Speaker: Mr. Michael F. Rellosa - Executive Director - PIRA Ms. Melinda Natividad

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There is an increasing need for the insurance industry to share case studies from neighbouring countries/regions on how they respond to society's needs, such as sustainable development, and allocate their resources accordingly, says Mr. Masayuki Tanaka, the general secretary of East Asian Insurance Congress (EAIC) and managing director of the Foundation for the Advancement of Life and Insurance Around the World (FALIA). He makes this comment in a message to mark East Asian Insurance Day which falls today (18 October). This date is symbolic because this was when the first EAIC was held in Tokyo in 1962 and when it was designated East Asian Insurance Day in 2006. 60th-anniversary virtual conference In his message, Mr. Tanaka gives a brief outline of the happenings behind the scene that led to the staging in September of a virtual event to mark the 60th anniversary of the EAIC. He says that in recent years, the EAIC had to postpone its biennial conference due to the COVID-19 pandemic. The 30th EAIC in Seoul, which was scheduled for 2020 and was postponed to 2022, could not be held this year again. Under such circumstances for the insurance industry, Mr. Allan Santos, EAIC president (2018-2022), suggested that a commemorative event be held online this year to mark the 60th anniversary of the EAIC. His proposal was adopted and under his strong leadership, the EAIC held an online conference to mark the Diamond Jubilee and to reach out to the public with messages about future prospects for insurance. This move was also supported by the network and website of the regional insurance publication Asian Insurance Review, the official media partner of the EAIC. The three cities of Manila, Tokyo, and Hong Kong took the lead in preparing the conference by associating the Diamond Jubilee with the four characteristics of a diamond (cut, colour, clarity, and carat) so as to depict the future of the insurance industry. They also worked on inviting speakers and panelists from various countries/regions who could discuss the outlook for the insurance industry over the next 40 years. The EAIC conference was held virtually on 21-22 September. Various presentations and panel discussions were held. As a significant feature of the EAIC, the discussions involved the overall insurance industry, including life insurance, non-life insurance, and reinsurance. The EAIC was able too to continue its traditional cultural exchange, through cultural performances screened during the online conference. EAIC 2024 and 2026 As for after the Diamond Jubilee, Mr. Tanaka says that the EAIC conference is on track again with Hong Kong agreeing to host the 2024 event, while the 2026 conference is scheduled to be held in Tokyo in 2026. In the future, it will become extremely important for neighbouring countries/regions in Asia to further exchange information during the EAIC, he says. He ends his message, wishing, "I sincerely hope that East Asian Insurance Day, 18 October, becomes more widely known, insurance literacy in each country will deepen accordingly, and this will contribute to the development of the entire Asian region." Source: asiainsurancereview.com

As part of the activities of the Insurance Consciousness Week celebration, the Philippine Non-Life Insurance Industry, through its Associations, the Philippine Insurers and Reinsurers Association (PIRA), Philippine Insurers Club (PIC) and the Insurance Institute for Asia and the Pacific (IIAP) supports the Philippine Crusade for the Defense of Christian Civilization through its "The Philippines Needs Fatima Campaign" in a Public Rosary Campaign Rally held at the Washington Sycip Park in Legazpi Village, Makati City, October 16, 2022.

Inclusive Insurance Markets ​in Asia October 14, 2022, from 4:00-7:30PM at the New Coast Hotel

The insurance sector in China is one of the most exposed to the rising frequency of extreme events and Fitch Ratings expects insurance claims to cover an increasing portion of economic losses from natural disasters. According to Swiss Re, insured catastrophe losses totalled around 10% of economic losses from natural disasters in China, a proportion that is much higher than in developed western markets such as North America. The increasing use of agricultural insurance, aided by supportive government policies and local government subsidies, has mitigated the impact on the agricultural sector. Government subsidies cover 55%-90% of premiums on agricultural insurance, reducing farmers’ vulnerability to severely adverse conditions. In addition, the central government established a new state-owned reinsurance company, China Agricultural Reinsurance Corporation, in 2H2020 to promote insurance coverage in the agricultural sector. This is in addition to central reserve funds that the government often allocates in response to major natural disasters. For example, the central government earmarked CNY10bn ($1.4bn) in late August to relieve the recent drought and support autumn grain production. Local governments are then responsible for allocating the funds to farmers. Supportive government measures, including government-subsidized reinsurance coverage, will mitigate Fitch-rated insurers’ exposure to higher environmental risk, in the global credit rating agency's view. The regulator also encourages Chinese insurers to issue offshore catastrophe bonds, which Fitch believes would help to diversify losses from natural calamities. Disaster mitigation Fitch points out that the government has provided aid on multiple fronts, including pre-emptive measures, post-disaster recovery, and emergency policy response during natural disasters in recent years, with research from the World Bank projecting an increase in warming leading to a greater probability of hazards such as droughts, floods, and heatwaves. Policymakers utilize banks, especially large state-owned and policy banks, to support post-disaster relief and recovery. Chinese banks made CNY83.1bn in incremental loans in 2021 to support the post-disaster recovery of basic infrastructure, business operations, and agricultural activities. They also provided debt relief for CNY21.2bn of credit and extended CNY21.0bn in contingent emergency loans. The lending may have higher asset-quality risks, but we expect the credit volume to remain a small share of total lending. Their public-policy role also reinforces our expectation of extraordinary state support for the large state-owned and policy banks, if needed. Fitch says the likelihood of Chinese issuers facing a greater credit impact from extreme events could rise if economic growth decelerates over a prolonged period, raising fiscal pressure across local governments and limiting their capacity to focus on spending categories that seem less imperative in the short run, such as investment in climate resilience. Source: asiainsurancereview.com

