region, particularly focused on specific markets. India is currently a hotspot, with many eager to enter this market. We assist companies not only in understanding how to enter but also in determining which lines of business to pursue,” he said. “Data plays a crucial role in this process, enabling us to provide clarity and confidence through a detailed, data-driven analysis of how and where to enter these markets. Besides India, other areas are also gaining attention, such as Australia, particularly in the renewable energy sector,” he said. “However, predicting catastrophe risk is becoming increasingly complex, leading to hardening in certain areas. For instance, reinsurance for offshore wind projects is proving to be exceptionally challenging,” he added. Growing profitability around APAC When asked about plans to grow profitability around the region, Mr Morley said it is crucial to select the right lines carefully and understand future market conditions. “India serves as a prime example: While it’s currently a ‘gold rush’ with many looking to enter, it’s essential to consider what the market will look like in two years. The current profitability might not hold up, given the high influx of competitors across various lines. “Aon’s goal is to provide insights that empower companies and CEOs to make better, data-driven decisions for sustainable, profitable growth. Some businesses seek immediate profitability, while others focus on long-term growth. For the latter, entering the market now - even with thinner margins - may be strategic, allowing them to establish a presence and gradually increase premiums and margins over time,” Mr Morley said. Trends around the life market “The life insurance market is increasingly appealing to insurers, especially larger inbound players who are eager to enter this space. Many are adopting a strategy of acquiring composite businesses, retaining the life component and placing the general insurance (GI) segment into runoff,” Mr Morley said. This approach aligns with current economic conditions – interest rates have peaked and are beginning to decline, which enhances the attractiveness of life books - now seen as valuable assets rather than drags on portfolios. “Large parts of Asia, particularly in life and health insurance, remain underserved in both protection and investment. This creates substantial growth opportunities, although many companies are limited by outdated infrastructure in policy administration, claims management and actuarial systems. Upgrading these systems could enable faster, more efficient and cost-effective service to new markets,” he said. Forecast In the next 12 months, the market can expect ongoing shifts driven by regulatory changes, leading to further consolidation. A general softening trend is likely, although this will heavily depend on Nat CAT activity in the region. Significant storms or earthquakes – such as a major seismic event in Japan – could cause market hardening, particularly in property insurance. Korean reinsurers face new challenges under IFRS17 and K-ICS Under the new IFRS17 and K-ICS frameworks, insurers in Korea are adopting more advanced capital management strategies and exploring diverse capital solutions to optimise their balance sheets. Product innovation, identified as a top challenge by over 90% of insurers, is expected to drive growth, with increased collaboration between insurers and reinsurers. RGA Korea ’s Mr Micheal Shin  tells us more. by Reva Ganesan In 2024, the Korean insurance industry regained its growth momentum following a challenging 2023. Total premium income for the first half of 2024 reached over KRW114tn ($86bn), marking a year-over-year increase of approximately 4% from the same period in 2023. RGA Korea CEO Michael Shin, who is also senior vice president for Japan and chief marketing officer for Asia, said that the growth was primarily driven by robust sales of limited pay whole life insurance, which attracted customers with higher returns at maturity in the life insurance sector. In the non-life insurance sector, health and accident insurance led market growth, with accident and health sales outpacing life insurance sales, Mr Shin said. “On the downside, market competition has intensified as all insurance companies are focused on expanding protection products to secure contractual service margins (CSM) under the IFRS17 and K-ICS regimes. Insurers have expressed profitability concerns over new products as margins thin under competitive pressures,” he said. Biggest demands and market trends According to the Korean Statistical Information Service, by 2025, South Korea is projected to become a ‘super-aged society’ - with over 20% of its population being 65 or older. As the ageing population grows rapidly, the demand for life and health insurance among seniors has significantly increased, Mr Shin said. In 2024, RGA conducted consumer market research of the senior segments across eight markets in Asia, including South Korea. He said that the research showed that a large proportion of seniors have pre-existing medical conditions, such as hypertension, high cholesterol and diabetes, which often leads to them not passing standard underwriting, resulting in either part of the coverage being declined and/or subject to high premium loadings. “In super-aged countries like Japan, Korea and Taiwan, the majority expressed that they are not confident in the level of public healthcare in a critical illness (CI) event, hence they see private health insurance, annuity and CI insurance as valuable protection options. “Nonetheless, they are often frustrated by the higher premiums and challenges in the underwriting process when purchasing insurance or feel that the products do not meet their needs or are too difficult to understand,” he said. Shift in product design Mr Shin said due to economic challenges in South Korea, many consumers are facing financial strain and struggling to allocate money to insurance. This situation underscores the importance of value for money when choosing insurance products. “To offer affordable prices with wider coverage, there has been a shift in product design from diagnosis-based lump-sum payments to treatment-based continuous payments. This approach has helped provide affordable premiums while covering