PIRA your association is an active member of ARISE Philippines.

PIRA your association is an active member of ARISE Philippines.

We are inviting you to witness the upcoming Knowledge Sharing Session between ARISE Japan and ARISE-Philippines with topic centered on Priority Area 3: Insurance, schedule on July 22, 2022. Each network will discuss best practices attributed to Disaster Risk Reduction in their respective local insurance industry. Philippines will be represented by Mr. Michael Rellosa, the Executive Director of Philippine Insurance and Re-Insurance Association and Priority Area lead on Insurance. This session will provide everyone with insights on what initiatives are being undertaken by PIRA and MS&AD Insurance Group Holdings, Inc. to assist the business community address the continuing threats of climate change and other forms of risk.

We hope your year is off to a good start. We would like to share with you some updates and offer a look ahead to some big upcoming activities. Updates: India assumed the G20 Presidency on 1 December 2022 from Indonesia and will convene the G20 Leaders' Summit for the first time in the country in 2023. Under India’s Presidency, a new working group on Disaster Risk Reduction has been established. SRSG Mami Mizutori issued a statement welcoming its creation and committing UNDRR to support it. SRSG Mami Mizutori published an opinion piece to introduce UNDRR’s campaign of ‘Zero Climate Disasters’ to the general public. This is a campaign that aims to build support for increased efforts to prevent hazards from becoming disasters through complementary actions. To highlight “The invisible toll of disasters,” UNDRR launched an interactive feature showcasing the cascading impacts of disasters and the hidden costs of slow-onset and small-scale events. If you ever need to explain what UNDRR is or what we do, we encourage you to make use of our new introductory 1-minute video which explains how we are “a small organization with a big mandate” (Twitter, LinkedIn, Youtube). By the end of 2022, we have seen steady growth in search engine queries on ‘disaster risk reduction,’ with a big uptick starting in 2020. We believe this is the combined result of global crises and the growing realization that DRR holds many of the solutions for achieving sustainable and resilient development. Looking ahead: The VIII Regional Platform for Disaster Risk Reduction in the Americas and the Caribbean will be held in Punta del Este, Uruguay, from February 28 to March 2, 2023. Those in the region who wish to participate are advised to submit their registration applications by 26 January. At COP27, the UN Secretary-General launched the Executive Action Plan for the Early Warnings for All Initiative and asked that the World Meteorological Organization and UNDRR co-lead an Advisory Board to ensure its effective implementation. Building on this, UNDRR will be organizing with partners a series of regional launches to raise awareness around the need to implement the plan by 2027. The first regional event will be focused on the Caribbean and will be held on 6 February in Barbados. 2023 will mark the midterm point for many international frameworks, including the Sendai Framework for Disaster Risk Reduction, the Water Action Decade, and the Sustainable Development Goals. The findings of the Sendai Framework’s Midterm Review will be presented at a high-level meeting of the UN General Assembly in New York on 18 and 19 May 2023. We encourage member states to ensure the highest levels of representation at the meeting. A special edition of the Global Assessment Report (GAR) is being developed for publication around July 2023. It will be titled “Risk-informing the Sustainable Development Goals: Metrics and measures to build resilience in a changing climate.” Throughout the year, UNDRR will continue to organize tsunami evacuation walks in different countries as part of our ongoing #GetToHighGround campaign. These walks aim to help communities build their preparedness for early action against the threat of tsunamis. Thank you for your continued partnership and we wish you all a happy and resilient year.

S&P Global Ratings says that for global reinsurance, it expects the hard market in short-tail lines will continue throughout 2023. The global credit rating agency said in a report released last week, “It appears that the hard market is here, particularly in the short tail lines (property and property catastrophe lines). It's not just significant rate increases that were in favour for reinsurers, but also terms and conditions, coverages, and limits. It seems that the global reinsurers have run out of patience after trying to catch up with the increasing loss cost trends over the past several years, resulting in multidecade high rate increases in the property catastrophe market during the January renewals. At the same time, during the January renewals, cedents' demand was up, but reinsurers were disciplined, focused on exposure management, and have taken a somewhat uniform approach to pricing actions, rather than a regional one as was the case in past years. S&P maintains its negative view on the global reinsurance sector, but believes the tipping point is coming for a more stable sector view if reinsurers maintain discipline and demonstrate the ability to sustainably earn their cost of capital. Casualty reinsurance pricing remains firm, benefiting from compounded price increases over the past few years, though rate increases have moderated in the US. Despite favourable reinsurance pricing, investors remain on the sidelines except for catastrophe bonds. Source: asiainsurancereview.com