A report by Verisk Extreme Event Solutions estimates that on an annual average basis, catastrophes around the world are expected to cause about $123bn in insured losses compared to an average of $74bn in actual losses over the past 10 years. The 2022 Global Modelled Catastrophe Losses Report details major global financial loss metrics based on Verisk’s latest suite of catastrophe models, which generate an industry exceedance probability (EP) curve that helps put years with high insured losses – like 2011 and 2017 - into context. Verisk Extreme Event Solutions president Bill Churney said that the most significant factor driving increased catastrophe losses over the past few years is the rise in exposure values and replacement costs. Both are represented by continued construction in high-hazard areas as well as high levels of inflation that are driving up repair and rebuild costs. “For this reason, it’s important for insurers to regularly reassess their exposures, particularly in the most vulnerable urban and coastal areas. Updating the property replacement values used in catastrophe modelling and other processes helps to ensure a more informed view of risk,” he said. It is also important to consider the uncertainty and natural variability associated with global catastrophe losses. The current five-year actual loss period has immediately followed a 10-year period of lower levels of loss highlighted by fewer loss-causing hurricanes in the Atlantic basin. Far larger years of insured losses can and will likely occur in today’s climatic conditions, and while climate change is contributing to increased catastrophe losses, it is to a lesser degree than the growth in the number and value of exposed properties. Verisk’s models estimate a more than 40% chance of experiencing a five-year average loss in excess of $100bn, meaning the last five years should not be viewed as out of the ordinary. Also, the models show at least a 50% chance of experiencing a single year in the next decade with insured losses in excess of $200bn. Source: asiainsurancereview.com

Hospitals and infrastructure including electricity, gas and water utilities are the most at risk according to a new report by the ratings agency Moody's. The rating agency said the $22tn global debt rated by it has a ‘high’ or ‘very high’ exposure to the risk of cyber attack. The rating agency monitors 71 sectors and the entire lot is valued at $80tn. Analysis revealed that hospitals and utilities are seen as the greatest risks. These two sectors, hospitals and utilities garner more than a quarter (28%) and are the two highest risk brackets. This constitutes a rise of about $2tn from the previous study conducted by the rating agency in 2019. The scores took into account the risk of exposure to hacks and mitigation measures taken. The report said, “We view not-for-profit hospitals as being highly attractive, data-rich targets with average mitigation measures in place to reduce the impact of a potential cyber event.” The rating agency said its findings were not related to any credit rating actions and that most cyber attacks were not material enough to affect issuers’ ratings. The report said sectors significantly relying on data are the most attractive targets for cyber attacks. Moody’s said that cyber-related risk was rising, but that there had also been an increase in investment in security measures to counter that risk. A research study in 2021 by Cybersecurity Ventures had found that online criminal activity cost the world about $6tn. The study found that by 2025, such crimes are expected to cost the world about $10.5tn, up 250% from $3tn in 2015. Source: asiainsurancereview.com

The insurance industry has already released almost PHP20.82bn ($353m) in total COVID payouts to policyholders who were infected by the virus from the start of the pandemic in March 2020 until end-June this year, according to data from the Insurance Commission (IC). The newspaper The Philippine Star, citing the IC, reported that the breakdown of the total PHP20.8bn paid out was as follows: PHP11.72bn by life insurers, PHP7.65bn by health maintenance organizations (HMOs), PHP897m by mutual benefit associations (MBAs), and PHP560m by non-life insurers. The IC says the insurance industry remains stable as growth parameters showed positive performance year-on-year. In the second quarter of 2022 alone, COVID-related payouts made by life and non-life insurers, health maintenance organizations (HMOs), and mutual benefit associations (MBAs) reached PHP1.18bn. By type, a little over 70% of the second quarter payouts or PHP842m were paid to beneficiaries of policyholders who died from the virus. To read the original article, please click here. Source: asiainsurancereview.com