Drivers of commercial electric vehicles in Japan will soon have new insurance covers available for issues connected with their vehicles. Manufacturer of trucks and buses, Mitsubishi Fuso Truck and Bus (FUSO) in collaboration with Tokio Marine & Nichido Fire Insurance will launch the new product soon. The new insurance policy is aimed at helping out truckers if their vehicles run out of power while delivering cargo. The policy will cover the cost of alternative transportation. The cover will be mainly available to freight carriers leasing Mitsubishi Fuso's EV trucks to be launched early next year. It will pay up to around $340 for one claim a year during the leasing period. FUSO head of customer service Ohbora Wataru said, "Many drivers are apprehensive when driving EV trucks that are totally new to them. We hope our effort will help ease their concerns." Industry sources say the insurance policy is the first insurance cover of its kind in Japan. Another product on similar lines by Mitsui Sumitomo Insurance caters to providers of EV car-sharing services. It covers repair costs if charging facilities managed by policy holders are damaged. It also pays the expense of having to use alternative stations. Source: asiainsurancereview.com

The Saudi Central Bank (SAMA) has issued a circular directing the implementation of a new reinsurance cession mechanism in the local market. The mandatory cessions, with effect from 1 January 2023, will be at least 20% in 2023, 25% in 2024, and 30% in 2025, for all reinsurance treaties (proportional and non-proportional). The objective is to increase the insurance sector’s contribution to the local market in covering risks. In a statement lodged with the Saudi stock exchange Tadawul, Saudi Re — the only locally incorporated reinsurer in the Saudi market — says that the new regulation would increase the company’s written premiums from the Saudi market by more than 5% of the total GWP (based on 2021 financial-year results). The reinsurer expects the positive impact of the SAMA decision to start to be shown in the financial results of the company in the first quarter of 2023. Mr. Fahad Al-Hesni, managing director and CEO of Saudi Re, told the local media that the new requirement will enable the Saudi market to increase the retention of insurance premiums locally, reinvest them locally, and reduce dependence on foreign markets. "This enhances the sector’s contribution to the GDP in addition to creating additional job opportunities in the insurance sector,” he added. Commenting on Saudi Re, he said, "The company has succeeded in expanding to global markets and has achieved a presence in more than 40 markets, but the Saudi market is the main market for the company, from which it derives a competitive advantage as it specializes in reinsurance in the Kingdom." He said that the cession mechanism would enhance the opportunities for the company's expansion abroad because of the boost given by the comparative advantages the reinsurer enjoys in the Saudi market. Source: meinsurancereview.com

Regional InsurTech Igloo, in partnership with non-life insurance leader PVI Insurance, Vietnam Meteorological and Hydrological Administration (VNMHA) and global reinsurer SCOR, has launched Vietnam's first weather index insurance -? a blockchain-based parametric product that automates insurance claims of rice farmers. Vietnam is among the top five rice exporters in the world, with 95% of its exports produced in the Mekong Delta region. However, food production is challenged by severe climate conditions such as floods and shifting rainfall patterns that lead to loss of yield for paddy farmers. It is estimated that a 1% increase in insurance penetration helps reduce disaster recovery expenditure by almost 22%. Agri-insurance product development and distribution is impacted by low awareness amongst the farming community, challenging distribution economics and regulatory frameworks. Considering the above challenges and the opportunities at stake, Igloo with its end-to-end InsurTech capability has tried to create the most optimal value chain supported by ecosystem enablers to deliver agri-insurance at scale. With underwriting support from PVI & SCOR, Igloo utilized blockchain technology to develop a Weather Index Insurance that automates claims through the use of smart contracts. At an affordable premium starting from $8/hectare, with a minimum coverage area of 0.1 hectare, the product protects farmers against irregular rainfall distribution. With rainfall data collected from VNMHA and monitored by Igloo, the parametric insurance will pay out claims calculated using pre-assigned values for losses due to weather events or natural calamities. It will also eliminate the need to individually verify claims thereby reducing transaction costs and enabling faster payouts to farmers. The business rules governing claims payout being hosted on a public blockchain help leverage the attributes of transparency, consistency and unbiasedness thereby making the setup credible. Acreage covered to be expanded Tri Nguyen, Igloo's country manager for Vietnam, said, “Having covered more than 5,000 hectares, we are targeting to cover 50,000 hectares over the next couple of seasons in collaboration with public-private enterprises.” In the current phase, the insurance plan offers automated claims in eight provinces in the Mekong Delta region in South Vietnam. The insurance is underwritten by PVI Insurance, Vietnam’s top general insurer, and is currently distributed via Igloo’s intermediary services platform —? Ignite. SCOR is the reinsurer partner having demonstrated a pedigree in financial and technical capacity for weather-based insurance products around the world. Raunak Mehta, co-founder and CEO of Igloo, said, “Given its high potential for scalability, we look forward to expanding this insurance solution to cover more agricultural communities and take it to other parts of Southeast Asia in the near future.” Igloo is the first full-stack InsurTech firm to emerge from Singapore. It has offices in Singapore, Indonesia, Thailand, The Philippines, Vietnam and Malaysia and tech centres in India and China. Source: asiainsurancereview.com

