Nonlife insurers recently welcomed the first of two revisions in the schedule of premiums for risks of earthquake as well as typhoons and floods, which will take effect for policies issued beginning Nov. 1. Through Circular Letter No. 2022-34 issued last July 14, the Insurance Commission approved a revised rating structure for all catastrophe risk policies, which all nonlife insurance companies and intermediaries are ordered to adopt. The circular provides that the minimum insurance premium—which is currently set at 0.1 percent of the sum insured for earthquake risks and 0.05 percent for typhoon and flood risks—shall be diversified not only in terms of rate but also in terms of construction types and risk zones. Risk types related to flood and typhoons classifies the construction of a structure as “high grade” if built with reinforced concrete and steel or “others” if built with wood, masonry or unknown material. Risk types related to earthquakes classify the construction of a structure as “high grade” if built with reinforced concrete, steel and wood or “others” if built with masonry and unknown material. This means that, at an insured sum of P1 million for example, the premium would cost P1,000 (earthquake) or P500 (typhoons and floods). Following the example, the new schedule for minimum premiums on flood and typhoon risks that will take effect on Nov. 1 will range from as low as 0.047 percent up to 0.1 percent or P470 to P1,000. Accounting for earthquakes Also, the new schedule for minimum premiums on earthquake risk that will take effect on Nov. 1 will range from as low as 0.047 percent up to 0.1 percent or P420 to P1,000. The Philippine Insurers and Reinsurers Association (Pira) said in a statement that, with climate change at the forefront of many nations’ urgent concerns driven by the increasing number and ferocity of the resulting adverse weather that it causes, the Philippines counted among the countries most vulnerable to the risks of disasters. Pira said that, Given this scenario, a review of the outdated catastrophe rates currently in place had to be done as these have not been reviewed over the last thirty years. “Ideally, these rates need to be reviewed annually using catastrophe models and statistical analysis available to scientists and insurers around the world,” the group said. “In short, the need to create a more risk-appropriate rating environment would in the end ensure sustainable disaster premium rates to equally support the sustainability of the insurance industry and ensure its presence and capability to service future cat peril claims, especially when it is most needed,” the industry group added. INQ Source: business.inquirer.net

Biography of Michael F. Rellosa Mr. Michael F. Rellosa is the Executive Director of the Philippine Insurers and Reinsurers Association (PIRA), serving initially as its chairman in 2010 until his appointment to his present position in 2018. He is also concurrently the association’s Public Relations Committee Chairman and its designated Industry spokesperson. Prior to assuming his post in PIRA fulltime, he served as the President and Chief Operating Officer of Fortune General Insurance Corporation. Mitch, as he is fondly called by friends and colleagues, has been very active in serving the Insurance Industry through his involvement with various entities in various capacities. Following his regional stint as Chairman of the ASEAN Insurance Council (AIC) from 2015 to 2016, he still holds the Chairmanship of the Education Committee of the ASEAN Insurance Council (AIC) composed of top insurance industry leaders in the Southeast Asian region. Mr. Rellosa is a regular lecturer at the Insurance Institute for Asia and the Pacific and recently was elected to its Board for the years 2021-2023. He was recently elected as President of EAIC, East Asian Insurance Council, for the years 2022-2024. Mitch sits as the Committee Chair and Priority Area Lead on Re/Insurance, one of the 4 key priority areas of the Arise-Philippines (Private Sector Alliance on Disaster Resilient Societies). He now writes a monthly Opinion Column for the Manila Times on topics related to Insurance, Risk Management, and other topics close to his heart.

A comparison of the health impacts of climate change across countries points to a future that intensifies current inequalities: among G20 countries - which account for the majority of cumulative CO2 emissions -- a third will experience additional death rates because of climate change. But this surges to nearly three-quarters of the Least Developed Countries, dramatically increasing inequalities over the coming decades, according to the new Human Climate Horizons platform launched on 7 November 2022 by the United Nations Development Programme (UNDP) and the Climate Impact Lab. Designed to empower people and decision-makers everywhere, it shows what climate change could mean for people’s lives through changes in mortality, the ability to earn a living, and energy use. For example, in Dhaka, the capital of Bangladesh, under a scenario of very high emissions, the additional deaths by 2100 due to climate change (132 in every 100,000 people per year) would be nearly twice Bangladesh’s current annual death rate from all cancers, and 10 times its annual road traffic fatalities. UNDP Administrator Achim Steiner said, “Focusing on the effect of climate change on issues like mortality, labour and energy use, the new Human Climate Horizons puts vital data and analytics into the hands of policymakers, helping countries to take climate action where it is needed most. For instance, the platform shows that stronger global efforts towards the Paris Agreement’s targets could reduce projected mortality from extreme heat in the year 2100 by more than 80%, saving tens of millions of lives.” The new data also show that climate change will increase within-country inequalities. For example, in Barranquilla, a port city in northern Colombia, under a scenario of very high emissions, the additional death rate by 2100 because of warmer temperatures (37 people in every 100,000 per year) is five times greater than Colombia’s death rate from breast cancer each year today. This would widen the gap of death rates due to climate change compared with the capital Bogotá. “The Climate Impact Lab combines global data, big data analytics, and detailed climate models to estimate the costs of climate change—and the benefits of reducing emissions. Grounded on solid research, it shows how the future impacts of climate change disproportionately fall on regions that are the hottest and often the poorest today, exacerbating existing inequality,” said Climate Impact Lab’s Sol Hsiang, Chancellor’s Professor of Public Policy at the University of California at Berkeley. “Fortunately, the world can still change course by aggressively reducing emissions,” he said. The new data show the need to act quickly, not only to mitigate climate change but also to adapt to its consequences. For instance, in Faisalabad, Pakistan, even with moderate mitigation, additional deaths due to climate change would average 36 per 100,000 people each year between 2020-2039. Without substantially expanding adaptation efforts, Faisalabad could expect annual climate change-related death rates to nearly double, reaching 67 deaths per 100,000 by mid-century. An increment almost as deadly as strokes, currently Pakistan’s third leading cause of death. “As we face the punishing impacts of global climate change it can be easy to wonder whether efforts to reduce emissions by individual countries, states, or cities really make a difference. This platform shows the direct role these efforts play in shaping our collective future,” said Climate Impact Lab’s Hannah Hess, Associate Director at Rhodium Group. Human Climate Horizons data and insights platform Human Climate Horizons (HCH) is a data and insights platform providing localized information on future impacts of climate change across several dimensions of human development. It is open access and scalable, fed by an evolving stream of multidisciplinary frontier research. It is the result of joint work of the Climate Impact Lab and the UNDP’s Human Development Report Office. HCH also offers anyone a window into climate change through localized temperature data: users can, in many cities, explore how much more extreme the climate might become and what that will mean for their future and their children. Estimates are built around expert projections for income and population growth, future greenhouse gas emissions, and simulations from 33 climate models, and so they are state-of-the-art and freely available. The analysis is rigorous. It has been reviewed and published by top academic journals including Nature and the Quarterly Journal of Economics. Providing hyperlocal coverage for more than 24,000 regions worldwide, two different policy scenarios and time horizons through the end of the 21st century, the platform provides empirically grounded data on the potential human costs of climate change. Its first release covers the effects of climate change on mortality, labour, and energy use. The modelling will soon cover much more including climate change’s impacts on coastal communities, food production and damage to infrastructure. Source: asiainsurancereview.com

