We have some good news in store – the Early Bird Registration deadline is extended to allow more time for practitioners and friends of the industry to sign up for the EAIC 2024 Hong Kong Conference. The new Early Bird Registration deadline is now set on 12 July 2024. After this date, the regular registration rates will apply. Make good use of the discounted Early Bird rates and sign up for this flagship event now!  EAIC 2024 | Registration Be immersed in the unique Hong Kong experience!  Be part of the EAIC 2024 Hong Kong Conference! * Group registration discount available. Check with the Conference Secretariat at info@eaic2024.hk. The 30th East Asian Insurance Congress to be held in Hong Kong on the 24th to the 27th of September 2024 is just around the corner. This highly anticipated gathering is set to be one of the standout highlights of the industry in 2024. Don’t miss the opportunity to: • Foster valuable connections and explore potential collaborations with industry peers. • Immerse yourself in cutting-edge knowledge and gain exclusive insights from esteemed industry experts and thought leaders. We look forward to seeing you in Hong Kong and sharing a wonderful experience together.

The Philippines' general insurance industry is set to grow at a compound annual growth rate (CAGR) of 9.5% from PHP145.4bn ($2.6bn) in 2024 to PHP209.0bn ($3.8bn) in 2028, in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company. GlobalData’s Insurance Database reveals that the Philippines’ general insurance industry is expected to grow by 14.0% in 2024, supported by a strong economic growth, uptake in the construction sector, and the country’s exposure to natural catastrophic (Nat CAT) events. Mr Sutirtha Dutta, insurance analyst at GlobalData, said, “The Philippines general insurance industry grew by 33.8% in 2023, the highest growth in the last five years, supported by strong growth in the key economic sectors such as automobiles, construction and financial services.  The initiatives by the government to improve financial literacy, through financial inclusion have also supported the general insurance growth. The trend is expected to continue in 2024.” Property Property insurance is the leading line of business in the Philippines general insurance industry, which is expected to account for 41.5% share of the general insurance GWP in 2024. Property insurance is estimated to grow by 17.2% in 2024, supported by rising demand for policies covering Nat CAT events. According to Philippines Statistical Authority, major natural disasters in the country like typhoons, floods and earthquakes affected 12.1m people in 2023 and accounted for losses of PHP23.2bn. Mr Dutta added, “The initiatives by the government to expand crop insurance and encourage financial inclusion will support the general insurance growth. In the first quarter of 2024, the Department of Budget and Management (DBM) provided PHP900m of crop insurance cover out of a planned PHP4.5bn for subsistence farmers and fishermen through the state-owned Philippine Crop Insurance Corporation (PCIC).” PCIC has also entered into an agreement with CARD Pioneer Microinsurance Inc (CPMI) to further expand crop insurance. This is the first step towards public-private partnership in agriculture insurance in the country, which will support the growth of property insurance during 2024-28. Property insurance is expected to grow at a CAGR of 12.3% during 2024-2028. Motor Motor insurance is the second-largest line that is expected to account for 24.5% share of general insurance GWP in 2024. Motor insurance is expected to grow by 12.4% in 2024, driven by rising vehicle sales. As per the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA), vehicle sales registered a growth of 12.7% in the first quarter of 2024 as compared to the same period in 2023. Motor insurance is expected to grow at a CAGR of 7.5% during 2024-28. Marine, aviation and transit (MAT) insurance is expected to account for 6.3% share of the general insurance GWP in 2024. MAT insurance is expected to grow by 12.2% in 2024, supported by the growth of foreign trade and the development of the country’s port which will support the increase in trade and cargo volume with Japan, one of the top trading partners with the Philippines. The revival of the Philippines-EU free trade agreement (FTA), which is currently under negotiations, will also expand the country’s export business and support MAT insurance growth. Liability, financial lines, and miscellaneous insurance are expected to account for the remaining 27.8% share of the general insurance GWP in 2024. Mr Dutta said, “Growth in the construction and trade sectors and rising vehicle sales are expected to present a positive outlook for the general insurance industry over the next five years. Increasing losses from nat-cat events will prompt insurers to reassess their risk exposure and strengthen their underwriting practices that will lead to higher premium prices.” Source: www.asiainsurancereview.com