1. Nat CAT insured losses reach US$11bn in the region in 2022 Preliminary data totals across Asia Pacific showed an insured loss for 2022 from Nat CAT events at $11bn, according to Gallagher Re. Globally, total insured losses are estimated at $140bn, of which $125bn are covered by private insurers and $15bn by public insurance entities (example: US National Flood Insurance Program), the global reinsurance broker says n the “Gallagher Re Natural Catastrophe Report of 2022” released yesterday. The report notes that 2022 became the fifth year since 2017 for total insured losses to cross the $100bn threshold. The insured loss total for Asia Pacific in 2022 is consistent with those seen in 2021 ($11bn) and 2020 ($14bn), Gallagher Re says. Lower industry losses in the last three years (2020–2022) followed a decade where the region was marked by significant and market-changing events such as the Thailand floods (2011), Tohoku earthquake and tsunami (2011), New Zealand earthquakes (2010/2011), Typhoon Jebi (2018), and the Australian bushfire season of 2019/2020. Much of the market commentary has focused on the effects of secondary perils and the ongoing need to further improve natural catastrophe modelling in the region, along with more proactive risk mitigation and assessment methods. Major Nat CATs in 2022 in APAC The pronounced insurance gap in particular countries also garnered much attention again last year—not least in Pakistan, where historic flooding led to an estimated $15bn in direct economic damage, but the insured outcome was negligible due to very limited insurance take-up. Drought was evident in various areas of Asia: China’s Meteorological Administration (CMA) noted the hottest summer on record dating to 1961, with 265 weather stations setting all-time heat records in August alone. In addition, the Yangtze River, the longest river in Asia and the third-longest globally, reached its lowest summer/peak monsoon season water height in 150 years of record-keeping. India’s Meteorological Department also noted that the country had experienced its hottest March, third-hottest April and second-hottest December in 122 years. A relatively quiet Western North Pacific Typhoon Season saw manageable damage reports, with the exception of Nanmadol and Talas in Japan, Hinnamnor in South Korea and Super Typhoon Noru in the Philippines. Overall activity in the basin was slightly below average for much of the year, including the number of landfalling events in Japan. Although Nanmadol brought strong winds and heavy rainfall, resulting in some flooding and landslides, its impact was manageable, largely because the storm moved over an area of lower-value asset concentration compared with typhoons in 2018 (Trami, Jebi) and 2019 (Faxai, Hagibis). Claims data as of 30 November 2022 from the General Insurance Association of Japan put the combined insured loss from Nanmadol and the smaller Typhoon Talas, which also hit Japan in September, at $935m. Further loss growth was anticipated with more claims filed and processed. 2. Hesitant capital remains sidelined amid property CAT losses and higher inflation The ongoing gap between return-on-equity ratios and the overall cost of capital is one of the key drivers for higher reinsurance prices going forward, according to a new AM Best report capturing the views of panelists from a recent reinsurance industry briefing. The Best’s Market Segment Report, “Hesitant Capital Had Looming Role at 1 January Reinsurance Renewals,” is based on a briefing last week in which a panel of AM Best analysts and industry executives discussed pricing pressures around the 1 January 2023 reinsurance renewal season. Persistently high levels of losses and volatility from small and medium-sized natural catastrophes, coupled with rising inflation and geopolitical concerns, have made property catastrophe exposures a less favourable play for reinsurers. By AM Best’s estimates, the reinsurance segment has been generating return-on-equity ratios of approximately 4-5%, in a market where the cost of capital is at least twice that. That cost of capital is due to increase even further, according to one of the panellists, Mr Carlos Wong-Fupuy, senior director, AM Best. “Despite improving pricing trends and tighter terms and conditions, new capital is taking a very cautious approach,” Mr. Wong-Fupuy said. “While the market remains well capitalized, it’s important to note how capital is being deployed and that significant amounts remain on the sidelines.” Mr. Wong-Fupuy was joined on the panel by Somers Re CEO Liz Cunningham and Mr. Aditya Dutt, president of Aeolus Capital Management, a Bermuda-domiciled specialist manager of reinsurance risk. Ms. Cunningham said property writers experienced the heaviest hit at 1 January renewals, with catastrophe-exposed lines up 50-100% generally. Mr Dutt said some factors influencing the capital inflow are beyond the sector’s control, such as the rapid interest rate changes and the estimated 20% drop-off in equity markets, all within the past 12 months alone. He cited the difference in economic conditions relative to the past 30 years coupled with the increased incidence of large catastrophe events. Additional topics of discussion during the briefing included the future role of insurance-linked securities in underwriting property catastrophe exposures, the impact of economic instability on market conditions and whether reinsurance pricing and results have stabilized enough to persuade new investors and capital to enter the market. AM Best maintains a stable outlook on the global reinsurance segment. Source: asiainsurancereview.com