Authors: Richard Mattison, President, S&P Global Sustainable1 | Bernard de Longevialle, Global Head of Sustainable Finance, S&P Global Ratings Co-authors: Bruno Bastit, Lindsey Hall, Lai Ly, Paul Munday, Bruce Thomson Published: January 31, 2022 HIGHLIGHTS Total sustainable debt issuance reached a record high in 2021 and is poised for continued growth in 2022. A key challenge for market participants in the coming year will be to manage that growth in a way that combats rising concerns about greenwashing. While many large companies set sustainability goals and published ESG-related data in 2021, investors, regulators, and the broader public are exercising greater scrutiny of corporate sustainability efforts. In 2022, corporate boards and government leaders will face rising pressure to demonstrate that they are adequately equipped to understand and oversee ESG issues — from climate change to human rights to social unrest. Following the unprecedented market and policy momentum behind ESG in 2021, investors, corporate boards, and government leaders have raised expectations for progress on climate pledges in 2022. Alongside climate, biodiversity, and other environmental concerns, social issues — like diversity, equity, and inclusion and worker wellbeing — appear poised to remain in the spotlight, particularly as they are increasingly woven into broader ESG discussions. Rising demands for action will likely increase pressure for more accountability, greater regulatory scrutiny, and credible disclosure backed by better data. Below, S&P Global outlines key ESG trends that we think will drive the conversation in 2022. Critically, these trends exhibit overlaps and interactions that will have a direct influence on the prospects for meaningful progress on ESG issues in 2022. As the graphic below illustrates, the E, S, and G trends we have identified should not be considered in isolation, but rather we believe they should be understood in relation to each other. Pressure will grow on corporate boards and government leaders to enhance their ESG skills. In 2022, corporate boards and government leaders will face rising pressure to demonstrate that they are adequately equipped to understand and oversee ESG issues — from climate change to human rights to social unrest. The broadened scope of corporate board responsibilities also requires more focus and time commitment from board members to meet their fiduciary duties. Pressure on boards to shore up their ESG credentials is set to grow as investors demand better accountability from the top and heightened focus on sustainability. Shareholder activism in this area increased in 2021, including votes against directors for lack of credible climate action plans. This trend is set to pick up speed during the 2022 proxy season. In addition, efforts to diversify boards and create policies that foster meaningful diversity, equity, and inclusion will continue to evolve from a box-ticking approach into a holistic appreciation of how differences in identities, expertise, and leadership styles can drive growth and innovation. Government and corporate leaders are under pressure to strengthen their ESG skills and integrate sustainability into their policy and planning strategies. In particular, they will add adaptation and resilience measures to their investment plans amid the growing economic impact of climate change. In 2021, the U.S. alone experienced 20 storms with losses exceeding $1 billion each. New regulations and reporting standards will demand more credible corporate disclosures. While many large companies set sustainability goals and published ESG-related data in 2021, investors, regulators, and the broader public are exercising greater scrutiny of corporate sustainability efforts, calling out what they perceive as greenwashing. Much of this skepticism is founded on concerns that companies may be using disclosures and sustainability-related labels on products and services as a marketing tool to appear more proactive on those issues than they truly are. New global ESG-related standards will continue to evolve in 2022, while global standard-setting bodies such as the newly formed International Sustainability Standards Board can help address what may be the largest obstacle to accountability: the lack of a common baseline for disclosure standards consistent across jurisdictions and industries. To date, agreement on key metrics and reporting frameworks for environmental factors has crystallized more rapidly than for social factors. But 2022 could bring increasing convergence on the data, metrics, and reporting requirements most relevant to social issues — alongside rising pressure to ensure these metrics measure impact, not just inputs. Governments and companies will face the challenge of turning net zeros pledges into near-term action. In 2021, the number of governments and large companies setting goals to reach net zero emissions by 2050 grew rapidly. But these commitments often lacked interim emission reduction targets or plans to curb indirect emissions that occur along the supply chain. In 2022, we believe that pressure from shareholders and other stakeholders will rise on those entities to develop concrete, near-term plans and begin to act to address emissions across the full value chain. A 2018 report from the UN's Intergovernmental Panel on Climate Change found that achieving net zero emissions globally by 2050 is critical to avoiding some of the worst effects of climate change. In 2021, the IPCC issued a high-profile climate report that the UN Secretary-General dubbed “a code red for humanity.” This year, the IPCC will release new reports that could recalibrate how quickly the world must act to keep from overshooting the target of limiting global warming this century to 1.5 degrees Celsius relative to pre-industrial levels. With stakes this high, investors will likely demand more than simply setting long-term climate commitments. We think governments and companies will have to provide credible, achievable near-term signposts on their path to decarbonization. And beyond the established focus on emission reductions, the spotlight will extend to how entities manage exposure to physical climate risks, including the presence and/or adequacy of adaptation and resiliency planning. These expectations will begin to hold entities accountable to their commitments and help address market perceptions of greenwashing. Climate transition strategies will increasingly embrace social issues. Despite expectations for governments and companies to make meaningful progress on their climate commitments in 2022, they will be doing so in a broader economic and geopolitical climate marked by inflationary trends, higher energy costs, and tightening monetary policy. These shifts will challenge the climate agenda and sharpen attention on managing the social implications of the transition. In 2022, a key challenge will be balancing actions taken on the ‘E’ with the ‘S’ when implementing climate transition plans to account for impacts on developing nations and vulnerable domestic populations. In particular, efforts to promote the low-carbon economy may be disrupted in the absence of credible plans to promote economic and social inclusion, access to affordable critical services, and the availability of decent work. Indeed, at COP26 in November 2021, more than 30 countries signed pledges to support