advanced medical technologies. “Recently, a new cancer treatment product that offers comprehensive coverage for all types of cancer treatment at an affordable premium has been launched and has quickly become one of the best-selling items in the market, with RGA’s support,” he said. Regulatory challenges and adjustments When asked about challenges facing Korean reinsurers in 2024, Mr Shin said IFRS17 and K-ICS “have introduced more discipline and significant changes to business strategies”. “Insurers are now focusing on top-line sales of high CSM products, leading to fierce competition in the protection market. This shift has resulted in an increasing demand for new protection products,” he said. “As regulatory adjustments put pressure on the K-ICS ratio and economic changes add more volatility under IFRS17, insurance companies are seeking diverse capital solutions. These include reinsurance solutions, issuing subordinated bonds and hybrid securities, among others,” he said. Dr Anne Lohbeck Chief underwriting officer specialty P&C insurance, Swiss Re Specialty reinsurance: A need for talent The reinsurance and insurance markets today are characterised by a lot of instability and a lot of change,” said Swiss Re chief underwriting officer specialty P&C insurance Anne Lohbeck. Catastrophic losses have been driven by events in the US, Central Europe and Asia, as well as record-breaking floods in the Middle East. She said that these events are reshaping the industry and pressuring insurers to adapt to a higher frequency of major natural disasters globally. “These political dynamics mean more complexity in modelling and assessing risk,” she said. Dr Lohbeck identified Asia as a prime example, where the Nat CAT protection gap remains substantial. Specialty lines are also stretched by a growing gap in areas like cyber risk, which she said was another growing sector for protection. “Specialty lines give insurers tools to adapt to and mitigate these complexities,” she said. Attracting top talent to specialty reinsurance is critical for managing complex emerging risks that Dr Lohbeck said was a subject close to her heart. “If I look at some of the knowhow demands that come with the green energy transition, where we need to know more about things such as solar, such as wind offshore and onshore, where we need to know more about energy storage, about grid construction, about lots of these more emerging technologies, we need to be able to attract that next generation. And there I think the entire industry needs to step up their game and explain better just how rewarding and how interesting and how multifaceted a career in this space can be,” she said. Specialty insurance relies on experts with deep, niche knowledge – engineers, data analysts and renewable energy specialists - to assess diverse exposures in areas like cyber risk, Nat CAT and energy transitions. “Without that technical talent, we cannot effectively assess and price emerging risks,” she said. The industry needs to draw in talent with new skills to respond to evolving markets, adding that career rewards and opportunities in this ‘hairy’ space of complex risks must be clearly communicated to attract future experts. Of SIRC 2024, she said, “It’s an important check-in point and milestone enroute to 1/1 renewals.” Mr Ben Qin Underwriting head of North Asia and Australia, Descartes SEA reinsurance market sees capacity boost and parametric solutions rise We are seeing increased capacity returning to the reinsurance market, particularly across the SEA region. Additionally, there’s growing traction for alternative risk transfer solutions, specifically parametric reinsurance,” said Descartes Underwriting head of SEA Robert Drysdale. “This trend is evident from the number of brokers establishing competency centres focused on parametric insurance and reinsurance. We’re also seeing broader adoption across various sectors and geographies in Asia Pacific, where parametric reinsurance is becoming more mainstream,” Mr Drysdale said. On a separate note, Descartes Underwriting head of North Asia and Australia Ben Qin said, “One of the biggest challenges we face is climate driven and it is increasingly exceeding the models that traditional insurers and reinsurers rely on. This is leading to an impending adjustment in pricing, especially for catastrophe perils.” “In the ANZ market, we’re expecting greater adoption of alternative risk transfer solutions at the lower end of treaty programmes, as retentions are being pushed up and cedents are required to retain more risk. This impacts their bottom line and increases earnings volatility following such events,” Mr Qin said. “We’re seeing similar trends in the China market, where typhoon activity has been above average for the past two years. As these unexpected events emerge, we’re here to provide support and capacity for risks that cannot be fully covered in the traditional market, particularly through parametric solutions,” he said. “The reinsurance industry needs to stay relevant, not only for those within the industry but also for consumers and the broader community. Building resilience is key to bouncing back after major events and addressing immediate challenges like climate change, inflationary pressures and economic strain. We all need to take a close look at potential innovations in the market and be open to embracing change,” Mr Qin said. Mr Robert Drysdale Underwriting head of SEA, Descartes “This is my seventh year attending SIRC, with one year held virtually. It’s much better to have it in person and to see the event growing stronger each year. Last year was busy and I hear this year will have around 3,300 delegates. It’s a fantastic opportunity to catch up with everyone in one place over the course of a week.” Mr Brad Weir Head of analytics – APAC, AON APAC insured losses remain below average despite intensifying typhoon activity Aon recently released its ‘Global Catastrophe Event Recap’ report for the first three quarters of this year, revealing that global insured losses have risen above the long-term trend, reaching around $100bn. This increase is primarily driven by significant activity in the US, including three hurricanes, severe convective storms and flooding in Central Europe,” said AON head of analytics for APAC Brad