Are you ready to join this year’s idea-filled Innovation Summit? KPMG in the Philippines (R.G. Manabat & Co.) hosts an annual, virtual, Innovation Summit for you to connect with subject matter experts, broaden your knowledge, and stay current on emerging technologies and trends. In this year's Innovation Summit, Tech Talk: Stories of Innovation, real-world business transformation stories will be highlighted and discussed. A dynamic business environment necessitates generating and operationalizing new and bold ideas to help companies adapt and thrive. Am I eligible to attend this summit? Any professional or enthusiast is more than welcome to join. Please feel free to invite your colleagues, friends and network. Registration is free of charge.

July 2022 kicked off with the annual National Disaster Resilience Month, with the theme “Sambayanang Pilipino, Nagkakaisa tungo sa Katatagan at Maunlad na Kinabukasan” with hashtags #NDRM2022 and #NagkakaisangSambayanan. In preparation for this, the National Disaster Risk Reduction and Management Council (NDRRMC) of the country released prior a memorandum which outlines “COVID-19 Preparedness Measurers for Rainy Season”. Per the website of the Office of Civil Defense (the implementing arm of the NDRRMC), the memo “stated measures such as activation of National Disaster Response Plan aligned with Inter-Agency Task Force for Emerging Infectious Diseases (IATF-EID) Resolutions and Guidelines and the DOH Guidelines on Risk Based Public Health Standards for COVID-19 Mitigation, the conduct of Pre-Disaster Risk Assessment and other related meetings via online, inventory of resources, checking of vital facilities, stockpiling of relief, and other essential logistical requirements, as well as implementation of health protocols during duty at the Emergency Operations Center.” LGUs were additionally given instructions to conduct thorough inventories of their specific list of evacuation centers which are not listed and used as quarantine facilities. Disaster Response Webinars were also launched by the Council, with series titled “Resilience Hours”. Together with the webinars are print and e-print materials launched, such as the #DRMPublicationSeries which includes the “Ready to Rebuild: Workbook and Training Manual”. The manual is mainly for the use of LGUs, which covers disaster rehabilitation steps and recovery activities and strategies to be implemented. The Publication Series was developed through the collaboration of the Council and the World Bank. Sources: https://ndrrmc.gov.ph/attachments/article/4180/NDRRMC_Memorandum_No_93_s_2022.pdf https://www.ocd.gov.ph/index.php/news/921-ndrrmc-gears-up-for-the-national-disaster-resilience-month-2022-observance https://www.facebook.com/NDRRMC https://www.facebook.com/civildefensePH

At around 4:30 in the afternoon 32 years ago, a magnitude 7.8 earthquake rocked Luzon. With a rumbling which lasted for around 45 seconds, an estimated casualty count of not less than 2,400 were recorded. According to the Philippine Institute of Volcanology and Seismology (PHIVOLCS), the quake’s trigger was an unprecedented movement in the northwest segment of the Philippine Fault Zone. Areas affected heavily spanned amongst the cities of Baguio, Agoo, and Dagupan. The city of Baguio was reduced to bubble, as it suffered tremendous damages to its tourist structures. These included the Nevada Hotel, the Baguio Hilltop Hotel, and Hyatt Terraces Plaza. Total cost of damage overall amounts to an estimated 369 Million US Dollars. Tara Lukasik, an editor for the International Code Council and the Building Safety Journal, wrote: “The earthquake left not just massive damage and casualties, but also lessons about disaster readiness. Philippine Institute of Volcanology and Seismology Director Dr. Renato Solidum said the 1990 earthquake left four valuable lessons: The public needs to respond properly during earthquakes. Hazards and their effects should be simulated. Building codes should be implemented properly. And land use should be carefully planned.” Sources: https://www.iccsafe.org/building-safety-journal/bsj-hits/remembering-the-1990-luzon-earthquake-that-wreaked-havoc-in-the-philippines/ https://www.phivolcs.dost.gov.ph/index.php/earthquake/destructive-earthquake-of-the-philippines/2-uncategorised/212-1990-july-16-ms7-9-luzon-earthquake

On behalf of the East Asian Insurance Congress committee, it is our pleasure to confirm Asia Insurance Review as event manager and sponsorship sales representative for the Diamond Anniversary Virtual Conference of the EAIC scheduled for the 21st – 22nd September 2022. As this is a milestone celebration of EAIC’s history and place in the insurance industry over the past 60 years, we look forward to your active support and participation as we put together a high-level programme. We are delighted to work hand-in-hand with Asia Insurance Review’s 31-year history of serving the market in celebrating and acknowledging this milestone event. The EAIC was founded in 1962 with the aim of furthering and developing international collaboration in the field of insurance. In line with the Diamond reference, the theme of the event will be “Cutting a Multi-Faceted Clear Vision for the Industry.” Please join us at our Diamond Anniversary virtual extravaganza. We look forward to seeing you at the event and welcome your valued support as a sponsor. For more information about the event and to register, click here.