workers and communities hurt by the transition to a green economy. In the face of potential economic headwinds, the support provided to emerging economies to balance climate goals with those of economic growth and poverty alleviation will deeply affect social stability and momentum on the global climate agenda. Climate stress testing will gain prominence in the financial services industry. Investor pressure regarding climate change has historically concentrated on nonfinancial corporations, especially the energy sector. However, major financial institutions and policymakers are beginning to acknowledge the associated long-term threat to financial stability. They’re also starting to recognize the vital role that financing will play in facilitating the low-carbon transition and ensuring the climate resiliency of the economy. Increasingly, based on the work of the Network for Greening the Financial System (NGFS), central banks are beginning to incorporate climate risk as a stress testing feature for banks and insurers. The European Central Bank’s economy-wide climate stress testing in 2021 showed the need for banks to enhance assessment of their exposure to both climate transition risks and physical risks in order to proactively manage them. In the U.S., the Federal Reserve is weighing the implications of climate-related risks for financial institutions and the financial system and has called scenario analysis “a potential key analytical tool for that purpose.” China, too, has been examining ways of incorporating climate change risk in its stress testing of financial institutions. Much of the work on climate stress tests is coming from collaborative work globally by central banks, something we see continuing in 2022. Insurance regulators are also taking steps to integrate sustainability, and particularly climate risks, into their prudential frameworks. We view stress testing as a useful starting point as companies work to measure their climate risk. However, we think there will be continued development of qualitative approaches to supplement these assessments. Assessing natural capital and biodiversity risks will continue to rise in importance. Governments and companies are beginning to make progress on commitments to protect biodiversity and nature in their direct operations. For corporates, assessing and managing across their supply chains where materials and inputs are sourced is even more challenging. Data availability and quality as well as generally agreed measurement methodologies remain key challenges. In addition, most of the corporate world still lacks commitments to stop deforestation despite being more easily measured than other natural capital risks, principally due to poor understanding of how to assess the benefits of preservation. Elsewhere, the benefits of nature-based solutions, such as preserving wetlands, forests, and coastlines, will continue to gain favor as effective strategies to help adapt to the physical impacts of climate change. Several important new initiatives in 2022 should help efforts to prioritize biodiversity. A landmark event in Kunming, China, the next UN Biodiversity Conference, will take place in the late April to early May. At this event, governments will aim to agree on a set of new goals over the next decade as part of the Convention on Biological Diversity, given that the previous targets set for 2020 were not met. Against this backdrop, the final text of the new framework will be an important milestone to set priorities and help strengthen ambitions and measure progress — or the lack thereof. Elsewhere, the newly formed Taskforce on Nature-related Financial Disclosures will propose a disclosure framework for nature-related information, including standards and metrics, as well as data requirements, that will bring biodiversity and nature commitments into greater focus. Social issues in supply chains will command more attention. In 2021, companies became acutely aware of their dependency on — and the fragility of — their supply chains. In 2022, we believe this trend will persist as the global economy continues to recover from the pandemic and as management teams focus on heightened supply chain costs and risk of disruption. Beyond the resilience of supply chains, we also think that social issues in supply chains will garner greater attention, particularly as efforts grow to curb human rights abuses and improve labor conditions. Existing and proposed legislation will make supply chain traceability and social risk management more important this year. Despite delays in the EU Sustainable Corporate Governance directive in 2021, mandatory human rights due diligence legislation at the national level in member states such as Germany, the Netherlands, and France will move a larger swath of companies to identify and act against human rights violations in their supply chains. Additionally, continued action in the U.S. and other key markets to restrict imports based on forced labor in supply chains will push companies to evidence credible human rights monitoring efforts up the chain. This will be true beyond Tier 1 suppliers and will include raw materials. The debate over divestment versus engagement will heat up. In 2021, we saw more large asset owners, asset managers, and banks adopt negative screening strategies — in other words, exclusion or divestment of companies with weak ESG practices or high exposure to ESG risk. This approach was most notably applied to fossil fuel and other high carbon intensity companies as well as entities with a high risk of acute and chronic physical climate risks. In 2022, we anticipate that negative screening will become more widespread — especially to decarbonize investment portfolios and loan books, as financial services companies seek to build Paris-aligned investment and lending portfolios, further raising the importance of ESG to credit. Exclusion policies may have immediate effects on the reduction of the carbon footprint of lending or investment portfolios, but this approach has its drawbacks. Advocates of engagement policies note that breaking ties with companies via divestment or exclusion does not encourage change and could result in the sale of those securities to investors who are less attentive to ESG issues. Proponents of engagement therefore prefer to use their investments to influence change by engaging with companies on key ESG themes like the climate transition or working conditions in the supply chain. Whether they take an approach of negative screening or engagement, lenders and investors will be under pressure to explain how they arrive at their decisions. They will also face pressure to credibly measure and disclose the concrete outcomes of their chosen approach. The integrity of the growing sustainable debt market will be tested. In 2021, total sustainable debt issuance reached a record high of about $960 billion, according to preliminary estimates from the Environmental Finance Bond Database. This figure includes green, social, and sustainability-linked bonds and represents a 61% increase in just one year. Based on historical trends, there is room for continued growth, if not acceleration in 2022, as companies and governments seek to finance the transition to a net zero economy. A key challenge for market participants in the coming year will be to manage this growth in a way that preserves the legitimacy of these financing instruments and combats rising concerns about greenwashing. Indeed, diversification and innovation in sustainable debt instruments are likely to continue, risking greater fragmentation across issuers, instruments, sectors, and standards. For instance, with sustainability-linked instruments, which are poised for strong growth in 2022, market participants should be vigilant to ensure that issuers are setting appropriately ambitious performance targets and maintaining transparency over the life of the instrument through periodic and high-quality disclosure. Efforts to further establish and encourage the uptake of clear standards and frameworks, therefore, will be critical in 2022 to guard the integrity of the sustainable debt market as it reaches new heights. Source: spglobal.com

