By Michael F. Rellosa AFTER more than two years of being virtually locked down in their offices and homes, executives of the insurance industry are finally going out to hit the fairways for the Insurance Commissioner's Cup Golf Tournament at the south course of the Canlubang Golf and Country Club on Friday, July 29, 2022. This is a good thing, as more issues are resolved on the fairways than in board rooms, and in the insurance industry there is no dearth of issues that need to be ventilated and decisions arrived at. Hot issues include but are not limited to the industry's response to disaster risk reduction, the Philippine Catastrophe Insurance Facilities 1 and 2, the hopeful introduction of agriculture insurance into the portfolio mix, the continuing pandemic and how best to address it, IFRS 17, a P1.3 billion net worth requirement, nature- based solutions, ESG requirements, and other nascent topics that these executives should start to familiarize themselves with. This tourney is not only a welcome respite but more importantly, an opportune time for insurance honchos to exchange notes. This tournament is being organized by the Philippine Insurers and Reinsurers Association (PIRA), with the support of the Insurance Institute for Asia and the Pacific (IIAP) and the Philippine Insurers Club (PIC). It is, of course, sanctioned by no less than Insurance Commissioner Dennis B. Funa himself who will be the one awarding the prizes to the winners. Invitations have been sent to the deputy commissioners as well. Deputies Erickson Balmes, Bong Florendo and Randy Serrano hopefully will be able to make it as this will be an opportune time to thank them all for their valuable contributions to the industry. PIRA General Manager Roger Concepcion, who heads the organizing committee for this tournament, advised that close to 80 players have confirmed their participation so far. He noted that this tournament seeks to provide industry practitioners, clients, friends and acquaintances an avenue to network among themselves and the Insurance Commission in the spirit of cooperation, collaboration and friendly competition, hallmarks of the industry. He added that given the Covid-19 situation, the tournament will be strictly observing health and safety protocols as mandated by the IATF. The insurance industry is grateful to those who are sponsoring this undertaking. Major sponsors are Computer Professionals Inc., NTT Data, Philippine Accident Managers Inc., PRU Life UK and Merimen. Minor sponsors. meanwhile, are National Reinsurance Corp. of the Philippines, Pacific Cross, Travelers Insurance, Azentio, Cocogen Insurance, Alpha Insurance, and Lacson & Lacson Insurance Brokers, and Bethel General Insurance, Hole sponsors are BA Insight Adjusters, Prudential Guarantee, and Starr Insurance Companies, Malayan Insurance, MPioneer Insurance, Philippine Machinery Management Services Corp., Standard Insurance, Stradcom, and Swan Insurance Agency. A P50,000 hole-in-one prize is being sponsored by Cocogen. For those interested to be part of the tournament, please contact Greg — gbarrios@pirainc.com.ph, Joey — monteclaro@pirainc.com.ph, and Malou — mserrano@pirainc.com.ph, or call (02) 8811.46.29. The tournament can only accommodate a maximum of 100 players. Source: manilatimes.net

By Michael F. Rellosa SO, we all know that the Philippines is the preferred target of Pacific Ocean-born typhoons. On top of that, I am sure you have noticed or are noticing the increase in the number and ferocity of normal weather occurrences, said to be the result of climate change. Just the other day, there were video clips trending on social media of trees blowing away, vehicles pushed off course and wind-driven rain moving in all directions. On top of that, it showed the bottom tip of a tornado right smack in the middle of the San Lazaro district of Manila! This was not a named typhoon, this was merely your usual monsoon season, afternoon thunderstorm only this time on steroids. Scientists have been raising the alarm bells around the globe against our worsening weather, and I hope governments and the populace are listening. We, in the insurance industry, are in the business of risk and we better take note not only of the elevated amount of risk, but of measures we can take or adopt that may help mitigate the risk itself or the damage that may result from the occurrence of such risk. On Wednesday, July 6, 2022, groundbreaking research on how we insurers can improve our risk modeling and enhance the resilience of infrastructure to climate change by incorporating the economic value of coastal mangrove forests as natural storm barriers will be unveiled. For the environmental activists among us, this is a win-win as the study shows that mangroves are not just a powerful source of natural carbon capture and storage (one of if not the best carbon sinks), but they can save an estimated $65 billion per year in avoided losses from floods and storms and 50 times more cost-effective at resisting storms and storm surges than building concrete sea walls. In this report, we will see that in some coastal cities, mangroves can reduce up to 100 percent of the physical damage from storms and