A new analysis by UK parametric insurer FloodFlash has revealed in detail the flood risks facing businesses. According to the study the biggest risk may be one the businesses have not even considered. The 2022 Commercial Risk Report by the insurer provides an up to date view of the flood data and says that the average cost of flood damage in a commercial setting is around £80,000 ($95,875). Meanwhile a small business can lose up to 50 working days following a flood event, which clearly leads to a loss of custom and orders, puts shipments on hold and impacts organizational reputation deleteriously. Based on the analysis which was conducted for the businesses in Britain, the top five flood risk facts that the businesses simply cannot afford to ignore are: 1. 40% of small businesses close for good after catastrophic flooding. According to the analysis, 52% of small businesses say it would take at least three months to recover from a disaster but 90% of smaller companies fail within a year unless they can resume operations within five days following a disaster. 2. 27% of commercial properties are at risk from flooding, twice the rate of flood risk facing domestic properties. For around half of those business, the picture is even worse – 14.4% of commercial properties (one in eight) is subject to significant flood risk, while a total of 18% face a moderate risk. 3. Of the commercial properties at risk from flooding, 80% are at risk from surface water. Surface water flooding, or ‘flash flooding’ happens when intense localized rainfall quickly saturates the ground, preventing it from soaking away, and overwhelms drainage systems and the results can be catastrophic. 4. Retail and industrial properties make up over half of those facing flood risk. Retail is the most at risk sector, making up nearly one third (32.5%) of the commercial properties at risk and 58% of retail companies report that they don’t have comprehensive insurance cover for flooding in place. By contrast, while manufacturing, wholesaling, and logistics properties account for more than 20% of those at risk, 76% of these companies report that they do have comprehensive insurance, including flood cover. Office-based businesses represent the third most at risk sector, making up around 10% of those at risk – and, here, around half of those business say they are insured against flooding. 5. Nearly half of the businesses flooded in the past 10 years experienced a period of business disruption. The interruption of normal business operations is one of the most damaging aspects of a flood event. The study found that overall, just 35% have developed comprehensive flood resilience plans and less than half (42%) have in place the business interruption insurance that – with the right level of cover in place - can play a very vital role in strengthening flood resilience by helping the business to recover quickly, covering unexpected costs (from replacing equipment and stock to re-wiring and refitting), and replacing lost income. Source: asiainsurancereview.com

While the impact of the pandemic and conduct risk remains high on the risk agenda for insurers, the gross losses in operational risk are continuing to fall according to the latest ORX annual loss reporting figures. The latest ORX report reveals that operational risk losses reported by global insurance companies continued to fall in 2021 despite the challenging operating environment. The global loss figures report a decline in total gross loss across the insurance community. This is despite the challenging environment created by both external threats, including geopolitics, cyber risk, the economy, and internal developments, particularly as the industry moves to digitalize. In 2021 there were 1,155 operational risk loss events (submitted) totaling EUR522.8m ($530m) in gross loss. The lower total gross loss – with the exception of 2020, total gross loss has remained reasonably steady year on year since 2018. There was a significant spike in 2020 at EUR1.2bn due in part to coronavirus related losses, while 2021 saw the lowest gross loss since 2017. The average annual gross loss from 2016-2021 is EUR752m. Total number of events reduces slightly – the annual loss frequency was slightly lower in 2021 than the average for 2016-2021, with 326 fewer loss events submitted than in the previous year. Size of average risk loss event - the average size of an operational risk loss event in 2021 was EUR452,607. In 2020 the average size of a loss was almost double this at EUR823,232 due in part to large coronavirus losses as well as large events classified as ‘transaction, capture execution and maintenance’ which includes losses due to poor execution of regular business tasks for example accounting and data entry errors. The life business line experienced the largest proportion of total gross loss in 2021 (41%), whilst non-life business lines incurred 39%, corporate level losses 17% and asset management with 4% of the total gross loss. ORX director of research and information Steve Bishop said, “This year we’ve seen a significant reduction in gross loss. Given the levels of change facing global insurance and the turbulent external environment, it will be interesting to see if the reduction continues through 2022. “Next year’s results could well reflect a number of factors, including the impact from the Ukraine conflict, losses related to the increasing cyber security threat and to economic turbulence, in particular arising from supplier issues, conduct or external fraud,” said Mr Bishop. The onset of the pandemic has also altered the operational risk landscape and the risk profiles of financial institutions. In 2021, conduct risk remains a concern for insurers and an area of strong regulatory focus, not least because this risk type can cause large losses to financial institutions. 199 conduct events were reported in 2021, amounting to EUR182.6m gross loss. Source: asiainsurancereview.com

The 13th AYIM 2022 is back on site! The ASEAN School for Young Insurance Managers, or AYIM, is one of the initiatives under the ASEAN Insurance Education Committee, designed to develop promising, high-potential young ASEAN Insurance Managers into multi-faceted leaders with an integrated view of management fundamentals and a broad market vision to assume the cross-functional responsibilities expected of company and industry leaders. For more information download the eBrochure here.

