The International Association of Insurance Supervisors (IAIS) says that it will publish a report by the end of 2023 which analyses the various types of initiatives undertaken by insurance supervisors to address natural catastrophe protection gaps. The report will draw from examples and insights from IAIS members, the insurance industry, international organizations and other stakeholders to distill the key elements of current good practices. This work can contribute to discussions at other international fora, such as the G7. Insurance supervisors have a mandate to protect policyholders, promote the maintenance of fair, safe and stable insurance markets and contribute to financial stability, says the IAIS. Within the various mandates, supervisors can play an essential role in supporting disaster risk assessment and risk management practices. Examples of initiatives underway in IAIS member jurisdictions include: • Supporting availability of risk analytics and data to assess disaster risks and insurance protection gaps; • Providing incentives or implementing regulation to encourage risk prevention measures and actions to improve financial literacy and risk awareness; and • Contributing to the design and/or implementation of public-private initiatives aimed at addressing natural catastrophe insurance protection gaps. Support for actions by regulators to deal with protection gaps The IAIS says it is committed to further supporting insurance supervisors’ actions to address protection gaps. The IAIS will facilitate information exchange at the global level and seek opportunities for collaboration with partners. In 2023, the IAIS will engage with its global membership and Public stakeholders on this important topic, including at its milestone events. To address this critical challenge, in developing options for future work, the IAIS will seek opportunities to engage with existing initiatives like the Global Shield against Climate Risks and collaborate with other international partners, such as the Access to Insurance Initiative (A2ii), Insurance Development Forum, Organization for Economic Cooperation and Development and World Bank with expertise in protection gaps and disaster risk financing. Source: asiainsurancereview.com

The IRDAI has asked insurance companies to set out social media guidelines for their employees to ensure that no unverified or confidential information relating to the organization is disseminated to the public through these platforms. An organization's reputation is closely linked to the behaviour of its employees, the IRDAI says, adding "Social media should be used in a way that adds value to the organization's business". The Information and Cyber Security Guidelines 2023, issued by the IRDAI to all insurers last month, contain a specific section on “Acceptable usage of social media”—which states that employees should refrain from disseminating any unverified and confidential information on "any blogs/chat forums/discussion forums/Messenger sites/social networking sites", reported Press Trust of India. "Any information received, accessed or obtained by an employee, either in his/her official mail/personal mail/media forums or in any other manner, if proposed to be disseminated or shared in any media forum, should be forwarded to the organization's compliance team and corporate communications team for prior approval," the guidelines say. In addition, no critique or comment on an organization or its business should be made on personal websites or social networking platforms, says the section on guidelines for using social media by employees for personal purposes. Cyber Security Policy The organization's Information and Cyber Security Policy (ICSP) identifies responsibilities and establishes the goals for consistent and appropriate protection of the organization's critical data and information assets. Implementing this policy shall reduce the risk of accidental or intentional disclosure, modification, destruction, delay, or misuse of information assets, the IRDAI says. Information assets comprise data or information recorded in electronic, printed, written, facsimile or other systems and the 'system' itself. The guidelines apply to all insurers, including foreign reinsurance branches (FRBs) and insurance intermediaries regulated by the IRDAI. In 2017, the regulator issued guidelines on Information and Cyber Security for Insurers, which were later extended to all intermediaries in 2022. Considering the widespread adoption of digital technologies and the increase in cyber security incidents, the IRDAI has revised the guidelines to enable the insurance industry to strengthen its cyber defenses and a related governance mechanism to deal with emerging cyber threats. Source: asiainsurancereview.com