floods. The case studies show that "mangroves are particularly effective in their ability to absorb the impact of waves and storm surges: 100-meter-wide mangrove forests can reduce the height of waves by up to 70 percent, while 500-meter-wide forests can reduce it by up to 100 percent." It is also an accepted fact that mangroves are also valuable as fertile breeding grounds for all kinds of sea life, commercial types of fish included. The Philippines is notorious for its air quality, and mangroves are the best air purifiers and source of oxygen. Among the countries in the world, the Philippines is blessed with the most mangroves, but because of ignorance and neglect, mangrove deforestation is also at its peak. If not addressed, we may lose all our mangroves within the next decade or so. Earth Security, a think tank and sustainable finance company, in partnership with the Philippine Insurers and Reinsurers Association (PIRA), is collaborating to help make this study a reality. Alejandro Litovsky, the chief executive officer and founder of Earth Security as well as the study's lead author, said: "Financial and corporate decision-makers, without an understanding of nature-based solutions are missing out on the opportunity to develop the companies of the future; inspire clients and employees; build resilience to climate change, restore biodiversity and support and protect local communities." As for me, and I am sure of the entire PIRA membership, we recognize the strategic potential for our industry to factor coastal ecosystems into underwriting processes. PIRA supports Earth Security's work and innovative insights into the risk mitigation qualities of natural assets, helping build the resilience of the Philippines and the insurance sector to catastrophic weather events. In the Philippines, as well as the world at large, industry practitioners have not yet begun to recognize the value of such natural assets, and these are not reflected in any existing CAT models used to price insurance policies. On top of this, these models are based on past data and do not specify climate change scenarios making it a challenge for modelers and the insurance and reinsurance clients they serve. As the industry squares up to the task of overhauling tired old models to address global warming, climate change and the risks that it exacerbates, the report offers a simple methodology for the industry to update itself, see the value of working with nature and turning this into an opportunity. Source: manilatimes.net

By Michael F. Rellosa A WORLD Bank report pictures the Philippine insurance industry as small but growing, where insurance penetration remains below that of its Asean neighbors as well as of countries with similar per capita incomes. Despite that, it accepts that the Insurance Commission (IC), as the industry's regulator, has done a decent job at improving regulation and supervision. The World Bank, however, suggests that the IC overhaul its existing inspection methods, data collection, reporting infrastructure (IT), analytical tools and on-site inspection manuals. Thus, the Own Risk and Solvency Assessment (ORSA) process and its standards have been prescribed to bring the country's IC and its regulated entities on par with the rest of the world. On the private sector side, there are developments that have been globally initiated such as the introduction of the IFRS17, a new international financial reporting standard for insurance contract accounting set to be adopted by 2023 in other jurisdictions and 2025 in the Philippines. IFRS17 entails a change in basic assumptions in our accounting principles and the new discipline would have to be learned and instilled by the current staff and grafted onto our existing processes. The problem is that it would entail a major overhaul in both the way of reporting, appreciating the company's status, benchmarking, budgeting and setting of targets. It involves changing the chart of accounts as well as the system on which all these run. The bottom line is that it will entail costs for the insurer from impact analysis to capacity building, and the migration to a new system. Costs no one needs in the current market. Both initiatives on their own are acceptable and admittedly good for all stakeholders overall. However, the timing of the implementation is questionable. The insurance industry struggles to navigate perilous waters generously peppered with difficulties and challenges such as climate change and the attendant aberrant weather that it causes; wave after wave of the Covid-19 pandemic and the appearance of yet more novel viruses in the distance; the economic ripples brought about by geopolitical issues, the saber rattling and the unease that they cause, to mention a few. ORSA and IFRS17, which are imposed to instill even more discipline and transparency on the part of the regulated, in all candor, puts the industry's existence at risk because of the difficulties it faces as it struggles to comply. ORSA and IFRS17 can then be christened the industry's Scylla and Charybdis. The industry has been long preparing itself for IFRS17, now PFRS17, and has surrendered itself to the inevitability of its