Weir. “In the APAC region, however, insured losses are trending below the long-term average, despite notable typhoon activity fuelled by warmer-than-normal sea surface temperatures. Several typhoons made landfall across the region, with typhoon Yagi, for example, reaching Category 4 intensity and making landfall in Hainan, China and northern Vietnam. This storm caused extensive flooding and highlighted a challenge in managing catastrophe risk in APAC,” he said. Challenges Addressing climate change within our current understanding of risk requires a nuanced approach, said Mr Weir. “When developing models, it’s essential to incorporate recent historical data to reflect the impact of climate change that has already occurred. However, from an insurance and reinsurance perspective, most decisions are made with a 12-month outlook.” “This makes it important to consider carefully how much weight to give additional climate change factors, especially as climate variability introduces significant short-term fluctuations that need to be accounted for,” he said. “Beyond these short-term considerations, we face additional challenges in understanding long-term trends in climate-related losses. Often, we might hastily attribute these trends solely to climate change, overlooking a critical factor: The increase in exposure, particularly in rapidly-urbanising areas of Asia. This growing exposure is a driver of loss trends and is within our control to address,” he said. Mr Patrick Cheah President and CEO, Malaysian Life Reinsurance Group Southeast Asia: Life reinsurance faces stiff competition Malaysian Life Reinsurance group president and CEO Patrick Cheah spoke of a highly competitive pricing environment, noting that, unlike the hardening non-life sector, life and health reinsurance remains under intense pressure. “Every reinsurance company is chasing after the same piece of pie,” he said, pointing to the need for product innovation and differentiated offerings. Mr Cheah said that regulatory reforms have been a game changer, especially in Malaysia. “Malaysia is going through a new risk-based capital regime change,” he said, emphasising that this shift has been creating uncertainties around solvency requirements and capital levels. These revisions, while challenging, could also open up new business opportunities for reinsurance firms that can adapt effectively. Despite these hurdles , Mr Cheah said innovation was vital in maintaining competitiveness, especially in life and health insurance. He said that many products designed for specific demographics, such as prenatal and postnatal protection for women had been introduced as well as an expansion in critical illness plans. “In Malaysia, [coverage] has gone from 36 illnesses to over 100,” he said, reiterating the potential for creative approaches in a traditionally conservative market. Mr Cheah remained cautiously optimistic on the outlook for 2025. With Malaysian regulators supporting digital insurance initiatives, he expects greater insurance penetration among lower-income segments, which are currently underinsured. “There’s going to be a launch of digital insurance from next year … better coverage for the mass market,” he said, viewing it as a promising shift for the industry. As Mr Cheah wraps up his first SIRC conference, he remains focused on gathering insights, particularly on AI, a tool he sees as valuable for the future but not yet fully utilised in his home market. “There’s a talk on AI tomorrow, so I’m here to see what I can bring to the market,” he said. Which of the following will be your organisation’s top priority in 2025? Source: AIR website visitors Bringing the market back into balance by Ahmad Zaki Market conditions for global reinsurance are in the best state they have been in 20 years, said AM Best chief rating officer Stefan Holzberger, while on-the-ground at SIRC. “We have a positive market segment outlook for the global reinsurance industry, and that is a combination of the prospect for reaching a good level of profitability and maintaining strong overall fundamentals in the market,” he said. This positive outlook is not typical for the ratings agency, as competition within the industry tends to temper growth potential. However, with investor demands for sustained returns at or above the cost of capital, reinsurers will report good performance for 2024, despite some recent and significant CAT activity in the US. “But those events, if anything, will maintain hard market conditions, make it less likely that you’re going to see an erosion of terms and conditions,” he said. Reinsurers in Asia could show a smoother performance compared to their European and US counterparts, due to the nature of insurance and reinsurance that is purchased here. “Reinsurers across Asia Pacific typically are writing a lot more proportional covers,” said AM Best managing director of EMEA and Asia Pacific Gregson Carter. “Globally, we’re seeing that positive pressures and the pressure to maintain pricing discipline, but that’s less evident in Asia Pacific. But reinsurance is a global business. So many of the capital capacity providers here are global players and they’re feeling the pressures elsewhere. We’re not expecting to see a huge differential in those pricing pressures and pricing trends.” Investor pressures Hurricane Ian in 2022 marked the beginning of the current hard market and contributed to several consecutive years of $100bn insured losses. “The reinsurance industry was reading the signals from their investors, and that signal was, if you want us to continue to back your business, you need to produce a better return in line with your cost of capital,” said Mr Holzberger. This investor pressures carried across the entire industry, from traditional reinsurance investors to the ILS markets. “Now, while there have been very significant CAT losses, they’re mostly being borne by the primary markets. Reinsurers have moved out of income state protection. They’re protecting that tail event balance sheet volatility, and it’s proven to be a pretty good recipe for the reinsurance segment in terms of growth,” he said. He added that most global reinsurers are also involved in the primary market and several big markets in North American and Europe have seen good underlying rate increases, which