More insurance companies are now geared toward complying with the PHP1.3bn ($23.6m) net-worth requirement under the Insurance Code as 31 December 2022 fast approaches, says Insurance Commissioner Dennis Funa. Based on quarterly Financial Reporting Framework (FRF) reports of licensed non-life insurance companies as of 30 September 2021, 23 out of 52 insurance companies are already compliant with the PHP1.3bn requirement. Of the remaining 29 non-life insurers, 17 companies have a net worth exceeding PHP1bn; three have a net worth exceeding PHP950m. Among life insurers, 19 out of thirty-one 31 already comply with the minimum capital requirement pf PHP1.3bn. Out of the remaining 12 life insurers, seven companies have a net worth exceeding PHP1bn, and two companies have a net worth exceeding PHP950m. Under the Insurance Code, insurance companies are required to add PHP400m to the prevailing minimum required capital of PHP900m by 31 December 2022. However, last month, local media reports said that the insurance industry has renewed its pleas to the Insurance Commission (IC) to postpone the mandated increase in their minimum capital of PHP1.3bn set for this yearend. Both the Philippine Insurers and Reinsurers Association (PIRA) and the Philippine Life Insurers' Association are urging the regulator to delay the increase in the minimum capital. Source: asiainsurancereview.com

A Singaporean insurance firm affiliated with the regional e-retailer Shopee has entered the Philippine insurance market after it acquired two licensed Philippine non-life insurance companies. The two insurers are AA Guaranty Assurance (Aaga) and Reliance Surety and Insurance (RSI), reported Business Mirror. The Insurance Commission (IC) has approved the acquisition of Aaga and RSI by SeaInsure PG, an insurance firm under tech conglomerate Sea Ltd, Shopee’s holding company. “Sea Limited’s entry into the Philippine insurance industry through SeaInsure’s acquisition of these two local insurers is a significant milestone to the development of the local digital insurance business and InsurTech,” Commissioner Dennis Funa said. SeaInsure acquired RSI in February this year and converted it from a non-life to a life insurance business. A new certificate of authority to transact life insurance business shall be sought from the regulator in line with the Insurance Code. Aaga has been rebranded as SeaInsure General Insurance (SeaInsure Philippines) and was launched as a digital insurance company after it was acquired by SeaInsure in February last year. SeaInsure Philippines has also been granted with a license by the IC, authorizing it to transact non-life insurance business. The IC said it approved last March the transfer of RSI’s non-life insurance portfolio to SeaInsure Philippines. Source: asiainsurancereview.com

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The National Reinsurance Corporation of the Philippines (Nat Re) is looking forward to new gains in 2022 on the back of improved economic prospects at home, brought about by the relaxation of COVID-related restrictions and a more robust life reinsurance segment. "We are optimistic of recapturing gains in light of the improving economic environment, while remaining mindful of ever-present natural disaster threats and geo-political risks at home and abroad,” said MR Allan R Santos, Nat Re president and CEO, in a statement. Following a robust 7.7% growth in the fourth quarter of 2021, the Philippine economy grew by 8.3% in the first quarter of 2022, with the main contributors being manufacturing, wholesale and retail trade, repair of motor vehicles and motorcycles, and transportation and storage, according to the Philippine Statistics Authority. This came amid various local and international headwinds, notably Typhoon Odette in December 2021, and the Ukraine-Russia war that began in early 2022, with the latter negatively fuelling inflation worldwide. “We have been providing claims processing support and guidance to our cedants affected by the typhoon. We also have reduced and continue to underweight our investments in equities while taking advantage of the increase in yields of fixed income securities, factoring in inflation in pricing and managing insurance coverages.” Mr Santos said. Meanwhile, AM Best, the world’s first credit rating agency, forecasts Nat Re’s underwriting in 2022 to be backed by a more streamlined portfolio and the company’s domestic life reinsurance segment. “AM Best expects the company’s prospective underwriting performance to be supported by ongoing portfolio remediation measures, including reduced participation or exiting from loss-making non-life treaties, as well as business growth in the more profitable domestic life reinsurance segment,” AM Best said in a press release on Nat Re’s credit ratings. Last June 2022, AM Best affirmed Nat Re’s B++ (Good) Financial Strength Rating and bbb Long-Term Issuer Credit Rating, with an outlook of 'Stable'. In addition to expected growth in the company’s life and health reinsurance businesses amid heightened awareness on the need for life and health insurance), Nat Re also expects to participate in the Philippine Catastrophe Insurance Facility (PCIF) launch this year. CAT facility The PCIF also aims to address the catastrophe insurance gap and create a more risk-appropriate rating environment to ensure sustainable catastrophe premium rates, among other goals. Through the PCIF, Nat Re helped to initiate a review of the minimum tariffs for earthquake and typhoon risks, which have not been updated for more than a decade. The new schedule of minimum tariffs, which were set to improve the sustainability of catastrophe insurance, will soon be implemented. Nat Re provides life and non-life reinsurance capacity, and in relation to this offers consultancy, technical, and advisory services to its clients—the direct insurers—in emerging markets. Source: asiainsurancereview.com