The outlook for the reinsurance industry in Asia remains positive, Mr. Alvin Tan, Minister of State, Ministry of Trade and Industry and a board member of the Monetary Authority of Singapore, has highlighted. In his speech at the opening of the 2022 Singapore International Reinsurance Conference on 31 October, he cited reasons for the favourable outlook. Asia continues to urbanize, the middle class is growing, and Asia is consuming and producing more. In 2025, gross written premiums for life and non-life insurance are expected to grow to S$60bn ($42.4bn) and S$20bn respectively. Reinsurance sector in Singapore The growth trend in Asia will benefit Singapore’s insurance industry, given the city state's role as a key reinsurance centre for the region, Mr. Tan said. Indeed, in the past five years, total reinsurance premiums more than doubled to S$20bn in 2021. Mr. Tan attributed this growth to the industry’s vote of confidence in Singapore. Since 2017, reinsurers have progressively developed their Asia-Pacific functions in Singapore to better support the region’s insurance markets and provide risk financing solutions. Reinsurers have also established strong partnerships with local and regional insurers, to produce more accurate risk assessments, support underwriting and pricing, and improve customer value propositions. Singapore continues to be an important specialty insurance hub for Asia. Singapore has started to grow capabilities in newer lines of risk, in particular, cyber. While cyber insurance remains a nascent market in Asia as compared to Europe and North America, more insurers are establishing cyber underwriting desks and resources for Asia in Singapore. Singapore is established as a domicile for Insurance-Linked Securities (ILS). To date, Singapore has supported 22 ILS in the form of catastrophe bond issuances, by cedants across US and Asia-Pacific. Key strategies Mr. Tan stressed that in order to support the risk transfer needs of Asia amidst heightened uncertainty worldwide, Singapore must continue to grow capabilities in Asian insurance and risk transfer, and catalyze insurance risk advisory and risk transfer solutions for the region. To this end, three key strategies are adopted: Growing Singapore as a risk financing centre for systemic and structural risks in Asia. Growing Singapore as a hub for alternative risk transfer solutions in Asia Transforming insurers into digital and tech champions Risk financing centre for systemic and structural risks in Asia Singapore already has a good base of local and global life, health and retirement insurers and reinsurers. Singapore will continue to build on existing strengths to support the growth of new revenue streams. These include risk advisory, strategy, and consulting capabilities. Insurers are also adopting an ecosystem approach, by partnering firms from adjacent sectors, such as technology, wellness, and clinical sectors. This allows insurers to roll out more comprehensive programmes that ensure better risk outcomes. Singapore will also embed deep capabilities in newer lines of risk, including pandemic, climate and cyber risks. The current challenges lie in a lack of established risk assessment and modelling data to support risk quantification, pricing and development of solutions. However, the Global-Asia Insurance Partnership (GAIP) aims to address these data gaps. GAIP will focus on mortality projections and morbidity implications for COVID-19 as an endemic risk in Asia, developing a pandemic risk database, and exploring COVID-19’s impact on life and retirement insurance. The insurance industry can also support the development of climate solutions in Singapore. Given the high risks from early-stage start-ups or tech for climate mitigation, insurers can support net-zero technology innovation through underwriting. In parallel, MAS is also progressively integrating environmental risk into its supervisory framework and processes, at both the individual firm and system-wide levels. Hub for alternative risk transfer solutions in Asia The second strategy includes growing capabilities in risk pooling arrangements and in ILS, to complement capabilities in reinsurance and fund management. Mr. Tan pointed out that Singapore has had success in facilitating the issuances of catastrophe bonds. The next aim is to allow cedants to be able to issue a broader spectrum of ILS. This includes sidecars, and collateralized reinsurance arrangements. MAS would like to work with the industry and experts to co-develop a comprehensive outcome. Helping insurers digitalize Singapore will continue to support insurers in ramping up digitalization, data analytics and innovation efforts. The COVID pandemic has sped up insurers’ digital transformation plans, especially in consumer-facing aspects such as distribution channels, customer service and claims. Singapore wants to continue this momentum and encourage insurers to take their digital transformation one step further – to update their mid-and back-office operations. Insurers can tap into Singapore’s FinTech ecosystem to support their digital transformation. Today, Singapore houses over 40 innovation labs by global institutions. Singapore also has one of the region’s largest concentrations of InsurTechs, with about 80 firms located in Singapore. Source: asiainsurancereview.com