has only benefited these reinsurers. Sustainable cycle The primary insurers also have to bear these increased losses at a time when their customer base is facing rising cost-of-living prices. This negatively affects their ability to reprice and to let the market know that they are facing increased losses, putting them in a difficult position. “There is a balance to be had here,” said Mr Carter. “The reinsurance industry is holding firm in its stance of not wanting to become an earnings smoothing tool. But even if you just keep the attachment points where they are, inflation means that losses will start to creep up into those reinsurance layers relatively soon. And there may be some of that tension between the reinsurers not having losses, and the primary markets bearing the losses, which will force the market to come back into balance.” At the same time, reinsurers had seen an extended period where they were showing very poor returns for their investors and something had to change. “It is a question of at what point are investors happy with the returns but also willing to entertain more risk and to take on more of the working layers?” he said. “Right now, we don’t see signs of that just yet.” Source: asiainsurancereview.com

Is global warming shifting the diversification paradigm? As severe convective storms and other weather-related risks become increasingly synchronised across vast regions, are we overestimating the effectiveness of global diversification, the way we are looking at it, asks Deutsche Rück’s Mr Tarik Aouad . Historically, risk managers have relied on dispersing exposure across different geographical zones to mitigate losses, assuming that events in separate locations would occur independently from one another. However, with storms, floods and other extreme weather events now overlapping in both time and space – in the US, Europe but also across Asia – is the concept of global diversification, as we often use it, still a strong enough defence? Or is this strategy losing its effectiveness in the face of climate change? With the growing frequency and severity of weather-related risks, from severe convective storms (SCS) to tropical cyclones and floods, are traditional risk models becoming outdated? Climate change is amplifying the volatility of weather patterns across Asia and beyond, leading insurers and reinsurers to face unpredictable loss events that occur in rapid succession. In this context, it is important to note that global warming – and with it, climate change – are very likely the common denominator behind most, if not all, climate-related events. This, in itself, could be the major source of these growing interdependencies. More science Are these not times where we need more science? The industry may need to reassess models that assume risks are independent across time and geography, and instead adopt more advanced frameworks to model the interdependencies between these risks. In my view, copulas, for example, are increasingly valuable for modelling the growing correlations between weather events - such as SCS that can impact multiple regions simultaneously or in quick succession. Similarly, other advanced mathematical tools may be very helpful for capturing interdependencies that traditional diversification strategies may have overlooked. These tools, combined with executable formulas, can help in developing precise mathematical models that go beyond value at risk and its related expected shortfall. This enables a more accurate allocation of capital reserves to cover catastrophic events, such as floods and severe storms, while accounting for the likelihood of multiple events occurring simultaneously. However, these solutions seem currently to be still theoretically complex, requiring deep research before developing sophisticated statistical modelling for the market. More investment needed This may be the moment when the industry needs to invest in more experts with specialised knowledge in stochastic modelling – fresh talent from universities eager to tackle these real-world problems, finding new ways to getting more predictability rather than getting sometimes lost in ‘useless’ abstractions. In the absence of such expertise and given the challenges of time and geographical diversification, we must ask whether the global insurance market is truly prepared for the cascading impacts of increasingly interconnected weather-related risks. As Asia’s storms and floods become more frequent and destructive, the global reinsurance industry is facing the challenge of overlapping claims that exceed traditional event definitions. Are our current risk transfer mechanisms and contracts robust enough to counter these evolving threats? The revolution will not be televised Mr Paul McNamara, Editorial director, Asia Insurance Review and Middle East Insurance Review The Singapore International Reinsurance Conference (SIRC) just keeps on making headlines. This year, delegate numbers have exceeded the 3,000 mark for the first time – a testament to the power and attraction of the SIRC – and the quality and depth of debate that participants can witness and take part in. Never before has the SIRC community been more in need of a crystal ball than it is today – with the myriad threats of climate change, cyber risk, uncertain interest rates and rising geopolitical tensions facing the entire region. The SIRC has never before had such a compelling theme – ‘Revolutionize Reinsurance!’ – but you need to be here to soak up the ambiance and watch the frenzy of business activity taking shape before your eyes. The days ahead are bursting with ‘must attend’ sessions guaranteed to get delegates thinking and offering insights for winning insurance strategies. Delegates are sure to leave the conference with a real competitive advantage over those who have missed out. Each day, Asia Insurance Review through its official media partner status with SIRC, will offer delegates a recap of what’s been discussed – and some fascinating insights of our own – in this daily newsletter, available both in print and digitally. Every single major risk and technological development to face the insurance community in APAC will receive a thorough airing in the days ahead – insights from some of the brightest minds and smartest thinkers that the sector has to offer. If future success is awarded to those who are best prepared, there can be few forums more geared to arming with all the weapons they need to win the competitive battle that looms ahead over the next decade as AI begins to take centre stage. Five Costliest Nat CAT by economic loss (Asia) in 2024 ($m) Source: Aon Advancing beyond the traditional With Nat CAT losses on the rise, the (re)insurance industry must redouble its efforts to improve resilience, going beyond traditional risk management and underwriting. We spoke to Swiss Re’s Mr Urs Baertschi about what the industry needs to do to adapt. by Ahmad Zaki Local market dynamics might vary, but insurers are fundamentally focused on similar issues, which have remained consistent for some time, said Swiss Re CEO of P&C reinsurance Urs Baertschi. “In APAC, for example, the increasing severity of natural catastrophes and the protection gap continue to be high on the radar. Globally, we are increasingly surrounded by an uncertain and volatile environment in areas like geopolitics and macroeconomics.” As such, insurance companies are looking for support with traditional earnings protection, balance sheet and capital management, and the right data and analytics to underwrite and operate more efficiently. Increased CAT losses “One of the biggest challenges for the entire industry is the growing protection gap which calls for greater risk awareness and prevention. For example, in 2023, only 38% ($108bn) of global economic losses from natural catastrophes of $280bn were insured; in APAC, the protection gap is even more stark with just 19% ($10.6bn) of economic losses of $56bn insured,” he said. With more frequent and more intensive weather-related hazards, there have been growing losses, mainly driven by economic grow th, urbanisation and associated accumulation of assets. “For example, we continue to see building and economic development in areas prone to hazards, such as coastal regions,” he said. The solution requires a multi-faceted, coordinated and comprehensive approach beyond risk assessment and increased premiums. This includes adaptation measures such as enforcing building codes and mitigation measures that reduce or prevent losses in the first place, such as building flood barriers. Modelling needs to keep up This increase in Nat CAT losses has meant that CAT modelling has had trouble keeping up, especially with the variables that climate change has introduced. “For CAT modelling to stay ahead of the rapidly evolving risk landscape, it requires a more forward- looking approach. This contrasts with the traditional approach where CAT modellers adjust once losses have materialised, resulting in an optimistic bias,” he said. “At Swiss Re, we have a team of more than 50 Nat CAT experts who manage 200+ proprietary Nat CAT models to support underwriters. We continuously update our models to better reflect the full range of evolving risks and their underlying drivers. We see the main reasons for the recent rise in loss severity to include increased urbanisation, GDP growth, wealth accumulation in disaster-prone areas and inflation of claims costs.” For example, with greater urbanisation, the accumulation of risk has increased while the vulnerability of assets is also rising. For example, cars and houses have more technology, which is more expensive. Solar panels are becoming ever more abundant and will make a roof far costlier to replace. “And with increasing severity, we see things like hailstones the size of tennis balls instead of golf balls. All this needs to be considered in our models and depends on improved data quality and granularity,” he said. Getting the full picture “Based on what we see so far in macro trends, our view is that increased CAT losses are largely driven by issues such as increasing and more concentrated property values. Therefore, the importance of accurate underlying valuations, full knowledge of what is covered and more timely and transparent flow of information throughout the insurance value chain are more critical than ever,” said Mr Baertschi. “We’ve also seen a growing trend of loss creep – where losses dramatically exceed initial estimates. One example is the succession of record-breaking hailstorms in northern Italy at the end of last summer. Initial losses were estimated by industry data organisation CRESTA at $2.2bn, but costs continued to climb for months after the event and in the end, losses were nearly triple the first estimates at close to $6bn. “As an industry, we need to get the basics right from the start, including being diligent about insured risks from the beginning of the value chain to the end. This includes valuations that represent true replacement costs and regular reassessment of sums insured. A forward-looking approach to CAT modelling with more frequent model updates to capture present-day risk is essential.” APAC reinsurance sector transformation The reinsurance market in APAC is evolving rapidly, fuelled by new regulatory frameworks, climate challenges and tech-driven exposures. As reinsurers adjust structures and pricing to meet emerging risks, insurers are navigating tightened capital regimes and higher retention levels, presenting both challenges and growth opportunities across the region. Aon’s Mr George Attard tells us more. by Reva Ganesan The reinsurance landscape in the APAC region is undergoing rapid transformation, driven by a combination of emerging risks, regulatory changes and technological advancements. As markets across APAC strengthen their capital regimes - such as the introduction of risk-based capital frameworks and increased minimum capital requirements – insurers are facing new challenges in managing risk and meeting growth targets. At the same time, the rising demand for solutions to address climate risk, cyber, renewable energy transition and emerging technological risks such as EV related exposures, presents a significant growth opportunity for reinsurers. “In 2023, the property catastrophe reinsurance market experienced a major reset. After several years of reinsurers not meeting their cost of capital - compounded by several significant Nat CAT losses - substantial adjustments to structures and pricing were made,” said Aon CEO APAC for Reinsurance Solutions George