Insurers are becoming increasingly concerned about greenwashing as ESG requirements become tougher according to a new global study conducted by Ortec Finance. The study conducted among investment management professionals at life insurers, London market (re)insurers and investment managers revealed that nearly half (45%) are very concerned about the current level of greenwashing when it comes to investing, with 53% quite concerned. The participating institutions are also planning to increase portfolio allocations to green bonds and specialist climate focused funds over the next two years, with 62% boosting allocations to green bonds and 75% to specialist climate focused funds. However, the study found that 80% of the participants expect the range of investment opportunities available to insurers to narrow over the next two years because of increasingly stringent ESG requirements. Only one in five participants (18%) believe the industry as a whole has very good ESG strategies and programmes currently in place. That rises to 21% when companies were asked about the strategies and programmes their own organisation has in place. Ortec Finance managing director and head of insurance and investments Hamish Bailey said, “There is strong demand among insurers and insurance asset managers for specialist climate focused funds and green bonds but that is running up against increasing concern about the current level of greenwashing. “Insurers increasingly need support in identifying investment opportunities which deliver for their institution and also meet ESG requirements, which means a tougher focus on greenwashing,” said Mr. Bailey. The study conducted in November 2023 included 100 investment management professionals at life insurance companies, Lloyds of London insurer and reinsures and at fund managers who support insurers. Study participants are located in the UK, the USA, France, Germany, Hong Kong, Italy, Netherlands, Singapore and South Korea. Collectively the organisations they work for manage around $5tn. Source: asiainsurancereview.com

What sustainability could mean in insurance was the question Swiss Re head of life and health, APAC ex China Daisy Ning posed at the 2023 Global Insurance Forum. According to Zurich Insurance chairman Michel Liès, sustainability is the way in which “any kind of initiative with an individual, or a collective one, is not interrupted by disruptive moments”. The insurance industry could address this from a neutral level, he believes. “We have to survive each year paying claims that result from climate events. Whether it is a blip … trend is an important question, but not the immediate one we have to answer. “It is also something that the industry is looking at as we are the first industry probably touched by the results of something that has resulted from not taking care of climate and sustainability,” he said. Insurers, Mr Liès also thinks, need to keep a “balanced view between the environmental dimension of sustainability and the social environment”. “We need to be careful about social evolution. A lot of projects in the past have been interrupted because of social disruptions. So while governance is important, the environment also needs to be balanced. “Sometimes I get the impression that some of the tension we experience is due to the fact that we put a lot of emphasis on the environment and forget governance a bit,” he said. Source: asiainsurancereview.com

MANILA, Philippines—Ranked as the most disaster-prone country for 13 years, the Philippines now also emerged as the ninth most earthquake-threatened nation worldwide, experiencing 581 quakes in 2023 alone, recent UK research showed. Situated in the ‘Pacific Ring of Fire,’ the Philippines is naturally prone to seismic activity. According to the Philippine Institute of Volcanology and Seismology (Phivolcs), the country experiences an estimated 100 to 150 earthquakes annually. A study by Utility Bidder, a UK-based business energy consultancy company, said that the Philippines endured 581 earthquakes in 2023 alone, ranking it ninth most earthquake-prone country in the world. Among these was a devastating magnitude 7.4 earthquake that hit Hinatuan in Surigao Del Sur last December 2, which was caused by movements in the Philippine trench. The strong quake led to more than 6,500 aftershocks and claimed three lives. Indonesia topped the list after experiencing 1,941 earthquakes last year. According to the study, the largest recorded a magnitude of 7.1. “An earthquake with a magnitude over seven is considered a major earthquake. Severe damage will have occurred at the epicenter,” the researchers noted. In addition to the Philippines and Indonesia, the list of countries most vulnerable to earthquakes include: Mexico (2nd): 1,548 significant earthquakes Turkey (3rd): 847 significant earthquakes Chile (4th): 810 significant earthquakes Japan (5th): 780 significant earthquakes Syria (6th): 724 significant earthquakes Papua New Guinea (7th): 666 significant earthquakes Guatemala (8th): 624 significant earthquakes Peru (10th): 486 significant earthquakes The study accounted for any quake with an epicenter within 300 kilometers of the country and a magnitude of 4 or above. Costly disasters The study shed light on the escalating financial toll of disasters, revealing that in 2022, the total cost amounted to an astonishing £178 billion, equivalent to $223.84 billion or over P12 trillion. This figure represents a 43% increase from numbers a decade ago, when the global cost of natural disasters in 2012 was recorded at £125 billion, illustrating a significant upward trend in the economic impact of these catastrophic events. “Flooding was much more of a problem in 2022 than in 2012. In 2012, flooding cost the world nearly £21 billion in damages, whereas, In 2022, flooding cost over £35 billion — 74% more than ten years ago,” the study said. “Earthquakes showed the most significant decrease in costs, falling from £15 billion in 2012 to £10 billion in 2022, a 33% drop,” it added. PH: Still most disaster-prone country Referencing the 2022 World Risk Index, the UK-based research underscored the Philippines’ position as the country most vulnerable to disasters globally. That year, Asia was prominently represented among the 10 most at-risk nations, with the Philippines, India, Indonesia, Myanmar, China, Bangladesh, and Pakistan all making the list. The World Risk Index evaluates the risk of disaster from extreme natural events across 193 countries, providing insights into each nation’s susceptibility and resilience to natural catastrophes. “Extreme natural events cannot be prevented directly. However, governments can reduce risk by strengthening education and health, fighting poverty, and taking preparedness measures,” the study said. “Countries that install and use early warning systems, build earthquake-proof buildings, and invest in climate and environmental protection are better prepared against extreme natural events,” it continued. In the latest World Risk Index report by the Institute for International Law of Peace and Armed Conflict and Bündnis Entwicklung Hilft, the Philippines continued to be recognized as the world’s most disaster-prone country in 2023, maintaining its position at the forefront of risk since 2011. Climate change and energy consumption The study highlighted climate change as a key driver of escalating global disaster frequencies. “Higher temperatures also lead to more water vapor being evaporated into the atmosphere, contributing to the intensity of storms,” the study said. Additionally, it pointed out that warmer sea surface temperatures could boost wind speeds, heightening the risk of tropical storms. Rising sea levels further expose additional areas to the erosive power of waves and currents, amplifying flood risks. Utility Bidder also linked climate change to global increases in energy consumption. The firm emphasized the urgency for businesses to “take a more proactive approach to their energy consumption and compare their business energy suppliers to ensure they get the most efficient energy supply and the best business electricity rates,” urging companies to adopt more sustainable practices. Source: msn.com