Editor’s note: Founded in 1945 by Albert Einstein and University of Chicago scientists who helped develop the first atomic weapons in the Manhattan Project, the Bulletin of the Atomic Scientists created the Doomsday Clock two years later, using the imagery of apocalypse (midnight) and the contemporary idiom of nuclear explosion (countdown to zero) to convey threats to humanity and the planet. The Doomsday Clock is set every year by the Bulletin’s Science and Security Board in consultation with its Board of Sponsors, which includes 11 Nobel laureates. The Clock has become a universally recognized indicator of the world’s vulnerability to catastrophe from nuclear weapons, climate change, and disruptive technologies in other domains. To: Leaders and citizens of the world Re: At doom’s doorstep: It is 100 seconds to midnight Date: January 20, 2022 Last year’s leadership change in the United States provided hope that what seemed like a global race toward catastrophe might be halted and—with renewed US engagement—even reversed. Indeed, in 2021 the new American administration changed US policies in some ways that made the world safer: agreeing to an extension of the New START arms control agreement and beginning strategic stability talks with Russia; announcing that the United States would seek to return to the Iran nuclear deal; and rejoining the Paris climate accord. Perhaps even more heartening was the return of science and evidence to US policy making in general, especially regarding the COVID-19 pandemic. A more moderate and predictable approach to leadership and the control of one of the two largest nuclear arsenals of the world marked a welcome change from the previous four years. Still, the change in US leadership alone was not enough to reverse negative international security trends that had been long in developing and continued across the threat horizon in 2021. US relations with Russia and China remain tense, with all three countries engaged in an array of nuclear modernization and expansion efforts—including China’s apparent large-scale program to increase its deployment of silo-based long-range nuclear missiles; the push by Russia, China, and the United States to develop hypersonic missiles; and the continued testing of anti-satellite weapons by many nations. If not restrained, these efforts could mark the start of a dangerous new nuclear arms race. Other nuclear concerns, including North Korea’s unconstrained nuclear and missile expansion and the (as yet) unsuccessful attempts to revive the Iran nuclear deal contribute to growing dangers. Ukraine remains a potential flashpoint, and Russian troop deployments to the Ukrainian border heighten day-to-day tensions. For many countries, a huge gap still exists between long-term greenhouse gas-reduction pledges and the near- and medium-term emission-reduction actions needed to achieve those goals. Although the new US administration’s quick return to the Paris Agreement speaks the right words, it has yet to be matched with actionable policies. Developed countries improved their responses to the continuing COVID-19 pandemic in 2021, but the worldwide response remained entirely insufficient. Plans for quick global distribution of vaccines essentially collapsed, leaving poorer countries largely unvaccinated and allowing new variants of the SARS-CoV-2 virus to gain an unwelcome foothold. Beyond the pandemic, worrying biosafety and biosecurity lapses made it clear that the international community needs to focus serious attention on management of the global biological research enterprise. Further, the establishment and pursuit of biological weapons programs marked the beginning of a new biological arms race. And while the new US administration made progress in reestablishing the role of science and evidence in public policy, corruption of the information ecosystem continued apace in 2021. One particularly concerning variety of internet-based disinformation infected America last year: Waves of internet-enabled lies persuaded a significant portion of the US public to believe the utterly false narrative contending that Joe Biden did not win the US presidential election in 2020. Continued efforts to foster this narrative threaten to undermine future US elections, American democracy in general, and, therefore, the United States’ ability to lead global efforts to manage existential risk. In view of this mixed threat environment—with some positive developments counteracted by worrisome and accelerating negative trends—the members of the Science and Security Board find the world to be no safer than it was last year at this time and therefore decide to set the Doomsday Clock once again at 100 seconds to midnight. This decision does not, by any means, suggest that the international security situation has stabilized. On the contrary, the Clock remains the closest it has ever been to civilization-ending apocalypse because the world remains stuck in an extremely dangerous moment. In 2019 we called it the new abnormal, and it has unfortunately persisted. Last year, despite laudable efforts by some leaders and the public, negative trends in nuclear and biological weapons, climate change, and a variety of disruptive technologies—all exacerbated by a corrupted information ecosphere that undermines rational decision making—kept the world within a stone’s throw of apocalypse. Global leaders and the public are not moving with anywhere near the speed or unity needed to prevent disaster. Leaders around the world must immediately commit themselves to renewed cooperation in the many ways and venues available for reducing existential risk. Citizens of the world can and should organize to demand that their leaders do so—and quickly. The doorstep of doom is no place to loiter. The nuclear tightrope During 2021, some nuclear risks declined while others rose. Upcoming decisions on nuclear policies could generate either salutary or dangerous modifications of an already uncertain and worrisome security situation. The February 2021 agreement between the United States and Russia to renew New START for five years is a decidedly positive development. This extension creates a window of opportunity to negotiate a future arms control agreement between the two countries that possess 90 percent of the nuclear weapons on the planet. The United States and Russia also agreed to start two sets of dialogues about how to best maintain “nuclear stability” in the future: the Working Group on Principles and Objectives for Future Arms Control and the Working Group on Capabilities and Actions with Strategic Effects. These groups have met and in early 2022 are expected to report on initial results of the consultations, aimed at shaping future arms control agreements. Another bright spot was the Biden administration's announcements that it would seek to return to the Joint Comprehensive Plan of Action (JCPOA) with Iran and offer to enter strategic stability talks with China. Although no talks between North Korea and the United States took place in 2021, the North Koreans have not resumed testing of nuclear weapons or long-range intercontinental ballistic missiles (ICBMs). (Tests of shorter-range missiles have continued.) Finally, when the Biden administration began its Nuclear Posture Review (NPR) process, it announced that one specific goal would be to “reduce the role of nuclear weapons” in US national security policy. Other developments, however, appeared on the negative side of the ledger: Iran continues to build an enriched uranium stockpile, insisting that all sanctions be removed before returning to talks with the United States on the JCPOA. The window of opportunity seems to be closing. Over time, Iran's neighbors, particularly Saudi Arabia, may feel compelled to acquire similar capabilities, foreshadowing the frightening possibility of a Middle East with multiple countries with the expertise and material to build nuclear weapons. The Chinese have started to build new ICBM silos on a large scale, leading to concerns that China may be considering a change in its nuclear doctrine. China and Russia have both tested anti-satellite weapons recently, increasing concerns about rapid escalation in any conventional conflict with the United States. Efforts by all three countries to field hypersonic missiles are beginning to yield results, intensifying competition. While experts disagree on both the causes and the consequences of these programs, they clearly mark the start of a new arms competition. The North