advent. However, ORSA has been a mere whisper that is now turning into a clarion call for change. Why now, amid all these changes and the dire straits we have to currently navigate? We have not yet emerged from the pandemic, inflation is high and still increasing, the peso is devaluing fast and mindful of our reinsurance costs, the premiums of which are in foreign currency, worries us no end. The economy is not promising, unemployment is increasing, and all are aware that insurance protection is the least of the priorities of a population that may be increasingly cash-strapped. Factor in the increasing ferocity of weather disturbances brought about by climate change and we end up with a perfect storm of uncertainty and an existential threat. Questions are beginning to emerge from the beleaguered industry. Can we not plan these changes and work out a more realistic and doable timeline? Can we not first see how these initiatives affect one another, and address the duplications and redundancies? Can we not assess the current reportorial requirements which are required by law and recognize that they are outdated and are better replaced by these new frameworks. Many more questions are sure to arise as we get to know more about these new frameworks. We remain hopeful though that through the open communication lines and the spirit of collaboration that the regulator has instilled in all of us, we can find the best way forward for all. Source: manilatimes.net

By Michael F. Rellosa THE last trimester of the year is a busy one for those of us who are working to tech up the insurance industry. Unlike the banks and other financial institutions which had a head start, we in the insurance community are playing catch-up. Come Oct. 17, 2022, the Department of Trade and Industry, in collaboration with the Monetary Authority of Singapore, will be launching the Philippine Fintech Festival back to back with the SME Financial Empowerment Program. The Philippine Fintech Festival kickstarts the Asean-wide Fintech Month, followed by similar activities in Cambodia (October 24) and Thailand (October 27), culminating with the Annual Singapore Fintech Festival in November. With the moves to put Asean economic integration front and center after being placed in the back burner due to the pandemic and other geopolitical events, there is a renewed impetus to bring it to the desired conclusion (i.e., a free flow of people, goods and services across the Asean). With technology as an identified enabler, this dream is closer to reality. One of the main proponents of this integration is the Asean Insurance Council, which will be meeting in December where technology as an enabler and a driver for the sector will be discussed. The AIC recognizes that the region has a combined population of 600 million, and an economy worth at least $3 trillion making it the fourth largest economy in the world. The Philippine Insurers and Reinsurers Association (PIRA), a member of the AIC and an active participant in the insuretech scene in the Philippines, shares the vision of teching up the industry at the soonest possible time. As innovative technologies make themselves available, PIRA is at the forefront of introducing them to its members and through its IT committee familiarizes itself and vets these recent technologies for adoption of its members. PIRA has identified major areas of operations which have been positively impacted by new technology. Communications and data storage. Instant messaging apps, as well as the ability to access voluminous files and data in a safe environment, allowed our members to operate efficiently throughout the pandemic and its attendant lockdowns. Services to the insuring public continued with minimal disruptions. Electronic money transfer. Another area that developed at warp speed in part because of the pandemic. It gave both insurers and the public multiple ways of paying and remitting sums electronically with convenience. Underwriting and claims. New ways of risk assessment are fast developing again due to technology. Motor vehicles can now be rated not only based on use, age and where they are parked. Now they can be rated as to how they are operated and the area in which they operate. The same technology akin to an aircraft black box records important data such as velocity, time of impact, GPS- assisted location identification, just to name a few. This aids the claims process tremendously and shortens the period in which claims may be settled. This also makes pay-as-you-use insurance available, a welcome development for car users who are not on the road 24/7. For other classes of business, drone or even satellite technology helps with the determination of the cause, extent and quantum of the claim, a boon for both indemnity and parametric-based types of coverage. Training, meetings, conventions and forums. Living in an archipelagic country, one is hard pressed to visit and be in contact with the various stakeholders across the country. In a business where intermediaries are necessary, provincial intermediaries must be visited and consulted as well as kept abreast of new products, new methodologies, industry and corporate developments. Technology