By Herminia S. Jacinto "Buhay, kabuhayan at kinabukasan ng bawat Pilipino ang nakataya sa hamon ng nagbabagong klima." THE quote is taken from the paper presented by Assistant Secretary Rommel Cuenca of the Climate Change Commission at the 16th Philippine Insurance Summit held last April 26, 2023 at the Dusit Thani Hotel. This summit was hosted by the Insurance Philippines, the Philippine insurance publication, and the Insurance Institute for Asia and the Pacific. The topic of climate change has become even more relevant and timely after a series of natural catastrophic events which occurred last year. The unusual weather conditions we are experiencing now are just one of the signs that the effect may be more serious than originally thought of. The summit was graced by the presence of our newly appointed Insurance commissioner, Reynaldo Regalado, and deputy commissioner Erickson Balmes. The keynote speaker was the one and only Dean Tony la Viña of the Manila Observatory and a popular TV personality. Various speakers and presenters both from government and the private sector described the various threats that our people and properties can be exposed to because of the worsening climate changes. Typhoons are super strong, flooding cover wider areas and take a long time to recede destroying plants and vegetation that are the source of income of the greater part of our population. There are many initiatives that have been undertaken by both the government and private sector to provide education and funding to places where these are needed most. My colleague in insurance has written extensively about Arise Philippines, the organization whose mission is aligned with the Sendai Framework Disaster and Risk Reduction. Risk management and disaster resilience in all sectors of society should be promoted in all sectors of society and this can be achieved through dissemination of the information by educational institutions. The Climate Change Commission, an agency under the Office of the President, is tasked with developing the country's strategies, positions and plans on climate change among relevant stakeholders by establishing and strengthening partnerships with important sectors of society. They are ready to guide the pertinent government agency/agencies and the communities in adopting the sustainable practices needed to mitigate severe climate change conditions. Dr. Renato Solidum, the head of the Department of Science and Technology (DoST), correctly said in his presentation that we should be resilient — "reduce various losses before the occurrence of the hazards and insure effective and efficient disaster response, rehabilitation and recovery programs" The insurance industry has programs and projects which provide protection and mitigate the risks even before they happen. Speakers from the global reinsurance players like the Munich Re and Swiss Re as well as the Howden Brokers and Milliman Consultants have designed solutions and products that can ensure protection just in case these events happen. Solutions like parametric insurance are now being introduced in the global market. The local insurance industry can do an intensive study on how this product can be an alternative to the traditional insurance solutions. A very interesting part of the Insurance Summit was the panel discussion on the role of each stakeholder in countering the effects of climate change in which various speakers/presenters participated, including veteran media practitioner Ted Torres and a representative from the agricultural sector, Mr. Michael Caballes of the Bukid Amara. We wish we had the whole afternoon to discuss the various issues and solutions presented by the participants. Listening to all the discussions during the summit clearly gave me the impression that we know what to do and how to do them with regard to the impact of climate change in our country. But the question begging to be asked is how do we put together these ideas. Who will cascade them to the communities, to the people who are the most affected by these harsh conditions? The Climate Change Commission? The DENR? The DILG? Source: manilatimes.net

MANILA, Philippines — The Land Transportation Office (LTO) will extend the registration validity of new motorcycles up to three years in a new policy seen to benefit drivers who use motorcycles for their livelihood. In a statement on Sunday, the LTO said its Memorandum Circular No. JMT-2023-2395, which will take effect on May 15, will benefit around 2 million drivers whose newly registered motorcycles have an engine displacement of 200cc and below. LTO Chief Assistant Secretary Jose Arturo Tugade said they decided to give a three-year validity of vehicle registration even for motorcycles with an engine displacement of 200cc and below, following studies conducted by the LTO. Under previous guidelines, only motorcycles with an engine displacement of 201cc and above were qualified for a three-year validity period upon their initial registration with the LTO based on Republic Act No. 4136, or the Land Transportation and Traffic Code, and RA 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018. This meant that motorcycles with an engine displacement of 200cc and below must register every year once the three-year validity period lapses. Divine Reyes, spokesperson for the LTO, explained that the new policy would relieve drivers of the expenses for yearly emission testing as mostly those with 200cc and below engines were being used as motorcycle taxis and for deliveries. “We do not see that there will be a problem with the roadworthiness of motorcycles with three-year registration because these are new vehicles,” Tugade said. Aside from extending the registration validity of new motorcycles, the LTO memorandum likewise stated that the motor vehicle user’s charge to be collected during the initial registration would also be adjusted to cover the corresponding registration validity period. Source: inquirer.net