By Herminia S. Jacinto The rush for the coming Easter break has started over the weekend. Airports, bus stations and highways are clogged with both vehicles and people on their way to their much-awaited long vacations. The last week must have been a very busy one for people shopping for their vacation outfits and the traditional "pasalubong." Nothing can be forgotten, so the checklist must be reviewed many times. If the house is to be left without anyone, the locks and electrical connections are checked before leaving. Insurance people have an additional checklist. Is the fire insurance cover of the house in force? Do we have comprehensive insurance coverage for the vehicles that will travel to their destinations? With so many vehicles on the road, the chances of accidents occurring are doubled. How about travel insurance? Do we need them, or do we just pray that there will be no need for them? One must bear in mind that travel insurance must be bought before and not during the travel period! One need not worry, however. Just go online and get your travel insurance from any of the insurance companies that sell them. Or get your favorite insurance broker or agent to do it for you. Technology has brought insurance to your homes. One can start his travel with peace of mind knowing that his properties are either insured or held covered by the insurance company representatives. Long before the use of technology in getting an insurance cover, insurance companies had already come up with various ways of making it easy for buyers of insurance to get their insurance protection. One way is through bancassurance. Bank clients who visit their favorite bank branch are introduced and referred to a financial advisor who can attend to their insurance requirements. The financial advisor represents the insurance company, which is normally owned or belongs to the same group as the bank. The bank branch becomes a one-stop shop for the client for both his banking and insurance needs. In the Philippines, the life insurance companies, which are the leading insurance producers, belong to the top 5 banks in the country. For the non-life insurance requirements of the insured, some lines of insurance, like the Comprehensive Third Party Liability (CTPL) insurance and other simple covers that do not require inspection of the property or examination of contracts and other documents, are now available on the websites of most non-life insurance companies. Those covers that require face-to-face meetings with the insured, and their intermediaries can be transacted virtually. The exchange of documents can be done through email and couriers. Hello, Lalamove and Grab! There is no more reason for one to find it difficult to get or renew his insurance covers. Some good news first! Recently, the Office of the Insurance Commissioner released a memorandum circular to all non-life insurance companies to increase the benefits of the Compulsory Motor Insurance Coverage Limit from P100,000 to P200,000 without increasing the premiums to be paid by the vehicle owner. The abovementioned directive from the insurance commissioner shows that both the regulator and the insurance companies have constantly been looking for ways to make insurance coverage accessible and affordable. My colleague, Michael Rellosa, executive director of the Philippine Insurers and Reinsurers Association (PIRA), wrote in his column early this month that the insurance industry is now in the process of reviewing the pricing or the rates to be charged for fire insurance with the intention to make it affordable for the insurance buyers. However, the rates should also be acceptable to our reinsurers, who are our partners in the business. Since the reinsurers will share the risk, they have to quote the price, which will enable them to respond to our claims in the event that a loss occurs. The process of pricing insurance or determining the correct rates is a long one that involves referral to historical data and experience of the insurance companies. And the study has to conform with present practices and events. The insuring public who are now on their way to take their Easter break is assured that your insurance company is always at your service. Enjoy the holidays! Happy Easter to everyone, especially our beloved clients! Source: manilatimes.net