Get ready to witness Atty. Reynaldo A. Regalado, the Insurance Commissioner of the Insurance Commission and Jose Arnulfo “Wick” Veloso, President and General Manager of the Government Service Insurance System (GSIS) share key insights from the perspective of their institutions about the climate risk at hand and the important insurance solutions. Given the particular vulnerability of the Philippines to natural disasters, insurance is crucial for providing post-disaster funding, thereby aiding in quicker recovery and building overall resilience against climate impacts. There is also an increased need for insurance penetration and digitalisation to improve the industry's accessibility and efficiency. In the face of increasing climate-related risks, how should public-private partnerships work to enhance insurance coverage and resilience against natural disasters? Engage in concrete discussions at the 20th Asia NAT CAT and Climate Change Summit 2024 on efficient processes and systems and what it should look like for your business. Speaking & Sponsorship Opportunities: Asia Insurance Review gives new & returning speakers an opportunity to share their knowledge and experience. Benefit from Sponsoring and Exhibiting at this premier meeting place for key executives and top decision-makers from International Insurance groups as well as Government and Regulatory Officials. Sponsorship options can be specially tailored to your organisation's objectives. Please contact Ms. Sheela Suppiah / Ms. Ritu Sharma at sheela@asiainsurancereview.com; ritu@asiainsurancereview.com

Asian Reinsurance Corporation's (Asian Re) operating performance, though marginal, is on an improving trend, notes AM Best. The reinsurer’s operating performance has exhibited volatility in recent years, with a five-year average return-on-equity ratio of 1.5% and a combined ratio of 110.3% (2019-2023), as calculated by AM Best. The company has reported positive operating results in four of the past five years. Underwriting performance in 2020 was hampered by a reserve strengthening exercise and higher-than-expected claims experience. Following remediation actions undertaken by the company, the combined ratio improved to 101.6% in 2023 (2022: 103.3%), taking into account losses arising from the Turkiye earthquake and Typhoon Doksuri. Prospectively, AM Best expects Asian Re to execute on a business plan aimed at improving underwriting results, which coupled with robust investment returns, is expected to support positive overall earnings prospectively. Ratings affirmed AM Best has affirmed Asian Re’s Financial Strength Rating of ‘B+’ (Good) and Long-Term Issuer Credit Rating of ‘bbb-’ (Good). The outlook of these credit ratings is positive. The ratings reflect Asian Re’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM). The positive outlooks reflect AM Best’s expectation that the successful execution of Asian Re’s business plan will lead to an improving trend in underwriting and operating performance metrics over the intermediate term. Balance sheet strength Asian Re’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2023, as measured by Best’s Capital Adequacy Ratio (BCAR), and is expected to remain at this level over the medium term. Notwithstanding, the company is viewed to have a modest absolute capital base of $73m at year-end 2023 as compared with regional reinsurance peers, which increases the sensitivity of its balance sheet to shock events. A significant offsetting balance sheet strength factor remains Asian Re’s high risk investment strategy, which includes the holding of a sizeable balance of cash and deposits in a sanctioned country and in a country that defaulted on its sovereign debt. Although the company has reduced its holdings of some of these assets in recent years, AM Best views this investment strategy as creating increased liquidity and credit risk for Asian Re, as the imposition of existing and future sanctions and/or economic crisis in these respective countries drives a heightened risk of transfer restrictions and/or asset write-offs. Business profile AM Best views Asian Re’s business profile as limited, reflecting its position as a regional non-life reinsurer, with a modest-sized gross premium base of $26m in 2023. The company writes treaty and facultative business in Asia, the Middle East and Africa. The company continues to grow its book of business, with a focus on improved diversification by geography and line of business, following a significant contraction in 2011 driven by severe catastrophe events and the subsequent need to recapitalise. Despite persistent market and regulatory challenges, Asian Re is expected to continue to implement several strategic initiatives and business partnerships aimed at expanding its underwriting portfolio and market presence over the medium term. AM Best considers Asian Re’s ERM approach to be appropriate relative to the current size and complexity of its operations. The company continues to develop its risk management framework and has demonstrated improvements in its risk management capabilities over recent years. Source: asiainsurancereview.com