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The cyber insurance market saw substantive changes in underwriting controls, including tighter terms and conditions, and stricter risk selection and underwriting standards in response to higher-than-expected ransomware losses in 2020, notes the International Association of Insurance Supervisors (IAIS). As a result, clients not reaching minimum cyber hygiene standards found it harder to secure coverage, says the IAIS in the 2023 special topic edition of its Global Insurance Market Report (GIMAR). These market dynamics reflect market hardening following an increase in ransomware claims in recent years. About 40% of all global cyber premiums flowed to the reinsurance market. This compares to 25% of non-life premiums ceded to reinsurers across the sample. This high level of ceded premiums is not unexpected for a new class, as new entrants seek to partner with a reinsurer to better understand the risks, diversify exposure, gain experience and collect data. While there was activity related to cyber risk transfer in the insurance-linked securities (ILS) market in 2021, volumes were low, and capital availability was limited. “Cyber risk has become an important area of focus for insurance supervisors as it poses not only an operational risk but also an underwriting one”, said Ms. Vicky Saporta, IAIS Executive Committee chair. The report shows that an expanding cyber attack surface, growing dependencies on technology, and a complex cyber threat landscape contributed to an increased demand for cyber insurance products, pushing written premiums to record levels in 2021 and improving profitability. Additionally, the analysis highlights the potential catastrophic dimension that cyber risk can have and how this can pose insurability issues. Despite this, the severity of claims related to large cyber events has been relatively low compared to those arising from natural disasters. Losses A considerable degree of uncertainty remains around cyber catastrophe risk and what a cyber tail event would look like – more so than for other perils. One loss estimate for a 1-in-250-year event affecting the US standalone affirmative market is in the region of $30bn. The largest cyber event to date was NotPetya in 2017, which resulted in an estimated $10bn in losses, of which $3bn has been covered by the insurance sector to date. To put this into context, an average Atlantic hurricane season has 14 named storms, seven hurricanes and three major hurricanes, causing, on average, $20.5bn in losses per event in the last 40 years. However, various reports indicate that cyber insurance only covered a small proportion of the potential economic loss resulting from cyber events. The cyber protection gap appears to be widening, with important differences across jurisdictions. Cyber security measures The report also finds that most insurers in the sample analyzed have implemented various cyber security measures, indicating a positive awareness and management of their own cyber risk. However, the effectiveness of their cyber security frameworks is difficult to evaluate due to data gaps and jurisdictional differences. The analysis shows that the global shortage of cyber security professionals compounds the cyber operational risks that insurers face. Financial stability In terms of systemic risk, the cyber underwriting activities of insurers in the sample were not assessed to pose a threat to financial stability. This is because the market was too small and tail losses arising from affirmative coverage would have been absorbed with the level of coverage being offered. However, there remain important data gaps to gauge the systemic risk posed by non-affirmative coverage. The IAIS is a global standard-setting body whose objectives are to promote effective and globally consistent supervision of the insurance industry to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders and to contribute to the maintenance of global financial stability. Its membership includes insurance supervisors from more than 200 jurisdictions. Read the Global Insurance Market Report (GIMAR) special topic edition on cyber risks in the insurance sector here. Source: asiainsurancereview.com