now allows us to communicate real-time, albeit virtually. Distribution channels. The pandemic has hastened the use of and acceptance of purchasing goods and services online. The proliferation of comparative sites helps the insuring public in picking out the insurance company with the best fit in terms of coverage and price. It likewise proved itself to be a great platform for educating the public on the finer attributes of a certain product. Chatbots can answer the most basic and frequent questions, thereby reducing, if not eliminating, the need for a human to be at the other end. There are yet numerous other applications that one can find to help simplify and increase the efficiencies of the insurance cycle, which we are just starting to realize and discover. What we do know for certain is that technology if harnessed correctly will revolutionize how we serve the insuring public. Source: manilatimes.net

By Michael F. Rellosa I AND many others have written about how insurance is a tool for sustainability and survival, as it allows one to pick up the pieces and carry on after a disaster or some other insured event. What I want to bring to the fore is what the government can do to make it easier for the insured to afford and avail themselves of insurance. In a recent article in another newspaper, the former SSS president and insurance commissioner lawyer Manny Dooc underscored the need for the country to rationalize its taxes especially for micro-insurance. This is in line with the government's aim to protect the poor and vulnerable groups. The current tax structure however puts a damper on this, as it effectively makes even micro-insurance unaffordable for those who really need it. This move also supports what the insurance industry has been trying to communicate for the past five administrations either through position papers and during public hearings at both houses of Congress — the fact that insurance in the Philippines for all classes of insurance, micro and traditional, are one of the highest in the world and is a major barrier for its development as a tool for sustainability and survival. With the rationalization of these taxes, Filipinos will be better equipped to face the future fraught with events that are exacerbated by climate change. Mind you, the Philippines is now considered the most vulnerable to catastrophic events given its location within the Pacific Ring of Fire, and the bowling alley of typhoons and other weather disturbances. The industry welcomes Dooc's initiative and will collaborate with him to help make this a reality. On a related note, the industry and the country celebrate Insurance Consciousness Week from Sunday, Oct. 16, to Friday, Oct. 21, 2022, with the theme "Insurance: Navigating the Road to the New Normal." At the start, the industry threw its support to the Philippine Crusade for the Defense of Civilization as it spearheaded a Rosary in the Public Square through its Philippines Needs Fatima Campaign at a rosary rally held yesterday at the Washington Sycip Park in Makati. This was followed by the actual launch at a Mass and gathering of industry executives to be held at the Insurance Institute for Asia and the Pacific, also in Makati. Coinciding with the ICW, is the Philippine Fintech Festival (Oct. 17-21, 2022) with which both the Life and General Insurance Associations (PLIA and PIRA) are heavily involved. Recognizing the need to tech up the industry, both associations together with Digital Pilipinas, have agreed to explore the setting up of an Insuretech Association to hasten the journey. Another noteworthy activity, this time in collaboration with Arise Philippines, is a webinar titled "The Importance of Insurance vis-à-vis Climate Change." This webinar scheduled for October 20 at 2 p.m. is meant for MSMEs to allow them to understand how insurance can assist them post-calamity. Another webinar organized by the PIC on "Insurance as a Response to Cybersecurity" is slated for Friday, October 21. Other events are being hatched by the organizers and we invite you to check out the web and Facebook pages of the Philippine Insurer's Club (PIC); the Insurance Institute for Asia and the Pacific (IIAP) and the Philippine Insurers and Reinsurers Association (PIRA) for more details and the actual registration links. This year's ICW celebrations are a collaboration between the three main associations of the industry as well as its partners. Source: manilatimes.net