By Herminia S. Jacinto This column was inspired by a friend and colleague who has just completed 50 years in the insurance industry. Since he is only in his early 70s, the job in the first insurance company he joined must have been the first one! And he has since stayed in the same industry and is still there! Now, he heads one of the top five life insurance companies in the Philippines, the BDO Life Assurance Co. Inc. In the dinner he hosted for family and friends to commemorate the event, he narrated his experience as if it happened only 50 days ago, not 50 years ago. Another friend wrote about Mr. Renato Vergel de Dios and the celebration in an earlier column in this paper. We just cannot get over the fact that there are still loyal and committed professionals in the insurance industry. The Ayala Group of companies, which included the Insular Life before they became a mutual company, the FGU Insurance Corp., the Ayala Life Insurance Co. and the Universal Reinsurance Corp., had a retirement program that granted generous retirement payouts to those who completed the required years of service or reached the age of 60. I can still remember the sadness and the difficulty of accepting that they would no longer be part of the companies where they spent the best years of their lives. The situation is very different now. I believe that it is not only in the insurance industry where we are experiencing fast turnovers of people especially the millennials and now the Gen Zers. An oldtimer like me still cannot understand why employees would leave an industry that offers so many opportunities to young professionals, especially new graduates. Since our schools do not have courses specifically about insurance, training is done in the industry either by the companies that hired them or by the Insurance Institute for Asia and the Pacific (IIAP). Training is not only about the technical aspects of insurance; management and other soft skills are also part of the program. There are also many opportunities to train abroad as foreign companies offer training programs to employees of their clients and business partners. Training and/or attending conferences and meetings in various parts of the world is another opportunity to learn more about the business and interact with other practitioners. I have been fortunate to have been sent to these conferences and the experience derived from these meetings cannot be expressed in words alone. Last week, I saw on Facebook a post of a group of ladies who qualified for the prestigious Million Dollar Round Table (MDRT) award for life insurance agents all over the world. They were in the airport on their way to Vancouver, Canada, where the annual conference was to be held. The life insurance companies offer training programs for applicants to become life insurance agents. The Insurance Commission and IIAP conduct the qualifying examinations both in person and online. To attract young graduates to join the industry, the IIAP has the Select Universities Training Insurance Training (SUITS) program. It is a two-month intensive training course for new graduates to be trained as future members of the management of an insurance company. Those who qualify for the training program will be entitled to an all-expense paid training at IIAP with meal and transportation allowances. They will later be farmed out to the insurance companies, which have requirements for managerial staff. The insurance industry is now repositioning itself to be in sync with the current developments in technology. AI, blockchain and the Internet of Things (IoT) are not just buzzwords to them. They are now in the process of adapting these technologies to enhance customer experience, streamline operations, and improve risk assessment. These should attract the young techies to join the insurance companies. Last May 30, 2024, the IIAP and the Philippine Insurers and Reinsurers Association (PIRA) jointly held the Philippine Insurance Summit with the theme "Navigating the Future — Trends, Technologies and Transformation in the Rapidly Evolving Landscape of Insurance" at the ballroom of the New World Hotel in Makati City. It was very well attended, with over 350 registrants and sponsors. The topics covered insurtech, cyber security, customer experience and governance in the digital era. Time was just not enough for the open forum and the discussions that followed the presentations that perhaps another conference has to be held for updates on insuring electric and hybrid vehicles. Source: manilatimes.net