PIRA met with Mr. Andrew Harris, Oneglobal Broking Singapore Pte Ltd. and Mr. Paul Daly, Floodbase, to discuss the many posibilities of Parametric Insurance.

PIRA as a supporting organization to the 19th Asia Healthcare and Health Insurance Conference organized by the Asia Insurance Review (AIR) & Middle East Insurance Review (MEIR) is inviting member-companies to attend the said conference, with the following details. WHAT : 19th Asia Healthcare and Health Insurance Conference THEME : “Navigating the Asian Healthcare and Health Insurance Ecosystem to be Future Ready” WHEN : 24th – 25th April 2024 WHERE : Parkroyal Collection Marina Bay, Singapore PIRA member-companies will enjoy a 20% discount off the applicable registration fee and send the duly accomplished PIRA Registration Form through email at: loga@asiainsurancereview.com Attached here is the conference brochure for your reference. For more information, you may check the AIR/MEIR website: https://www.asiainsurancereview.com/Events/Home/Asia/healthcare2024

By Herminia S. Jacinto In a few months, we will be welcoming thousands of graduates from our universities and other educational institutions. Some will continue to earn master's and different higher degrees. Others will perhaps become businessmen and businesswomen, working for themselves or their families. But the majority will join our employee force. Are there enough jobs for them? Are these the jobs that are sought for by these new graduates? I joined some HR practitioners in observing several job fairs, and we noticed that the applicants chose banks and large companies like PLDT, San Miguel Corp., Globe, Smart and similar companies. Very few go to the booths of the insurance companies, and if they do, it is only to ask a few questions. This used to bother us a lot since we were already employed by insurance companies and were quite happy with our jobs! Why are these graduates not interested in joining our companies? Maybe the insurance industry is not promoting itself well to attract new graduates to join their companies. Maybe they are also affected by some negative news about insurance companies not paying claims or getting involved with some anomalies. But there are just so many positive things to be proud of by being part of this industry. They should be made aware of the role of the insurance industry in protecting the lives and properties of our country and people. They should appreciate that the insurance industry's contribution to our economy and nation-building through its investments in government securities, which funds are used for infrastructure-building. The graduates should realize that this is one industry where various specializations have positions befitting them, whatever courses they finish. We need lawyers, accountants, actuaries, economists, engineers, doctors and nurses! One need not know insurance when he joins the company. He will be trained in the basics of insurance and will undergo more training as he matures in the company. Many insurance companies have their own training departments and maintain a pool of trainers who continuously provide in-house training for their employees and agents or producers. Training in the insurance industry is not limited to local training institutions. There are many opportunities to be sent to overseas training or upon the invitation of foreign companies that do business with them. To provide training for insurance industry practitioners like employees and agents and the insuring public, the Asian Institute of Insurance (AII) was founded on Aug. 7, 1974, at the initiative of the former Insurance commissioner Gregoria Cruz Arnaldo. In 1980, the name of AII was changed to the Insurance Institute for Asia and the Pacific (IIAP). The IIAP provides training on technical insurance, soft skills and management subjects, and many more topics related to the insurance industry. To encourage and recruit new graduates into the insurance industry, the IIAP conducts an annual search of outstanding college graduates to participate in the Select Universities Insurance Training Scholarship Program or Suits. The Suits program aims to train up to 50 graduating students in insurance and management for free. During a two-month period, the trainees undergo a set of courses at IIAP. They are then referred to participating insurance companies for possible hiring. Insurance companies are now devoting a lot of resources to upskill their employee force. The pandemic changed the working style of the employees and made them choose other ways of earning money. The "work from home" facility, which was resorted to during the lockdowns, has become attractive to many employees, especially working mothers. They have quit their 8 to 5 jobs, which resulted in many vacancies in the insurance companies. There are jobs waiting for the new graduates. They should consider a career in insurance and join the employee force or become insurance and financial advisers. There are a lot of opportunities to meet other people outside the organization, which will develop their communication and relationship skills. So, dear 2024 graduates, come and join the "Feel Good" industry, the insurance industry. Source: manilatimes.net

FALIA paid a visit today, March 21, 2024 to discuss developments in the non-life sector and topics that may be included in the East Asian Insurance Congress (EAIC) which will be held this year in Hong Kong and in Tokyo in 2026. FALIA also serves as the Secretariat for the conference. Left to Right : Mitch Rellosa PIRA ED, EAIC President; Ryoichi Maemura Senior Consultant Public Interest Program Department, FALIA; Akira Takahashi Director General Affairs Department, FALIA; Masayuki Tanaka Managing Director, FALIA and Allan Santos CEO, NatRe and EAIC Immediate Past President.