Koreans continue to test nuclear-capable short- and medium-range missiles, including cruise, ballistic, and glide vehicles, and there is evidence of their restarting plutonium production. Meanwhile, there have been no high-level negotiations between the United States and North Korea. India and Pakistan continue to advance their nuclear, missile, and other military capabilities with no diminution of possible flash points that could lead to nuclear conflict. As the January 6, 2021 insurrection at the US Capitol demonstrated, no country is immune from threats to its democracy, and in a state with nuclear-weapons-usable material and nuclear weapons, both can be targets for terrorists and fanatics. Notably, the insurrectionists came close to capturing Vice President Mike Pence and the “nuclear football” that accompanies the vice president as the backup system for nuclear launch commands. More than 10 percent of those charged with crimes during the January 6th insurrection were veterans or active service members. The Pentagon has conducted a major review of extremism in the military and has adopted new definitions of extremist activities in an attempt to reduce this danger in the future. The seriousness of the problem is clear. Finally, the United States is preparing a Nuclear Posture Review to guide US strategy, policy, and deployments of nuclear weapons, but its overall message appears not yet decided. We hope the document will assert that the United States will reduce the role of nuclear weapons in its deterrence and defense policies, which in turn may positively affect the nuclear weapons postures of other countries, leading, we believe, to a safer world. Where we set the Clock next year will be influenced by what the Nuclear Posture Review ultimately contains. Reports of congressional interference in the process, resulting in the firing of personnel conducting the review, suggests unwelcome politicization that could well affect the outcome and make more rational nuclear weapons policies hard to effect. Climate change: Lots of words, relatively little action This past year’s climate negotiations in Glasgow marked an important milestone in climate multilateralism: a critical first round of the treaty’s cycle of upgrading national efforts. Countries were under pressure to strengthen their emission-reduction pledges significantly relative to their pledges six years ago in Paris. The results, unfortunately, were insufficient. China and India affirmed that they would move away from use of coal, but only gradually; they affirmed for the first time the objective of achieving “net zero,” but only in 2060 and 2070, respectively. There was only partial progress toward defined accounting rules to allow international markets for greenhouse gas emissions and removals to develop. Developed countries again failed to follow through on treaty commitments to provide necessary financial and technological support. Overall, countries’ projections and plans for fossil fuel production are far from adequate to achieve the global Paris goals to limit the warming of the surface of the planet to “well below two degrees Celsius” (3.6 degrees Fahrenheit) relative to the temperature around 1800, at the beginning of the industrial revolution. Encouragingly, several countries (as well as financial institutions and corporations) have announced a commitment to achieve net-zero carbon dioxide emissions for the long term—meaning by 2050 or thereabouts. These announcements are significant, in that reaching zero aggregate carbon dioxide emissions globally would halt the buildup of greenhouse gas pollution in the atmosphere, which is absolutely critical to halting yet more warming. Earnest efforts to reach these seemingly distant targets require concerted actions in the immediate term, including a redirection of investment away from the production and use of fossil fuel and toward renewables and energy efficiency, massive upgrading of existing infrastructure, and a shift in land use and agriculture practices. The real test of the significance of these net-zero pledges will be whether they are matched by near- and medium-term emission-reduction actions. Last year, we noted optimistically the election of a US president who “acknowledges climate change as a profound threat and supports international cooperation and science-based policy,” and we’ve seen a dramatic change in tone from the previous presidential administration. Recognizing that “[t]he effects we are seeing of climate change are the crisis of our generation,” Biden has indeed attempted to move forward quickly, reentering the United States in the Paris Agreement and announcing the United States’ updated Paris emission pledge of a 50 percent reduction by 2030. He has also signaled an attentiveness to the connection between climate action and environmental justice, in both the domestic and international contexts. He has committed to making climate investments in disadvantaged communities within the United States, and at the UN General Assembly meeting he pledged to double climate financing to developing countries. However, progress achievable through the US political process is highly constrained and fragile, as any subsequent president may try to swing the pendulum backward. The major infrastructure package passed in 2021 is less of a “climate bill” than the Biden administration initially proposed, and the fate of the climate goals of the “Build Back Better” bill hangs in the balance of a starkly divided Congress. It thus is not yet clear how much progress the United States will make in the coming year toward its announced emissions reduction pledge and finance promise. For over four decades the threat of climate change to “future generations” has been ruefully noted. As warming has continued to drive up temperatures—from an unprecedented extreme high temperature of 100 degrees Fahrenheit in the Siberian Arctic to the record-breaking 2021 “heat dome” over western Canada and the United States—today’s young people are increasingly seeing themselves as the future victims. They are witnessing human and ecosystem tragedies caused, for example, by droughts in eastern Africa and the United States, floods in China and Europe, and wildfires raging around the world, harbingers of yet more dire consequences as climate change accelerates in their lifetimes. The experience of a deepening crisis has animated protests and other civil society expressions of alarm this year. These have occurred at major political events (such as the G7 Summit), by youth climate movements (such as the student-led Fridays for Future protests around the world), at September’s Climate Week in New York, at COP26 in Glasgow, and at individual sites of proposed new fossil fuel infrastructure (such as Line 3 in the United States, the Trans Mountain Pipeline in Canada, and the EACOP pipeline in Uganda and Tanzania). These actions focus public attention on climate change and raise its political salience, but whether they will transform policies, investments, and behaviors remains among the most important questions facing global society. The burgeoning biological threat to civilization For years, the United States and many other countries underinvested in defense against natural, accidental, and intentional biological threats. They also underestimated the impacts that a biological threat could have on the entire world. COVID-19 revealed vulnerabilities in every country and the world’s collective ability to prepare for, respond to, and recover from infectious disease outbreaks. The COVID-19 pandemic rightly has absorbed the world’s attention, given its demonstrated ability to sicken and kill millions, weaken national economies and global supply chains, and destabilize governments and societies. And yet, what the world has experienced during this pandemic is nowhere close to a worst-case scenario. To deal with the crisis at hand, the world is focusing almost all its efforts on COVID-19, to the exclusion of other biological threats. The scope of potential biological threats is expansive. Preventing and mitigating future biological events will require a wider lens for viewing biological threats. For example, slow vaccination rates have allowed virus mutations, perpetuating the threat from COVID-19. Similarly, failing to address antibiotic resistance could trigger a worldwide