Attard. “This included higher retention levels and reduced capacity for frequency covers, which resulted in insurers retaining a larger share of catastrophe losses. Pricing also saw sharp increases, with risk-adjusted rates rising as much as 50% in some cases,” he said. “Reinsurers have since reported stronger results and while risk-adjusted pricing has stabilised with decreases in some regions, structural discipline has remained firm. Insurers continue to bear more risk, but the market appears more stable overall,” he said. Trends in the region Looking ahead to 2025, Mr Attard expects current trends in the property catastrophe reinsurance market to continue. “While there will likely be considerable discussion around recent events like hurricanes Helene and Milton, we don’t anticipate any meaningful impact to pricing for 2025 given they are expected to fall within reinsurers’ expectations,” he said. “For example, in 1H2024, losses exceeded the decade-long average, yet reinsurers still posted strong results. This is largely due to the shift in risk burden to insurers, a result of the structural changes made in recent years. This demonstrates how the balance has shifted,” he said. Going into the 2025 renewals, Mr Attard said he anticipates a continuation of current conditions. “Based on our market analysis and reinsurer results, we continue to expect a disciplined market with momentum shifting towards insurers. This will result in increased pricing competition and greater flexibility,” he said. “Of course, outcomes will vary with each individual client’s pricing and underwriting strategies, loss experience and view of risk. Consistent growth across segments When asked about how reinsurance demands have shifted, Mr Attard said there was consistent growth across various segments - whether by geography, product or client type. Underlying exposure is increasing, driven by macroeconomic factors, particularly in this region resulting in increasing demand for both treaty and facultative reinsurance solutions. “When we focus on specific products, such as property, the 2023 market reset and increased retentions have left clients absorbing more risk. As a result, they’re now seeking reinsurance partners to help manage this retained volatility. “We anticipate growing demand for frequency protections, such as buy-downs, structured solutions, or the use of facultative reinsurance to mitigate that volatility. Reinsurers have already shown early interest in exploring such solutions on the property side,” he said. On the casualty side, as cyber risk awareness grows across the region, he said there is expected to be rising demand for cyber insurance. Similarly, with the energy transition underway - particularly in North Asia and the development of offshore wind farms – demand for renewable energy insurance is increasing, he said. “In addition to property and casualty, we’re also witnessing increased demand in the life and health sectors, signalling broad growth across the board. Clients are seeking stronger partnerships with reinsurers to support the expansion of these product areas, reflecting the ongoing market dynamics,” he said. India rolls out the red carpet for foreign players India is today one of the fastest growing economies in the world and the insurance sector has a crucial role to play in this growth story. We spoke to the IRDAI’s Mr Debasish Panda about his vision to insure every Indian by 2047 and the opportunities for insurers in the Indian market. by Jimmy John India is experiencing remarkable growth and optimism and is the fifth-largest economy, soon set to become the third largest. Insurance Regulatory & Development Au thorit y of India (IRDA I) chair man Debasish Panda said that at the heart of this transformation is the financial ecosystem, with the insurance sector playing a crucial role by providing risk protection, long-term capital and financial security that underpin economic resilience and sustainable growth. “By providing protection against various risks spanning across life, health, property, MSMEs, Nat CAT, it enhances the resilience of individuals and businesses during economic shocks and crises, by not only providing protection, but also promoting financial inclusion and contributing to long-term savings and capital formation,” said Mr Panda. Insurance for all Indians by 2047 Mr Panda said that that through the ‘Insurance for all by 2047’ initiative, it envisions a future where every individual in India is covered, and every business is protected by appropriate insurance solutions and achieving this goal requires a multi-dimensional strategy. “Towards this end, a robust regulatory framework has been put in place, which is not only supportive, progressive and principle-based but also enhances ease of doing business and fosters innovation through effective use of data and technology, while keeping the interest of policyholders central,” he said. Since insurance penetration in India is low, it presents a huge growth opportunity. Mr Panda believes that it is not just about addressing traditional gaps in life, health, property, motor and crop, but the focus should also be on underserved markets like the MSME, ‘missing middle’ in health and new and emerging risks such as climate change and cyber threats. “This would require more insurers, a wide range of personalised and customisable products, supported by an extensive distribution network that blends physical and digital channels, reducing costs and increasing affordability, and ensuring that we reach the last mile, last house and the last person,” he said. Technology, he believes will be the critical driver in achieving this vision. The regulator’s upcoming Bima trinity initiative focuses on inclusion, availability, accessibility and affordability and it includes: Bima Vistaar: A simple, benefit-based parametric product designed to meet the needs of those at the bottom of the pyramid and to bring more populace into the insurance fold Bima Vahak: A women-centric localised insurance distribution force Bima Sugam: An e-marketplace that will democratise and universalise insurance access. Mr Panda said that to make inclusive insurance a reality, collaboration among a wide range of stakeholders, including government at all levels, regulator, insurers, InsurTechs, NGOs, self-help