The Philippine Insurance Commission (IC) has issued a circular, mandating insurance and reinsurance companies to adopt Philippine Financial Reporting Standard 17 (PFRS17) on insurance contracts, which is aligned with IFRS17. PFRS17 is to be adopted with effect from 1 January 2025, said IC. Insurance companies have already been given the option to adopt PFRS with effect from 1 January 2023. IC's circular specifies reporting obligations for insurance and reinsurance companies, including the submission of details on premiums due and uncollected, amounts recoverable from reinsurers and funds held by or for reinsurers. Life insurance companies must also report on policy loans and segregated fund assets and liabilities. IC added that it will conduct a quantitative impact assessment (QIA) using the current and PFRS17 financial reports. The QIA aims to assess the potential impact of PFRS17 implementation on the financial condition and position of insurance companies. Source: asiainsurancereview.com

By Michael F. Rellosa Insurance premium rates, what they are, how they are derived, and what their importance is are subjects very few people truly understand. Most see them only as the price one has to pay when one gets one's property, one's health or one's life insured. Yes, that may be correct, but what a premium signifies goes way deeper than that and, more importantly, the "balance" between adequate rates (one that ensures the rate charged is appropriate to cover the risk and ensure claims are paid) and affordability (where rates remain fair and reasonable to the insured) are maintained. People probably wonder what companies do with the premiums collected. They use the premiums they collect to ensure that they have enough liquid assets to be able to provide financial compensation to policyholders in the event of a claim. If the amount of money they secure exceeds what they pay in claims costs and operational expenses, the difference is considered their profit. This is also why insurers have a fiduciary duty, much like banks, as the amount they collect is not yet theirs and belongs to the insuring public until after the life of the policy, which in non-life insurance is usually one year. Insurance premium is defined as the amount of money an individual or business pays for an insurance policy (rate X the sum insured). The rate given is determined by a variety of factors, depending on the class of business. Let us take fire insurance on a house as an example. The underwriting factor to be considered under the fire class of business is the construction of the building. Timber structures are more vulnerable to fire and, therefore, carry a higher rate as compared to buildings made wholly of concrete. Another factor to be considered is the location. Is the building in a congested area where fire trucks could not penetrate, or is it a wide street easily accessed by the fire services? Still, another factor is its exposure. Is the building next to a gasoline station? Is it located on its own (detached from other buildings)? You guessed right; a building adjacent to a gas station would obviously carry a higher rate as it is next to a gas station, which has a higher chance of catching fire. Still another factor is the occupancy. A factory building where paints or volatile materials are manufactured carries a higher rate than a building occupied only as a residence. Finally, insurers determine the presence of firefighting or loss-mitigating equipment. Buildings peppered with fire extinguishers as well as smoke alarms and a sprinkler system will definitely carry a lower rate as compared to a comparable building with little to no firefighting equipment. There are other considerations that may affect the rate, such as its loss history, good housekeeping and maintenance, among others, but the underlier is the building's propensity to catch fire or, on the opposite end, its safety. People who own or reside in safer structures get charged lower rates than people who live in run-down, ill-maintained buildings located in congested areas. The risk rate (discussed above) is not the only component of the premiums to be paid. In addition to the risk rate, you have the taxes imposed by the government, currently around 27.5 percent of the total premium, and then usually the companies' general and administrative expenses (GAE) and a reasonable margin of profit are factored in. This is where the differences in premiums lie. More efficiently run companies have lower GAEs; companies with sound underwriting practices have lower loss ratios and can adjust their premium rates accordingly. This happens in an ideal world unhampered by unbridled competition. In an effort to sort out the Gordian knot currently besetting the industry, it has embarked on a quest first to find out what the true cost of risk currently is and to pass this through the actuarial crucible, taking into consideration premiums and losses or claims, and ultimately coming up with a rate reflective of the risks involved but nevertheless is fair and affordable for the insuring public. This is a major initiative of the industry through its association, PIRA, and will take about a year or so to complete. Once done, it will redound to the benefit of the industry but, more importantly, to the insuring public, as they can rest assured that when a claim is made, there are sufficient funds to indemnify all that need to be indemnified. Source: manilatimes.net