By Herminia S. Jacinto THE Insurance Institute for Asia and the Pacific and Insurance Philippines held their 2nd Virtual Summit on June 22 and 23, 2022 with the theme "Climate Change — The Role of the Insurance Industry and the Public Sector." Climate change may seem to be a jaded topic in various forums, especially those conducted by the insurance industry. On the contrary, the topic is always relevant as it affects our daily existence. Typhoons, floods, earthquakes and volcanic eruptions are events that happen or may happen whether we like it or not. Invited to this summit were speakers representing global organizations and projects like the World Bank, the Earth Security Group and Project Oasis. Updates on local initiatives, both the public and private sector, were presented by speakers from the Climate Change Commission, the Department of Energy and Arise Philippines. I would have wanted to share with the readers some of the interesting and informative papers presented but since we have limited space, I will just highlight some of the valuable takeaways from their papers. Almost all speakers talked about the research and data analytics of the various events or disasters that were caused by climate change. Very useful information that will help people, governments and the private enterprises cope with these disasters, and look for the necessary protective mechanisms for themselves affected to recover from their losses. These organizations offer their assistance in research, loss analysis and estimation, development of insurance products and risk financing. An interesting topic to me (a longtime insurance person) was the topic "Insurance Underwriting with Nature" presented by Mr. Alejandro Litovsky, the founder and CEO of Earth Security. Their studies show that there are local protective measures that can be done to provide protection for disasters like typhoons and floods. That in the Philippines, mangroves are 50 times more cost-effective than building a concrete sea wall over a 15-year investment! The Philippines has many strategic places with mangroves and coral reefs that can prevent or reduce flooding. The experts advise that there should be programs that will protect and strengthen the ecological systems of the country. It may be worthwhile for all the insurance underwriters to visit the website of Earth Security and read their paper on Underwriting with Nature. Our Climate Change Commission should include these in their key projects and flagship actions which are food security, water security, and ecological and environmental stability. One speaker mentioned that disasters threaten public finance and power, and the way to go for some countries like the Philippines is through risk financing. There should be enough data to support the funding requirement and how the funds will be distributed if the assistance is given. They want to make sure the funds reach the intended beneficiaries. The LGUs (local government units), down to the barangay (village) level, can be the designated distribution system since they know the immediate requirements of their units better. The municipal and city governments should consider climate change as one of their regular functions and not rely solely on the provincial and national governments to take care of climate change-related issues and problems of their localities. Statistics all over the world show that there is a big gap between actual losses from catastrophes and insured losses. Initiatives by insurers and reinsurers include research and development of risk models and solutions. The Philippine National Reinsurance Corp. is now in collaboration with Project Oasis which intends to provide solutions and products to lessen the impact of climate change in the country through the use of risk assessment models and software. There is an abundance of solutions provided by experts in climate change globally. The challenge is how the Philippines can use these models that can be used to build its own infrastructure in risk protection. Climate change and its impact on the country's resources should be a priority item in the plans and programs of the new administration. Budget should be provided for an organized system of disseminating information to the local governments and make these accessible to every Filipino. Ted Torres, a veteran journalist, now semiretired but devoting more time to several advocacies, was at the summit and his reaction to the papers was: "We should declare a climate emergency to give it the attention it needs!" Source: manilatimes.net

Ang Personal Equity and Retirement Account o PERA, ay isang boluntaryong retirement account na maaaring buksan ng isang qualipikadong indibidwal. Kung ikaw ay Pilipinong may tax identification number o TIN at may kakayahang pumasok sa isang kontrata, maaari kang maging PERA contributor. May PERA digital platforms na kung saan maari nang magbukas ng PERA account at magtransact kahit kailan at kahit saan gamit ang computers, cellphones, tablets, at ibang gadgets. Para sa iba pang impormasyon bisitahin ang mga sumusunod: https://www.facebook.com/BangkoSentralngPilipinas/videos/3141618459281870/ https://www.bsp.gov.ph/SitePages/InclusiveFinance/InclusiveFinance.aspx#PE