Senangdali, a Philippine subsidiary of the Malaysian InsurTech firm Senang.io, is working with GoodTech, a FinTech company linking farmers and homebuyers, merchants and gig workers, with rural financial institutions, to offer loan protection to rural banks. The two parties have launched a new loan protection insurance product, GoodProtect, underwritten by local insurance providers. This strategic initiative aims to provide financial security for over 57m Filipinos, representing 52% of the national population. The Philippines is home to more than 350 rural banks, serving as crucial financial pillars in their local communities. The initiative is facilitated by the Malaysia Digital Economy Corporation (MDEC) which helps Malaysian tech companies to venture overseas. Following the rollout of the loan protection insurance, the partnership plans to introduce a motor aggregator platform and personal accident insurance, further diversifying the range of services available to rural banks. Source: asiainsurancereview.com

We are pleased to invite you to the upcoming UNDRR WebTalk on "Investing in Disaster Risk Reduction," focusing on the direct and indirect costs of disasters. Knowing the direct and indirect costs of disasters is important to put in perspective and understand the importance of investing in disaster risk reduction. This 30-minute conversation is an excellent opportunity for government officials and practitioners to enhance their understanding of disaster costs and advocate for more effective DRR strategies. No prior financial knowledge is required. Understanding the direct and indirect costs of disasters is part of UNDRR’s comprehensive approach to DRR Finance: 1.      Estimating the direct and indirect costs of disasters 2.      Mapping the existing financing landscape 3.      Identifying potential DRR investments 4.      Selecting suitable financial mechanisms 5.      Integrating the results into an implementation plan Registration link: https://undrr.zoom.us/webinar/register/WN_V-9aJZERTSCDvHrU8h_VEg We look forward to your participation.

In 2024, Asia hosts elections in some of the world’s largest and most diverse democracies, leaving investors exposed to shifts in the risk landscape. Top among issues to track are drivers of unrest and insecurity, starting with major electoral contests playing out against illiberal trends. The runup to November’s US election will also heighten the region’s complex dynamics of cooperation and conflict in the shadow of superpower rivalry. Meanwhile, emerging Asia’s rising climate change risks and decarbonisation challenges will have to be addressed in the context of worsening debt burdens. Elections amid illiberal trends boosting unrest The first half of 2024 brings significant elections in APAC, including Bangladesh and Taiwan that took place in January, Pakistan and Indonesia set for February, and India’s in April/May. Deepening social and cultural divisions, rising inequality, and illiberal democratic trends mean tensions are spiking. Indeed, all the economies listed above feature in the two highest risk categories of our new Civil Unrest Index, which predicts the probability of large-scale protests over the next year. Elections could add fuel to simmering discontent, particularly with the barriers to expressing dissent rising in India and Indonesia, whose scores on our Freedom of Opinion and Expression Index have deteriorated over the last five years (see chart). Despite the prospect of raised social and political instability, significant post-election economic policy changes are unlikely in India and Indonesia. Protectionism will likely continue, including import restrictions and export curbs for key commodities. However, leaders across APAC will seek to benefit from Western efforts to diversify supply chains by attracting foreign investment to increase value-added production. Figure 1: Civil unrest likely around Asia’s elections - freedom of speech declines in India, Indonesia Much of APAC will maintain hedging strategies as US election uncertainty looms The next US president won’t take office until January 2025, but November’s election will weigh heavily on Asian capitals in 2024. Most countries will continue to avoid picking a side in the superpower rivalry, even if they lean more towards China or the US (see map). But the November vote will offer another indicator of whether the US can maintain its consequential role in APAC. The long-term trajectory of strategic US-China competition is set in bipartisan stone. That leaves the region’s middle powers, such as Australia and Japan, facing the greatest uncertainty over US policy direction, as domestic politics and conflict in the Middle East and Ukraine increasingly absorb Washington’s attention. Election uncertainty could extend to regional crises. Geopolitical flashpoints like the South China Sea and the Korean peninsula remain firmly on the radar, but other APAC disputes also