pandemic involving antimicrobial-resistant organisms within a decade. Research into novel diseases has proliferated high-containment laboratories around the world. Some of those labs inadvertently release pathogens into the environment. Some regimes to monitor and regulate these laboratories are perceived by their researchers to be excessively burdensome and restrictive. At the same time, the Biological Weapons and Toxin Convention still struggles to find effective ways to enforce its prohibitions on the development and production of biological agents and weapons. This year, the US Department of State declared that Russia and North Korea possess active biological weapons programs and expressed concern about dual-use biological research programs in China and Iran. Terrorist organizations such as Al Qaeda and ISIS and some criminal organizations continue to profess their determination to build, acquire, and use biological weapons to achieve their goals. The globally inadequate response to COVID-19 only serves to underscore that an attack using a weapon containing biological agents designed to resist existing medical countermeasures could provide attackers with some of the tactical, operational, strategic, and economic advantages they seek. The US Department of Defense is now concerned enough about that prospect to undertake a biological posture review. The world now lives in an age of biological innovation. Many countries and corporations are making enormous investments in biological science, biotechnology, and combinational science and technology (in which biology combines with other fields), recognizing that they have immense opportunities to establish and grow bio-economies. Innovative biological research and development efforts simultaneously increase and decrease biological risk. The field is moving quickly. CRISPR-Cas9, the revolutionary genetic engineering tool that scientists in the United States and Sweden discovered in 2012, is cheap and ubiquitous today, spurring investments in genetic testing and adult stem cell technologies. Countries and non-state actors are exploring ways to create super-soldiers, personalize medicine, increase human performance, improve human gene therapy, and synthesize biology. Innovations such as synthetic biology have created new areas of discovery, outpacing current public health, safety, and security measures. The world is failing to recognize the multifaceted nature of the biological threat. Advances in biological science and technology can harm us as well as help us. Leaders must recognize that COVID-19 is not the last biological threat we will have to face in our lifetimes—or, perhaps, even this year. Disruptive technology in the age of disinformation The new US administration has done much to reestablish the role of scientists in informing public policy, and even more to minimize deliberate confusion and chaos emanating from the White House. Thoughtful deliberation—merely a promise in January 2021—appears to be realized more often today. On the other hand, disinformation fomented outside the executive branch—including from some members of Congress and many state leaders—appears to have taken root in alarming and dangerous ways. Large fractions of Congress and the public continue to deny that Joe Biden legitimately won the presidential election, and their views on these matters appear to be hardening rather than moderating. Similar trends regarding COVID-related disinformation are apparent around the world, crippling the ability of public health authorities and medical science to achieve higher vaccination rates. Mask-wearing and social distancing are similarly discouraged by disinformation. While we know more now about the role of social media campaigns in taking advantage of vulnerabilities in human psychology and cognition to spread disinformation and societal disunity, the behavior of social media companies has changed hardly at all. Political attacks on institutions that provide societal continuity and store hard-won knowledge about how best to deal with problems continue apace. In cyber conflict, cyberattackers have grown more audacious. The SolarWinds hack, an attack on Microsoft Exchange that affected millions around the world, and a ransomware attack on Colonial Pipeline (resolved only with the payment of $4.4 million to get the system up and running again) all demonstrate the far-reaching ramifications of cyber-vulnerabilities. The good news in cyber includes a Biden executive order and other federal government initiatives on cybersecurity that seem to have significant force and momentum behind them and have gone farther than previous orders and initiatives. The expert cybersecurity team the new administration has assembled has the ear of the president. In addition, against all odds, both the UN Open-Ended Working Group and the Group of Government Experts have reached some rough consensus on cyber norms of behavior. (The first group involves representatives from most of the world’s nations; the latter includes the biggest players in cyber.) It remains to be seen whether these norms actually affect the behavior of national actors in cyberspace, but it is better to have these norms in place (or in the process of being formed and agreed to) than not to have them at all. It also appears that Chinese use of surveillance technology has reached new heights in Xinjiang in the last year. Artificial intelligence and facial recognition systems intended to reveal states of emotion have been tested on Uyghurs in Xinjiang. In the last year, it has also come to light that China is seeking to develop standards for using facial recognition that can be optimized for distinguishing individuals by ethnic group. The potential widespread deployment of these technologies presents a distinct threat to human rights around the world and, therefore, civilization as we know and practice it. Finally, tensions over military space activity have increased in the past few years. For example, Russia conducted an anti-satellite missile test in November, destroying one of its own satellites and creating a debris cloud that orbited dangerously close to the International Space Station. Russia has also “injected an object into orbit” that subsequently approached another Russian satellite already in orbit in a manner consistent with its use as an anti-satellite weapon. A similar activity has been used to follow a US government satellite. Press reports have suggested that US Space Command is on the verge of disclosing a new anti-satellite weapon. On the other hand, US officials from the State and Defense departments were reported to be drafting language for a binding UN resolution regarding responsible behavior in space.​ If approved, such language could reduce the likelihood of space incidents taking place. Practical steps to move the world away from catastrophe and toward a safer world Last year, we looked forward to the end of the COVID-19 pandemic—but that end is not yet in sight. Leaders in the wealthiest and most advanced countries have not acted with the speed and focus necessary to manage dire threats to humanity’s future. Our decision to keep the Doomsday Clock at 100 seconds to midnight is a clear warning to the world: We need to back away from the doorstep of doom. Immediate, practical steps to protect humanity from the major global threats that we have outlined are needed: The Russian and US presidents should identify more ambitious and comprehensive limits on nuclear weapons and delivery systems by the end of 2022. They should both agree to reduce reliance on nuclear weapons by limiting their roles, missions, and platforms, and decrease budgets accordingly. The United States and other countries should accelerate their decarbonization, matching policies to commitments. China should set an example by pursuing sustainable development pathways—not fossil fuel-intensive projects—in the Belt and Road Initiative. US and other leaders should work through the World Health Organization and other international institutions to reduce biological risks of all kinds through better monitoring of animal-human interactions, improvements in international disease surveillance and reporting, increased production and distribution of medical supplies, and expanded hospital capacity. The United States should persuade allies and rivals that