By Michael F. Rellosa DESPITE the global focus on disaster, disaster risk and the attendant topics of disaster risk mitigation, response and management, the Philippines, which happens to rank as the country most prone to disaster and disaster risks per the latest study titled The "World Risk Index Report," lags far behind in activities needed to bring the topic to the awareness of the man on the street, which is crucial given the need for an "all of society" approach to address them. There are many areas of preparation that our country can take, and it is heartening to know that we have different agencies of the government as well as affected industries in the private sector that get support and guidance from international lending and developmental institutions hard at work to craft policies and solutions to effectively manage disaster risks. But what are these risks that we are highly vulnerable to and need to prepare for? These are what we call in the insurance industry as catastrophic perils such as earthquakes, typhoons and floods. These perils are a result of our being in the typhoon belt, as well as being within the Pacific "Ring of Fire," characterized by frequent seismic and volcanic activities. Just in August of this year, we experienced a 7.0 magnitude earthquake in Abra affecting over half a million people and causing 11 deaths, 609 injuries and P84 million in agricultural damage alone. This was followed by Super Typhoon "Karding" with 12 dead, 67 injured and over 1 million people affected. Just about a week ago, we had Severe Tropical Storm "Paeng," which caused even more havoc affecting the entire archipelago with reports as of November 6 showing 156 individuals dead from landslides and floods, 141 others injured and 37 people remaining missing. Damage to infrastructure is estimated at P4.17 billion, while for agriculture, the damage estimate currently stands at P113.51 million. The effects were so severe and far ranging that on Nov. 2, 2022, President Ferdinand Marcos Jr. declared a state of calamity over large swathes of the country. The damage has prompted the Department of Finance to estimate that the Philippines may incur as much as P1.5 trillion in losses from such calamities within the next five decades. The insurance industry has mobilized and is adopting measures to assure its sustainability and to strengthen its ability to be able to service claims in the aftermath of a catastrophic event. It has also taken steps to manage the risks that it takes on by minimizing the volatility of its portfolio and maximizing its retention via a pooling mechanism called the Philippine Catastrophe Insurance Facility to be launched in January 2023, a topic I have written on in an earlier column. One may ask, how then is the industry ensuring its sustainability given the expected losses it may incur as predicted by experts around the globe? To help understand the industry's moves, it is best to understand the characteristics of disaster risk: 1. It is forward looking. It estimates the likelihood of loss or damage over a given period. 2. It is dynamic. It can increase or decrease over time. 3. It is invisible. It comprises both the threat of rare high impact events as well as the more frequent though less expensive events. 4. It is unevenly distributed around the globe. These perils affect all areas of the planet, but there are certain countries such as ours that are more exposed and therefore more vulnerable. 5. It is emergent and complex. Managing such and evolving and complex risk will entail an approach that looks at the entire picture. The insurance industry with the guidance and scrutiny of its regulators, the Insurance Commission, and with the input and assistance of global experts is attempting to correct its own vulnerability by first reviewing current rates for catastrophic perils, which stand at 0.1.5 percent. These rates have not been reviewed and tested in three decades and everyone agrees that the risk scenario then is vastly more different than the risk scenario we currently find ourselves in. After analyzing claims data of the industry spanning several years and passing through various global models and benchmarking the same against global catastrophic peril rates, it was ascertained that the pure risk or technical rate should be in the vicinity of 0.4 percent. This was deemed by the industry as perhaps too high for the local market to absorb and a decision was made to correct the rates in increments, thus the new rate of an average of 0.2 percent will come into effect in January 2023. This is to ensure that the insurance mechanism where people who face a common peril contribute to a common fund, out of which those who suffer loss or damage from such peril are indemnified, and is kept working seamlessly for the greater good of the Filipino insuring public. Source: manilatimes.net

MANILA, Philippines — The Land Transportation Office (LTO) Monday announced the appointment of Jose Art “Jay Art” Tugade as the agency’s new chief. This was stated by Transport Secretary Jaime Bautista in a statement, confirming that President Ferdinand “Bongbong” Marcos Jr. named Tugade as the new chief of LTO replacing Teofilo Guadiz III. “I come here today to announce the appointment of Atty Jose Art ‘Jay Art’ Tugade as the new chief of the Land Transportation Office. While Atty. Tugade’s appointment was announced a few weeks ago, we have come to a conclusion that he is best suited for the very challenging job in the LTO,” said Bautista. Bautista explained that he deemed Tugade “better suited” to LTO — especially amid “the many problems and controversies being faced by the agency — discussing how they will better serve the Department of Transportation (DOTr). “We immediately asked the indulgence of the President and explained the gravity of the situation in the LTO and the importance of the work that has to be done as well as the willingness of Atty J Art to do it. In the end, the President understood the situation,” he said. According to Bautista, Guadiz will then take on the position of Asst. Secretary for the Road Sector of the DOTr. Jay Art is the youngest son of former Transportation Secretary Arthur Tugade who served under former president Rodrigo Duterte’s administration. It can also be recalled that Marcos recently appointed him as the acting general manager of the Manila International Airport Authority (MIAA). The DOTr, meanwhile, has yet to release information on who will replace him in the MIAA position. Source: inquirer.net