have escalatory potential, such as at the Iran-Pakistan border and Myanmar. As expected and unexpected crises arise, question marks over US commitment to the region could further impact stability and create doubt for investors. Figure 2: Many APAC countries continue to hedge between the US and China Asia’s growth sectors on the frontline of climate change As APAC’s real estate and infrastructure sectors boom, extreme weather fuelled by climate-change stands out as a top risk in the year ahead. Global temperatures will likely approach 1.5°C above pre-industrial levels again this year, driven in part by the positive phase of the El Niño-Southern Oscillation. The current El Niño is projected to last until mid-2024, intensifying the South Asian monsoon, and the Pacific typhoon and Australian wildfire seasons. Each risks damage and disruption to existing infrastructure, alongside delays to new projects and spiralling insurance costs. Our data shows emerging economies in South and Southeast Asia – where demand for new infrastructure is particularly acute – are among the most exposed globally to future climate extremes over the coming decades (see chart). The IMF reports that developing states in the region must invest USD1.1trillion annually in infrastructure to maintain growth momentum and offset climate change. Investors looking to capitalise should pay ever greater attention to climate extremes. Growing economies in South and Southeast Asia are most vulnerable to future extreme climate events Protracted finance and technology deficits slow the pace of decarbonisation As green technologies scale up globally, their development and manufacturing will continue to be concentrated in markets such as the US, the EU, China, and Japan. Asia’s developing countries could end up getting the short end of the transition stick. Despite vibrant demand, implementation of green capital will remain fraught with challenges in 2024 due to the lack of a robust, unified green taxonomy framework. Investors will continue to struggle to identify reliable transition projects in key emerging markets that sit in the high to very high risk categories of our Efficacy of the Regulatory System Index. India, Malaysia, Indonesia, and Vietnam will remain the hot markets for green investments in 2024. However, competition over land use for energy production, coupled with poor infrastructure planning, will further intensify resource scarcity in these markets, which are already high and medium risk on our Food Security and Water Security indices. The Sovereign ESG landscape: High debt weighs on environmental and social sustainability Several Asian emerging markets, including Sri Lanka, the Maldives, India and Laos, show high to very high risk on our Public Debt Index, which will likely depress already weak sovereign ESG performance in 2024. Sustainable investors should beware of growing trade-offs with highly indebted governments likely to prioritise debt servicing and economic growth over sustainability-related projects. On the environmental side, debt-for-nature swaps may provide governments an opportunity to simultaneously reduce debt and undertake work to protect their natural ecosystems. Laos, Sri Lanka and others have recently pitched, or explored, debt-for-nature swaps. More broadly, austerity measures to reduce debt will likely impact social safety nets and the quality of health and education, creating fertile ground for unrest, with over half of APAC economies showing high to very high risk scores on our new Civil Unrest Index. Investors may be particularly concerned about the S- and G-pillar implications, especially amid ongoing economic fallout from Sri Lanka’s political and governance crises in 2022. Figure 4: High debt likely to exacerbate already weak ESG performance

How has the market's risk profile evolved – and where does it go next? In his role as partner and global insurance leader at PwC, Jim Bichard (pictured) oversees a team of some 15,000 professionals serving insurance clients across 100-plus countries on a daily basis. It’s a role that has helped him develop a unique point of view of how the sector has evolved, where it stands today – and what the future holds for the insurance market. Digging into some of the key pain points he sees facing insurance businesses, Bichard looked to PwC’s most recent ‘Insurance Banana Skins’ report and its finding that insurance companies are being exposed to a plethora of macro-economic and geopolitical risks. What’s pressing on insurance companies today? Interest rates, inflation and geopolitical conflict are just some of the risks having either first or second order impacts on insurance companies today, he said. Meanwhile, as part of a regulated sector, insurance companies are grappling with increasing complexity. “Technological disruption and climate change are risks that continue to move up the register,” he said. “Scenarios