Insurance composite pricing in the third quarter of 2022 in Asia increased by 2%, down from 3% in the prior two quarters, according to a report released by leading global insurance broker Marsh. The report, titled "Global insurance markets Q3 2022: Financial and professional lines pricing declines", notes the following about pricing in Asia during the quarter: Property insurance pricing rose 2%, the sixteenth consecutive quarter of increases, which peaked at 18% in the third quarter of 2020. • Clients with challenging claims experience or those requiring support from facultative markets continued to see above-average rate increases. • Natural catastrophe capacity continued to drive pricing that was above the average. • Global inflation remained a concern for insurers, with continued focus on the appropriate declaration of declared values. • The political violence (PV) market showed signs of contraction, with insurers carefully reviewing their aggregate exposures and pricing adequacy. Casualty insurance pricing was flat for the second consecutive quarter. • Renewal results favoured clients with exemplary claims performance and strong risk management practices. • Insurers continued to be selective in deploying capacity on challenged industry segments, including product recall and product liability exposure in North America. • Auto and workers’ compensation renewals experienced decreasing rates in a number of territories, while holding stable in others. • Insurers placed more focus on reviewing and updating policy wordings, ensuring the application of updated sanctions clauses and exclusions associated with PFAS, cyber, terrorism, punitive damages, and contractual liability. • Insurers took a stronger position on their ESG requirements, with some reducing or withdrawing their support based on the strength of the client’s commitment and practices. Financial and professional lines pricing increased 5%, down from 13% in the prior quarter. • The pace of rate increases for D&O continued to moderate, with pricing in the range of 5% to 10% across Asia. – Increases were typically higher for US listed/ exposed business. • Pricing began to moderate for FIs; for large/complex accounts pricing was nearly flat. • Professional indemnity (PI) insurers were keen to explore smaller organizations, with customized offerings at competitive rates. – Some large and/or complex PI programmes, especially from the communications, media and technology (CMT) sector, experienced average rate increases ranging from 5% to 10%, due to blended program structures with cyber coverages. • Insurers demonstrated caution regarding digital-asset related companies due to systemic risks resulting in volatility in asset pricing that can lead to sharp decreases in value, and potential liquidations. Cyber insurance remained challenging, with rate increases of 25% or more experienced by some clients. • Concerns continued regarding claims, systemic risk, geopolitical tensions, and ransomware. • As in other regions, there were signs in the quarter that the cyber insurance market is stabilizing. By region, composite pricing increases for the third quarter were as follows: UK: 7% Continental Europe: 6% US: 5% Latin America and the Caribbean: 5% Pacific: 5% Asia: 2%. Source: asiainsurancereview.com

The reinsurance sector in the Asia-Pacific is facing increasing downside risks amid global headwinds, says S&P Global Ratings. In a report titled "Asia-Pacific Reinsurance Sector Update: Volatility Ahead For Risks And Returns" released yesterday, S&P made the following observations: • Underinsurance, anticipated rate hikes, and diversification lead to moderate growth prospects for premiums. • Reinsurers’ earnings face pressure from subdued underwriting results and declining investment margins. This is due to ongoing market volatility, rising inflationary pressures, and ever-rising natural disaster claims that will dent earnings potential over the next two years. • Healthy capital levels (Total Asset to Capital) should remain intact prospectively amid market swings and the impact of fair value losses on shareholders’ equity. • Catastrophe risk remains lower for the region compared with global reinsurers; however, increased frequency should push up costs and demand for catastrophe protection. Reinsurers Based on S&P's analysis of 15 Asia-Pacific reinsurers, slower growth and subdued underwriting margins signal increasing downside risks for the sector. Almost half of the analyzed reinsurers reported higher combined ratios and lower returns on equity at the end of 2021. The stable outlook for the majority of S&P-rated reinsurers (i.e. four of six) typically reflects strong dominance in home markets and generally healthy capitalization, amid likely contraction in earnings over the next two years. Source: asiainsurancereview.com