no-first-use of nuclear weapons is a step toward security and stability and then declare such a policy in concert with Russia (and China). President Biden should eliminate the US president’s sole authority to launch nuclear weapons and work to persuade other countries with nuclear weapons to put in place similar barriers. Russia should rejoin the NATO-Russia Council and collaborate on risk-reduction and escalation-avoidance measures. North Korea should codify its moratorium on nuclear tests and long-range missile tests and help other countries verify a moratorium on enriched uranium and plutonium production. Iran and the United States should jointly return to full compliance with the Joint Comprehensive Plan of Action and initiate new, broader talks on Middle East security and missile constraints. Private and public investors should redirect funds away from fossil fuel projects to climate-friendly investments. The world’s wealthier countries should provide more financial support and technology cooperation to developing countries to undertake strong climate action. COVID-recovery investments should favor climate mitigation and adaptation objectives across all economic sectors and address the full range of potential greenhouse gas emission reductions, including capital investments in urban development, agriculture, transport, heavy industry, buildings and appliances, and electric power. National leaders and international organizations should devise more effective regimes for monitoring biological research and development efforts. Governments, technology firms, academic experts, and media organizations should cooperate to identify and implement practical and ethical ways to combat internet-enabled misinformation and disinformation. At every reasonable opportunity, citizens of all countries should hold their local, regional, and national political officials and business and religious leaders accountable by asking “What are you doing to address climate change?” Without swift and focused action, truly catastrophic events—events that could end civilization as we know it—are more likely. When the Clock stands at 100 seconds to midnight, we are all threatened. The moment is both perilous and unsustainable, and the time to act is now. Source: thebulletin.org

yufin, a merchant platform that enables under-served SMEs in emerging markets to access the digital economy, has formed a partnership with Singapore-based insurance provider Gigacover. Under the partnership, small businesses on the yufin platform in the Philippines can access Gigacover health insurance products tailored to their needs at the touch of a button. In the future, they will also be able to access business protection and offer customized insurance products such as family and health insurance to their customers. yufin reveals it has exceeded 15,000 merchant signups since it was launched at the end May 2022. Mr. Shubhrendu Khoche, Chief Strategy & Product Officer of yufin, said, “Our partnership with Gigacover helps us bring insurance to last-mile merchants to give them peace of mind and to help them offer their customers much-needed access to insurance protection.” Ms. Chesca Figueroa, Gigacover’s country manager and partnerships lead in the Philippines, said, "With this partnership, we aim to further support yufin's efforts in financial education, planning, and protection to their respective small merchants." Estimates are that there are over a million small and micro-enterprises in the Philippines such as the iconic sari-sari convenience stores, often run by one or two people, many women. Less than 20% of these SMEs are estimated to have bank accounts while more than 80% have access to smartphones. The easy-to-use yufin app enables SMEs to manage transactions and payments providing a gateway to a suite of products and services that help them grow their businesses. Ms. Liz Servañez, head of business development and partnerships at yufin, said, “Many consumer goods like coffee and shampoo are sacheted to make them more accessible and affordable in markets such as the Philippines. “With partnerships such as our partnership with Gigacover, much-needed financial services products, like insurance protection can also be sacheted to make them accessible and affordable for the yufin merchant network and their customers.” Source: asiainsurancereview.com

China has set down a detailed implementation plan for private pensions, following the release of a guideline on pushing forward the development of private pensions to complement the nation's current pension system in April. The implementation plan was issued by five government departments: the CBIRC, the Ministry of Human Resources and Social Security, the Ministry of Finance, the State Taxation Administration, and the China Securities Regulatory Commission, reported Xinhua News Agency. It specifies the participation process, capital account management, the management of institutions and products, information disclosure, and supervision. Individuals can now make voluntary annual deposits of up to CNY12,000 ($1,653) into a pension account, and the funds can be used to purchase financial products that are of relatively low risk and have long-term investment horizons. Workers who currently contribute to China's basic pension insurance scheme can participate in the private pension scheme. The private scheme will complement the country's current pension system consisting of a basic old-age pension, enterprise annuities and commercial insurance for the elderly, offering another layer of support for the country's aging population. Source: asiainsurancereview.com

By Atty. Arthur C. Yap When PBBM declared a state of calamity last week due to the devastation wrought by Typhoon Paeng, it was in reaction to one of the most destructive typhoons our people had to face this year. More than 110 people had been declared dead with hundreds more missing and injured. Tens of thousands have also been displaced. Damage to infrastructure has breached more than a billion pesos with damages to agriculture and fisheries now at more than P3 billion, affecting more than 50,000 farmers. The fact that the Philippines is one of the world’s most climate change affected countries, with an average of more than 20 tropical cyclones annually, is one of the major challenges that we face as a people on our road to food security and sustainable rural livelihoods. With the destruction brought by these seasonal visitations a regular occurrence, what chance do we really have at increasing our food inventories? At this point in the life of an affected farmer, our national aspirations of food security are furthest from his mind. As he surveys the devastation around him, what is top of mind is saving what little possession he has. His roof may be partially or totally destroyed, along with the flimsy walls of his home. His assets, in the form of livestock, tools and beasts of burden may have perished or lost by now. What remains of his planted crops may be too meager to save if the crops can be saved at all. This is considering that his family has not had to relocate to an evacuation center. This is an all too familiar scene that is replayed many times annually. At the scale and regularity of these calamities, what is appropriated by the National Government Agencies (NGAs) will simply not be enough due to the national debt and the deficit. And even if funds are sufficient, the reality is that distribution is always marred by inefficiencies due to warring political sides on the ground. Farmers are usually at the crossfires. And the reality is, even with crop insurance, payouts go through a long and painful time of settlement. After a typhoon, it is common knowledge that the local community goes through at least a month of just cleaning up and getting back to where they were. It takes time for crop insurance adjusters to go to a site and validate losses. Upon getting to an affected site, it is impossible to evaluate the state of planting, the seeds or inputs used and other attendant losses. Almost always, the farmer just collects a small portion of what was insured. Not to take anything away from the Philippine Crop Insurance Corporation, which is the only entity in the country giving any level or modicum of crop insurance, the PCIC must not measure its accomplishments just on the number