such as cyber are creating risks; and given the amount of reliance on data across the whole of the insurance market, it’s no surprise that data protection and cyber is high on the agenda. “Climate is a risk that continues to grow and grow in terms of its impact on the operations of an insurer, its balance sheet, the products it creates and distributes, and the investments that it holds. It’s very pervasive.” The other challenge that PwC is championing greater understanding of across the market, is the trust gap that exists in today’s insurance ecosystem. A core part of the insurance offering is the need for insurance companies to be trusted and resilient, he said, and crucially, to make good on the implicit promise of insurance - that it will be there for customers in their hour of need. “Generally speaking, trust in financial services hit a really low level during the pandemic. So, the insurance industry has a lot of work to do to improve trust among the public and its customers,” he said. “It’s hard to assess this risk without looking at the impact of digital and AI which is impacting all parts of the operations of insurance companies. “Part of that is around customer preferences and the fact that these are changing really rapidly. Individuals and corporate customers are used to being able to access other areas of financial services digitally. They are also now raising questions about why insurance is a one-year product, about the potential for usage rather than loss-based products, and about why insurance hasn’t moved to be more preventative and protective.” Balancing performance with navigating external market conditions Bichard highlighted that, overlaid across all these factors is an emphasis on performance. Insurers have got to remain profitable, and ensure that premiums exceed their claims, he said, which is no mean feat in today’s environment. Performance across the global sector has been quite tough, certainly up until last year, so these companies are facing juggling those performance demands and meeting their investors’ requirements while dealing with macro factors, some of which are manifesting now and some of which are poised to be even greater challenges down the line. “We do a CEO survey every year, and one of the most interesting questions posed is whether they think their business will be viable or sustainable in five-to-10-years time,” he said. “This year, we had a record response of 45% of CEOs saying they do not think their business will still be viable in five to 10 years. And that’s just as high for insurance as for any other sector. So, what does that look like? Because five years is not a long time in which to reinvent your business.” How have the challenges facing insurers evolved? Having started in insurance in the mid-90s, Bichard has seen for himself how the challenges facing the market have – and haven’t – evolved over the years. What is clear, he said, is that the surrounding risk landscape has never been quite as complex as it is today. Whether that’s translating into increased riskiness is hard to say for certain, but there is certainly more complexity. A large part of this is due to the new risks which have emerged over the last decade, he said - the increasing complexity of the market is making accurately pricing risk harder than ever. “That pace of change is only accelerating,” he said. “It calls to mind that quote about how digital technology has never been as fast, and will never be this slow again! We’re really only just wrapping our heads around the fact that we’re in a surge right now and, until that calms down, the industry is going to get more and more disrupted.” Insurance, in theory, has always been a data-driven industry, he said, as it involves looking at historical performance or loss experiences and using that to price risks, and effectively predict the future. The computing power and the availability of data and, as a result, insurers’ ability to model and run simulations is now in a completely different space, with things that would otherwise have taken months or years to do, now happening almost instantly. “Interestingly, it hasn’t made us significantly more profitable,” he said. “The industry is not, as a result, in a position where it never has a loss-making year because competition is still there. But data and the ability to use analytics and modelling and computing power – and particularly how Cloud is really just starting to have an impact on that – is an important consideration.” Source: insurancebusinessmag.com

Our PIRA Executive Director Mitch Rellosa, was invited to the 2024 P&A Grant Thornton Economic Overview and Industry Updates held on June 7, 2024. He tackled the prime importance of the insurance industry in the Philippines and in this fast shrinking world where practices in one corner of the world are quickly adopted in another, especially when it comes to technology.