groups, community organisations, microfinance institutions, local businesses, healthcare providers, educational institutions, among others, is crucial. To further this effort, a state-level insurance plan has been introduced, assigning insurers the responsibility to increase insurance inclusion within specific states. “All of these efforts, put together, are stepping stones towards realising the vision of Insurance for All, ensuring that no one is left unprotected,” he said. Specialised insurance Mr Panda feels that specialised insurers can address India’s unique risks, like in the agriculture sector, which employs nearly half of the workforce in India, that presents a massive opportunity. “The increased frequency of extreme weather events is creating demand for tailored crop insurance solutions,” he said. “So, with a rapidly growing market, increasing demand for specialised products and a supportive regulatory framework, India’s insurance sector offers substantial opportunities for new entrants, making it a compelling arena for growth and innovation,” he said. Poised for the future with the SIRC The Singapore International Reinsurance Conference has changed markedly over the years, becoming one of the primary ‘unmissable’ events in the industry’s calendar. We caught up with one of the main catalysts behind this change, Singapore Reinsurers’ Association’s Mr Marc Haushofer to talk about some highlights of this year’s event. by Paul McNamara The Singapore International Reinsurance Conference (SIRC) continues to attract ever-increasing numbers of delegates from around the world each year. While many use SIRC as a platform for their reinsurance renewal discussions, there is a growing perception that the quality of debate and insight at the conference remains unparalleled in this part of the world. Much of the credit for this metamorphosis goes to Singapore Reinsurers’ Association (SRA) chair Marc Haushofer and the supporting executive committee. SIRC changes over the years Mr Haushofer is quite clear about what he thinks the main changes to SIRC have been under his guidance. “What we definitely achieved is that the market value of this conference has grown significantly,” he said. “The last one before I took over had around 940 attendees, of which around 700 came from overseas. Last year we had 2,800, of which more than 2,000 came from overseas. “We have positioned this conference very strongly as a forum for showcasing the strength and diversity of our industry, whilst also facilitating discussion and stimulating debate, and promoting leadership around the critical developments that are shaping, challenging and advancing the reinsurance market,” said Mr Haushofer. Diversity Huge strides have been made in achieving greater diversity. “This year, we made further progress in this context. We are having Andreas Berger on day one as the opening conversation and with a female moderator. Without exception, we also have women in every panel this year. We have achieved a balance of something like 40/60 now in terms of panellists’ gender mix.” “These days, there is so much going on at SIRC,” said Mr Haushofer. “It is not just the onstage conferences that is the main highlight, companies are actively holding meetings on the sidelines and professionals are mingling and networking throughout the four days. There is an endless flow of conversation and ideas exchanged, which truly is the spirit of the SIRC. “The whole concept over the past eight years during my time has completely changed. It’s a highly interactive event today. The degree of interaction we find at the SIRC now is very concentrated and this, in my opinion, is almost second to none,” said Mr Haushofer. Changes for 2024 There is also a much broader geographic spread of speakers this year. “We have attracted voices of the industry from very far away,” said Mr Haushofer. “Without having built such a great brand, I’m sure that would not have been possible. “While there are more global perspectives brought into the conference over the years, we are also mindful to keep to our roots. Hence, this year, we decided to have an Asia forum on day three. This is something new that we have, to spotlight the issues that are unique to the Asia context,” he said. Conference theme By necessity, this year’s conference theme, ‘Revolutionize (Re)insurance!’, was decided some months ago. How has Mr Haushofer’s thinking developed in the meantime? “I’m still very happy with this theme of ‘revolutionize’,” he said. “It is a theme that encapsulates the times we’re in and drives urgency that the sector needs to evolve to keep pace.” The revolution will encompass many areas – including AI. “AI is and has already changed how we are doing business. Companies across industries are now looking to see how we can fully maximise the power of AI. This will mean huge changes not just on the business fronts, but also on the climate and how we live, work and play. “If we fully utilise the outcomes of AI, I don’t think we can do that without also revolutionising our reinsurance sector,” he said. Responsible AI and workforce upskilling imperative for insurers In recent years, the insurance industry in India has increasingly digitalised data, enhancing AI-driven models. Insurance companies are developing AI models for claims adjudication, risk-based pricing, fraud detection and customer service. We spoke with ICICI Lombard’s Mr Chirag Bhojani to find out more about AI adoption in India.  