of pay-outs given to the most number of farmers. It must be measured on “timely” and “accurate” compensation for losses suffered by our farmers. Unfortunately, the tools at the disposal of the PCIC to do its job are just not there at this point in time. We are still issuing crop insurance policies on the basis of long-standing indemnity contracts. No payouts for non-verifiable losses. It is time for the PCIC to move away from traditional indemnity policies and into “Parametric Insurance” for farmers. Under a Parametric Insurance Policy, farmer-policyholders are insured against the occurrence of a specific event (like a typhoon or an earthquake), and paying a set amount based on the magnitude of that event. Here the payout is not based on actual losses. An example is paying out to a farmer P100,000 if a typhoon of signal number three parameters or an earthquake of certain parameters happens. In this case, when “parameters” regarding magnitude, level of tremor, wind speed, precipitation, water levels are breached: a payout happens. No arguments, no adjusters, no lengthy debates. The result is an earlier and faster settlement for losses for the farmer, which he can then use to restore his home and equipment, and gets him planting again. And that is what we want: more farmers getting back to planting again, instead of falling in line for “ayuda” or seeing the neighborhood 5/6 loan shark. Of course the parameters are all specified in the contract and to the extent that the parameters are breached, a corresponding amount of payout is issued. A third party, usually a government agency or a weather system monitoring entity, can be tasked with providing the information regarding each calamity so that a determination of whether or not parameters have been breached can be settled. PAGASA and the SARAI system of the DOST-PCAARRD are examples of third party agents that can give on-line decision-support tools for crop risk and crop insurance services. The SARAI system is capable of providing weather monitoring, advisories and even plant health assessments on the basis of satellite coverage services. There are even foreign groups today that are just waiting to see whether or not the Philippines can roll out a national parametric insurance system, before financing entities and social impact groups pump in funds for crop production and agricultural modernization straight to farmers and farmers groups. Satellite services are now much more affordable and insurance companies all over the world are using these technologies and innovations to offer better products to stakeholders. We cannot be said to be unaware of Parametric Insurance because in 2017, under the leadership of the Bureau of the Treasury, the national government started a trial program with the World Bank. This program, which included the GSIS, was meant to provide rapid liquidity to 25 provincial LGUs in the event of typhoons and earthquakes. From 2017 to 2019, the combined coverage for damages was in excess of P30 billion on premiums paid for by the BTr at P3 billion and insured with the GSIS. The World Bank re-insured the policies and retroceeded them in turn, to international re-insurers. According to the World Bank Report commissioned thereafter, the loss ratio was less than 50 percent proving that even should this rise, the system would be sustainable in the coming years. What was most impressive was the payouts, which were completed in 6 weeks. We are now ready to move to phase 2 of this program. Lessons learned have been documented and scaling up to insure critical government infrastructures, including school buildings, can now follow. With Parametric Insurance, the national budget can be protected from unprogrammed allocations brought about by calamities that visit us regularly. This is possible because “risks” are distributed not only among local players, but can even be re-insured with international re-insurance companies, as we did during our trial run with the World Bank. Moreover, payouts can be done quickly, efficiently and painlessly, avoiding political hazards during funds distribution. We must realize that the resources are just lying around us. The Agriculture and Credit Policy Council regularly dispenses close to P2 billion in loans per year, the PCIC about P4 billion in insurance coverage, and the Agriculture Guarantee Fund Pool, a program started in 2008 that saw GOCCs set aside funds for food production, now stands at P8 billion and is now managed by PHILGUARANTEE. If these funds are just structured properly with a Parametric Insurance component, we will now invite global finance and re-insurance into funding Philippine agriculture, not just in the hundreds of millions, but in the billions of pesos. Impoverished African states are already on Parametric Insurance and there is no reason why the Philippines cannot scale this up. This may just open the door to greater direct farmer funding in the coming years and answer the challenge to greater farm productivity. The author was Secretary of Agriculture from 2004 to 2010, Member of Congress from 2010 to 2019, and Bohol Governor from 2019 to 2022. Source: businessmirror.com.ph

South Korea's financial regulator is seeking to temporarily relax regulations in the country's insurance industry, in a bid to prevent insurers from selling bonds. The goal is to stabilize the country’s money market, reported Pulse, which is part of Maeil Business News. Under measures announced by the Financial Services Commission and Financial Supervisory Service after a meeting with life insurers, insurance companies’ liquidity index evaluation rating will be upgraded by one notch in their risk assessment and application system (RAAS) evaluation until the end of this year. An insurer with a second-grade evaluation rating will be moved up to first grade and one with fifth grade to fourth grade. The regulator will also temporarily allow insurers to include assets with a maturity of more than three months like bonds that are immediately cashable as liquidity assets. Currently, assets of under three-month maturity are regarded as liquidity. In response to this, insurance companies should refrain from selling bonds and cooperate with the government to stabilize the money market as institutional investors, the financial authority urged. The financial authority has decided to relax regulations in the insurance industry as life insurers face rising capital strain. It has also become harder for insurers to raise funds after Heungkuk Life Insurance’s decision to postpone exercising a call option, originally scheduled on 9 November, for its dollar-denominated perpetual note worth $500m. Heungkok Life's decision, announced on 1 November, has heightened volatility in the debt market. Insurers find themselves in need of more cash to cover increasing insurance cancellation requests by policyholders seeking to move money to banks for higher interest rates but the lack of financial facilities has forced them to sell bonds to raise funds. Life insurance companies reported a net purchase of KRW3.9tn worth of bonds in August, but they turned into net bond sellers in October to the tune of KRW2.1tn. Source: asiainsurancereview.com

The IRDAI is engaged in discussions with the government to ease the INR1bn ($12.2m) minimum capital requirement for new insurers. It also asks that the industry regulator be allowed to determine the amount of capital depending upon the business plans of the prospective insurers. "The regulator can frame regulations based on the size of the company that the promoters are going to set up. For a microinsurance company, it may be X amount, regional companies operating in a bigger larger geography could be Y amount," IRDAI chairman Debasish Panda told Press Trust of India (PTI) in an interview. The objective is to enable entry into the Indian market of small, specialized, and niche players, which would help in increased insurance penetration and density in the country, reported PTI. "Like in the banking system, we have microfinance institutions, regional banks, and small finance banks. So, we have all categories of banks. Then there are non-banking financial companies. In the insurance sector also, we should have different-sized players come into the market so that they can operate in smaller geographies," Mr. Panda said. Source: asiainsurancereview.com