There is a 27.5% probability that another COVID like pandemic could occur in the next 10 years. A strong pandemic defence system, however, could reduce the 27.5% probability to 8%. Predictive health analytics company Airfinity’s new risk modelling also shows that had the original COVID-19 wild type been as transmissible as Omicron, more than 300,000 people would have died in the UK alone, nearly three times more than was the case. Airfinity said If effective vaccines are rolled out 100 days after the discovery of a new pathogen, the likelihood of a pandemic as deadly as COVID-19 in the next decade drops from 27.5% to 8.1%. This new risk-assessment outlines the likelihood of future pandemics under varying degrees of severity. It shows that in a worst case scenario, an avian ‘flu type mutation that transmits from human to human could kill as many as 15.000 in a single day in the UK. In recent times, there has been an increase in the frequency of virus emergence. Climate change, the rise in international travel, a growing global population and the increasing threat posed by zoonotic diseases are some of the main factors contributing to the increase in high risk outbreak incidences. Fast vaccine roll-out, strong delivery infrastructures and other pandemic preparedness strategies are needed to significantly reduce this. The new modelling shows that the risk of a pandemic as deadly as COVID-19 in the next ten years is 71% less with these countermeasures in place. Many high-risk pathogens including zika, MERS and Marburg virus, however, don’t have approved vaccines or treatments and existing surveillance policies are unlikely to detect a new pandemic before it is too late. This highlights the urgent need for new and data-driven pandemic preparedness measures. Airfinity CEO and co-founder Rasmus Bech Hansen said, “A robust pandemic preparedness system is the world’s insurance against a COVID-19 like pandemic or something even worse. We have calculated the real risks, but also the potential risk reduction that can be achieved. This can help inform decision makers to the level of ongoing pre-emptive investment in the space to keep people safe.” Source: asiainsurancereview.com

Insurers should put their risk expertise and underwriting skills to better use and in ways that can help protect the environment according to a new report by Climate Wise. The report says that insurers should do more at the underwriting stage to help protect the environment and not just after natural disasters. Launching a roadmap for insurers, ClimateWise said nature-related risks are not currently assessed by insurers and reinsurers. It says the impact on nature must be taken into account when underwriting climate and nature-related risks. The value of nature needs to be integrated into underwriting to avoid irreparable damage to the natural world. The cost of not doing so is vast and understated,” the report said. It said insurers have a wider role to play. “The insurance industry is built on the ability to quantify risks. Moving towards integrating nature-related risks and impacts into insurance brokerage and underwriting can be seen as a ‘natural’ evolution for the industry. The insurance industry can expand its role in society to support risk management through proactive nature-positive measures to help contribute to the protection and restoration of nature – both in advance of and in response to a disaster or loss.” According to the report insurers are not proactively assessing nature-related risks because of lack of awareness and understanding, lack of data and skills, an insufficient policy environment and lack of buy-in from insurance c-suite decision-makers. The report urges insurers to: Develop more use cases and adapt present models in order to improve understanding and measurement of nature-related risks Create new approaches to modelling and understand asset ownership in order to innovate in asset protection Develop investment and insurance solutions, and prioritize major dependencies on nature to facilitate capital flows Engage constructively with policymakers to create an enabling regulatory framework; and Support customer and client education and engagement by incentivizing nature-positive behaviours. Source: asiainsurancereview.com

March 2023 was Earth's second-warmest March since global record-keeping began in 1850 according to the US National Oceanic and Atmospheric Administration (NOAA). It was 1.24 degree Celsius above the 20th-century average. NOAA’s National Centers for Environmental Information has reported that land areas had their second-warmest March on record in 2023, with global ocean temperatures the third-warmest. The National Aeronautics and Space Administration and the European Copernicus Climate Change Service also rated March 2023 as the second warmest March on record. The only warmer March in all three databases was in the year 2016, near the end of the record-strong 2014-16 El Niño event. Minor differences in the agencies’ rankings can result from the different ways they treat data-sparse regions such as the Arctic. According to NOAA, Asia had its second-warmest March; South America and Africa had their fourth-warmest March; Europe had its tenth-warmest March; Oceania had its 17th-warmest March; and North America had a warmer-than-average March that did not rank among the 20 warmest on record. NOAA’s latest global annual temperature rankings outlook said, “It is virtually certain that 2023 will be a top 10 year.” This outlook does not explicitly take into account the anticipated arrival of El Niño later this year, which would make record or near-record global warmth in 2023 and 2024 even more likely. Source: asiainsurancereview.com