by Reva Ganesan In a recent news article, Mark Zuckerberg claimed that India has become the largest market for Meta AI usage. Rapid advances in AI accessibility, cost benefits accrued from automation of major processes and the flexibility of embedding AI into standard offthe-shelf business applications are leading to this rapid adoption. The insurance industry in India continues to be predominantly a high-touch industry where customers can buy insurance through dealers, agents, brokers, bancassurance sales representatives. Barely 5% of customers buy insurance through digital channels, according to ICICI Lombard head of data science and analytics Chirag Bhojani. “Having said that, the interactions driven through these physical channels are digital and its adoption rapidly accelerated during and post-pandemic. At the same time, the Indian consumer has become increasingly digital as is evident from the increase in digital payments driven by UPI and the heightened usage of food delivery apps in India such as Swiggy and Blinkit,” Mr Bhojani said. Over the last several years, the insurance industry has started seeing a lot more digitised data, which will help build and strengthen AI driven models. “We are seeing insurance organisations building AI-driven models around claims adjudication for better claims experience, risk-based pricing and segmentation models that help in the identification of fraudulent customers and channel partners and AI-driven bots for better customer experience,” he said. With the advent of gen AI, insurance organisations are also looking at newer methods of serving customers as well as in increasing productivity of employees across marketing, technology, customer service and other functions and processes, he said. Impact of AI on employment “Increased digitalisation and data are helping us understand consumers a lot more than before,” he said. “The computing power of the Cloud is helping us to deploy large scale AI models quickly and efficiently. AI is helping in automating repetitive tasks and in the creation of automated responses, images, videos and in deciphering complex problems faced by us,” he said. He said, in order to build such models, organisations are having to upskill and, in many cases, reskill workers to be able to feed data to such models. “Core skills that are required to perform a job today are different from 10 years ago and will not be the same in the next 10 years hence continuous learning and skilling are required for the skillsets of tomorrow,” he said. According to a recent OECD report, he said, “We are seeing AI help in higher productivity, improved job quality and stronger occupational safety and health.” “Overall, organisations are investing time and money in upskilling of workers to ensure that they have the skillsets required to harness the power of AI and machine learning (ML) in years to come,” he said. “Organisations are continuing to experiment using data and it will not be long before we see an AI underwriter that assesses risk, an AI driven claims adjuster that helps in straight through processing of claims or an AI driven bot that helps answer queries in real-time,” he said. “While AI is helping make sense of the volume and the variety of big data, explainable or interpretable AI is still a relatively new field but will help explain the rationale behind the complicated AI and ML models that are built.” He said it is expected that complex neural networks that are behind a lot of such AI models will be simplified by explainable AI as it will help in identifying and interpreting the predictions made by such models. Ensuring mental health wellbeing in reinsurance Mental health wellbeing in the workplace has become more important than ever, as remote offices have increased social isolation and combined workplace and home stress into a tangled knot for many employees. We spoke to Marsh Mercer Benefits’ Dr Kanupriya Jain to find out more. by Ahmad Zaki COVID-19 began a period called a ‘polycrisis’ – where several different crises interacted in such a way to have a greater overall impact that exceeded the sum of each part. These crises included war, environmental disasters, ongoing climate change, political instability and rising inflation levels alongside the major health concerns that the virus brought. While all of this went on, the workplace began to change. Companies transitioned to remote offices and employees adjusted to the home and the workplace being the same place. These external and internal factors affect employees’ health and wellbeing, especially in vulnerable groups such as low-paid employees and those who are unwell, said Marsh Mercer Benefits (MMB), in its 2023 Health on Demand report. Asia faces more pressure Asian workers managing growing work, home and social pressures, stigma surrounding mental health and the impact of COVID-19 pandemic have contributed to the deterioration of mental health. Public and self-stigma is an overwhelming problem for workplaces and society across Asia. However, there’s a positive shift as more people in Singapore are willing to seek help from health professionals in 2022 (56.6%) compared to 2019 (47.8%), said the MOH survey. According to MMB’s report, employees are twice as likely to talk about mental health concerns with their managers if they feel that their employer cares. “Leaders need to set a culture of trust, empathy and care. Managers should create a safe environment where employees feel comfortable having open and unbiased conversations. They are also encouraged to provide a suitable action plan with periodic check-ins,” said MMB Regional Consulting, ASE AN and HK workforce health and sustainability leader Kanupriya Jain. She also suggested that managers should be proactive and stay informed about wellbeing resources provided by the company, like employee assistance programmes (EAP), mindfulness apps, workshops, on-site medical support and telehealth. They should also attend training such as the mental health first-aider programme to understand the complexities and discretion required to support and detect mental health issues appropriately. “However, managers should refrain from giving medical advice to employees. Instead, they should direct them to the right medical specialists,” she said. Employee response Many insurers are also trying to find the right solutions to address mental wellbeing, and thus, not all introduced solutions are received with the same enthusiasm. “Responses of employees vary depending on their state of wellbeing, income levels, and caregiving responsibilities,” said Dr Jain. “Mental health strategies should therefore cater to employees’ unique needs, prioritising care for those who are vulnerable.” Currently, (re)insurers are also partnering with clients to provide education, resources and tools to build resilience, provide access to the right support systems and enable selfcare. MMB’s report found that virtual mental health counselling is provided by nearly half of employers while one-third of them offer training to recognise and address mental health challenges. Source: asiainsurancereview.com