India suffered an income loss of $159bn or 5.4% of its gross domestic product, in the service, manufacturing, agriculture and construction sectors due to extreme heat in 2021 according to a new report. The Climate Transparency Report 2022 compiled by Climate Transparency organization revealed that heat exposure in the country led to the loss of 16bn potential labour hours, a 39% increase from 1990-1999. Climate Transparency is an international partnership of 16 partner organizations from G20 countries working in the area of climate change and global warming. The report says labour productivity in India is projected to decline by 5% from the 1986-2006 reference period if global temperatures increase by 1.5°C. This decline will be 2.1 times more if the global temperatures increase by 2.5°C and 2.7 times more at a 3°C scenario. According to the report between 2016–2021, extreme events such as cyclones, flash floods, floods, and landslides caused damage to crops in over 36m hectares, a $3.75bn loss for farmers in the country. The annual damage from river flooding in the country is likely to increase by around 49% at 1.5°C of warming. The damage from cyclones will increase by 5.7%. The rainfall pattern in India has changed in the past 30 years, impacting many economic activities such as agriculture, forestry and fisheries. “Snowfall in India is expected to decrease under 1.5°C scenario by 13% when compared with the reference period’s snowfall levels. At 3°C of warming, the decrease is expected to be 2.4 times the 1.5°C scenario.” The Earth’s global surface temperature has increased by around 1.1° C compared with the average in 1850-1900. Source: asiainsurancereview.com

Insular Life (InLife), the largest Filipino-owned life insurance company in the Philippines, is entering into a joint venture agreement with Oona Philippines Holding Corporation to jointly own stakes in the general insurer, Mapfre Insular Insurance Corporation (MIIC). Oona Philippines is a subsidiary of Oona Singapore, which aims to become a regional digital general insurance platform in Southeast Asia. Oona Singapore is backed by Warburg Pincus (WP), a global private equity firm and a leading global growth investor. IInLife is raising its stake in MIIC from 25% to 40%, while Oona shall acquire the remaining 60% stake in the general insurer. InLife’s erstwhile partner in MIIC, Mapfre Internacional of Spain (Mapfre), has decided to exit its business interests in Asia, including the Philippines. With Mapfre’s exit, InLife is increasing its stake in MIIC. InLife's executive chairperson Ms. Nina Aguas said in a statement, “We attracted a significant investor for our non-life businesses. InLife’s focused execution, strong and tested brand, and wide network were attractions to Oona. The joint venture will allow our current and future distribution channels to scale up and provide stronger and better general insurance products delivered using technology. "The complementary strengths of both companies will propel both companies to leadership positions in providing relevant and timely solutions to the current and evolving needs of our markets. This will give us more arsenal to pursue our growth trajectory for our non-life businesses as we become stronger players in the digital economy.” Mr. Abhisek Bhatia, Group CEO of Oona, said of its partnership with InLife, “Together, we will build the leading digital general insurer in the country. Our shared values of customer first and digital enablement will drive future growth for the business.” According to Ms Aguas, this joint venture has been approved by the Insurance Commission. MIIC is part of a $350-m acquisition by New York-based private equity firm Warburg Pincus. The American investor is acquiring MIIC along with Asuranci Bina Dana Arta (ABDA) in Indonesia. Both are to be rebranded as Oona and be part of the regional digital general insurance platform. Source: asiainsurancereview.com

Cyber criminals and hackers keep coming up with 'innovative' new ways to strip clients of their privacy, assets and data. Another new tactic, Intermittent encryption, is now emerging in the area of cyber crime. According to a blog Intermittent encryption: The newest threat to cyber security by Munich Re Specialty Insurance (UK) (NMU) intermittent encryption is an emerging ransomware tactic, that follows a scattergun approach, where hackers use intermittent encryption to cause maximum damage in as short a time as possible. Intermittent encryption involves encrypting only fragments of victims’ files instead of encrypting entire files. This seemingly random but clinical, calculated approach makes it much more difficult for threat detection tools to recognize an attack. This is due to partially encrypted files looking very similar to unaffected files. The ransom demand could be the first a victim knows of a breach. So, the damage can be stealthy, swift and brutal. It is clear that new techniques being used by cyber criminals, such as intermittent encryption, underline how quickly the cyber threat landscape is developing and why cyber security alone is not enough anymore. The blog says that as always, the strongest and weakest links in a business’ armoury is human error and social engineering fraud. These are still the most frequent in terms of claims volume. Hence, the best strategy is to invest time to train and educate workforce on the signs of cyber crime and how they can individually play a role in preventing a cyber breach from happening. For example, not forgetting to verbally double check bank details for payment requests. Source: asiainsurancereview.com