Like many of us, I’ve been watching the torrential rain and subsequent floods that have gripped Australia for months with growing concern. Already this year, floods in eastern Australia are expected to cause insured losses of USD 2.84 billion (AUD 3.99 billion), and the situation is still evolving. But I'm conscious this is not an isolated crisis. Markets from China to India and Malaysia have been hit hard by flooding over the past year. In fact, our recent sigma found that major flooding events accounted for about one-third of the USD 270 billion economic losses caused by natural catastrophes worldwide in 2021, just a quarter of the flood-related losses were covered by insurance. All told, flood affects more people around the world than any other peril. The APAC region has historically suffered the highest flood-related economic losses globally. But it remains severely under-protected against flood risk, especially in emerging economies. There were more than 20 severe floods in Asia last year, the highest number of any region. Yet over the last decade, only 7% of flood losses in the region were insured, versus 34% in Europe. This points to a troubling flood protection gap. But it is possible to build resilience against this rising threat. It will require policymakers and insurers to enhance the understanding of flood risk, and to reduce the toll on people and economies through better risk management that incorporates smart planning of land utilization, mitigation, adaptation and risk transfer. Floods: a rising threat in APAC Urbanization, economic growth, and changing precipitation patterns due to climate change are all contributing to the increased flood losses. Urban areas don’t absorb water as well as the natural environment, so as cities expand, they become more susceptible to flooding. Wealth accumulates with economic growth, and floods take a heavier economic toll. These factors are especially pronounced in APAC due to the region’s rapid urbanization and development. Fast-growing cities are often located on coastlines or near rivers that are increasingly prone to flooding. On top of that, development of flood infrastructures, such as sea walls, dams and levees, often lags the expansion of cities and is not keeping pace with the climate trend - as evidenced by recent floods in Australia. Much of Asia is also vulnerable to tropical cyclones, which can generate severe floods from both storm surges and as inland flooding following heavy rainfall. Swiss Re estimates that over the past 20 years, factoring in losses resulting from tropical cyclone-induced floods would add another 30% to global insured flood losses. All these factors combine to dramatically increase the loss potential from floods in APAC and demonstrate the urgent need for protective strategies. Reckoning with flood risk For insurers, monitoring flood risk presents multiple challenges. The public and industry focus is typically on large-scale, ‘primary perils’ such as tropical cyclones and earthquakes. Small and mid-sized events, including smaller storms producing hail and flooding, are considered ‘secondary perils,’ and the related losses often underreported, meaning they may not be accurately reflected in future modelling. Flood is also a complex peril to model. The influence and interplay of various factors such as ‘soil sealing,’ ageing infrastructure, and climate change create additional challenges compared to other natural catastrophes. Yet improving risk modelling is what we must do if the insurance industry is to expand protection and offer sustainable flood protection to communities. Current models rely heavily on historical events and loss data. But these are inadequate in the face of rapid urban and economic development in our region, and the growing threat of natural catastrophes due to climate change. Continued reliance on historical data will see the industry fall behind conditions on the ground, leading to unexpected losses and further widening of the protection gap. A path to close the flood protection gap Despite these difficulties, we firmly believe flood risk is and will remain insurable. The first step for re/insurers is to increase our understanding and awareness of this underestimated risk. I’ve been pleased to see the significant progress made in this respect, such as the evolution of sophisticated flood risk maps and the development of fully probabilistic catastrophe models. For example, the figure below compares the actual footprint of the flood in Kerala in October 2021 captured by remote sensing, with the Swiss Re Global Flood Zones for fluvial and pluvial risk. 82% of the entire flood footprint is captured in the Flood Zones, displaying their capabilities for risk selection and land-use decisions. Figure 1: Remote-sensed flood footprint (left), compared to Swiss Re Global Flood Zones (right), fluvial and pluvial, over a region affected by the October 2021 flooding in Kerala, India. Source: ICEYE, Swiss Re CatNet® That said, industry modelling capabilities for flood risk are still less rigorous than for primary perils, and more work needs to be done. To build resilience in a wetter world, we need to redouble our efforts to bolster flood-specific data and modelling. This means: Affording floods the same attention as primary perils, Improving data quality and granularity by capturing and sharing flood-specific exposure, and Advancing modelling capabilities while keeping abreast of fast-developing temperature and land-use changes, urbanization, and other social and macroeconomic trends Boosting insurance penetration is also key to closing the flood protection gap. While traditional indemnity flood cover can certainly serve this purpose, parametric or index-based solutions are becoming increasingly popular for their efficiency and versatility. To give just one example, in 2020, Swiss Re partnered with India's northeastern state of Nagaland to provide parametric coverage for the monsoon season. The transaction covers the entire state of Nagaland through six distinct zones, with a stepped payout feature to ensure funds are allocated where losses occur and in proportion to the amount of rainfall recorded. By protecting the state treasury’s balance sheet, the solution enables Nagaland to build fiscal resilience against natural disasters. Re/insurers can further contribute to flood resilience by making long-term investments in sustainable infrastructure and mitigation strategies. ‘Grey infrastructure’ such as dams and levees have been the traditional approach to mitigate flood risk, while ‘Green infrastructure,’ such as reef and mangrove restoration can alleviate flood risk by allowing excess water to soak into the ground and create much less damage. Fostering the development of this infrastructure can enable communities to stand stronger in the face of disasters and climate change. Flood risk can be managed, but it requires concerted action by all of us. If government, the insurance industry and our societies commit collectively to addressing flood risk through mitigation, smart planning and proactive steps to reduce financial exposure, we can succeed in making Asia, the region we call home, better prepared and positioned for prosperity. Source: swissre.com

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The worst possible climate change catastrophic scenarios, including collapse of society or the potential extinction of humans are being ignored according to a group of global scientists. The group of 11 scientists have called upon the United Nations’ Intergovernmental Panel on Climate Change to prepare a special science report to bring into focus how much is at stake in a worst-case scenario. In their perspective presented to the Proceedings of the National Academy of Sciences, the scientists have raised the idea of human extinction and worldwide societal collapse, calling it ‘a dangerously underexplored topic’. The scientists, however, have said they aren’t saying that worst is going to happen but the trouble is no one knows how likely or unlikely a ‘climate endgame’ is and the world needs those calculations to battle global warming. Centre for the Study of Existential Risk at the University of Cambridge faculty and lead author of the study Luke Kemp said, “Even if we have a 1% chance of having a global catastrophe, going extinct over the coming century, that 1%, that is too high.” Global Systems Institute at the University of Exeter and co-author of the study Tim Lenton said, “Good risk analyses consider both what’s most likely and what’s the worst that could happen but because of push back from non-scientists who reject climate change, mainstream climate science has concentrated on looking at what’s most likely and also disproportionately on low-temperature warming scenarios that come close to international goals.” When global science organizations look at climate change they tend to just look at what happens in the world: Extreme weather, higher temperatures, melting ice sheets, rising seas and plant and animal extinctions. But they aren’t factoring enough how these reverberate in human societies and interact with existing problems — like war, hunger and disease. University of Washington public health and climate professor and a co-author of the study Kristie Ebi said, “It was a mistake health professionals made before COVID-19 when assessing possible pandemics. They talked about disease spread, but not lockdowns, supply chain problems and spiralling economies. Professor Lenton said researching worst case scenarios could find nothing to worry about. “Maybe it’s that you can thoroughly rule out a number of these bad scenarios. Well, that’s actually really well worth spending your time doing that. Then we should all cheer up a bit,” he said. Source: asiainsurancereview.com