Climate change, if left unchecked, could cost the global economy $178tn over the next 50 years according to a report by Deloitte. Deloitte’s Global Turning Point report produced by the Deloitte Center for Sustainable Progress says by contrast, the global economy could gain $43tn over the next five decades by rapidly accelerating the transition to net-zero. The report finds that unchecked climate change could cost the global economy $178tn over the next 50 years, unless global leaders unite in a systemic net-zero transition. The report released in June 2022 is based on research conducted by the Deloitte Economics Institute and analyzed 15 geographies in Asia Pacific, Europe and the Americas. It reveals that if global leaders unite in a systemic net-zero transition, the global economy could see new five-decade gains of $43tn — a boost to global GDP of 3.8% in 2070. The report says if global warming reaches around 3°C toward the century’s end, the toll on human lives could be significant - disproportionately impacting the most vulnerable and leading to loss of productivity and employment, food and water scarcity, worsening health and well-being, and ushering in an overall lower standard of living globally. Deloitte Middle East CEO Mutasem Dajani said, “The numbers speak for themselves and businesses should be reimagining their practices to help build a more sustainable future for all. Taking small steps in the right direction will pay dividends in the future. It has become clear that if businesses do not priorities sustainability and understand the impact they are having on the environment, valuable talent, revenue and market share may be lost.” The report details four major stages for decarbonization globally: The public and private sectors unite, collaborating to build effective and foundational frameworks and policies to drive actionable change Business and governmental leaders make significant investment, sparking structural changes to the global economy that prioritize low-emissions industries and accelerate the transition to net-zero The world’s geographies approach their respective ‘turning points’ - when the benefits of a net-zero transition begin to outweigh the costs - and ultimately drive regional net-positive growth and value Following the turning point, society realizes a greener future—where interconnected, low-carbon systems underpin a clean economy that grows at an increasingly faster rate than its carbon-intensive alternative Deloitte Economics Institute faculty Pradeep Philip said, “We already have the technologies, business models, and policy approaches to simultaneously combat the climate crisis and unlock significant economic growth, but we need governments, businesses, and communities globally to align on a pathway toward a net-zero future.” Source: asiainsurancereview.com

The insurance industry is urging the Insurance Commission (IC) anew to postpone the mandated increase in their minimum capital set for this yearend, saying many companies are still far from meeting the higher requirement. Philippine Insurers and Reinsurers Association (PIRA) chairman Edgardo D. Rosario and Etiqa Philippines CEO and Philippine Life Insurers' Association President (PLIA), Mr. Rico T Bautista, urged the regulator to delay the increase, reported BusinessWorld. Insurance companies’ minimum capital requirement was increased to PHP900m ($16.5m) at the end of 2019 from PHP550m, and is to be raised to PHP1.3bn by end-2022, according to the Insurance Code. At the two-day Second Virtual Philippine Insurance Summit that ends today, PLIA’s Mr Bautista said, “It is the industry’s view that proceeding with the PHP1.3-bn level would make us disproportionately overcapitalized relative to our market size, as compared with our Association of Southeast Asian Nations counterparts.” He added that 12 companies or 38% of the insurance industry are at risk of being unable to meet this requirement. Among them, four are currently PHP275m to PHP488m short of the PHP1.3bn requirement. Mr. Bautista added that the funds to be used by insurers to meet the higher requirement could instead have been used on their digital transformation. Source: asiainsurancereview.com

UN assistant secretary-general for climate action, Mr Selwin Hart, has suggested what the insurance sector can do to cut emissions by half by 2030. Speaking at an event held on 19-21 June to mark the 10th anniversary of UNEP’s Principles for Sustainable Insurance Initiative (PSI), he told insurers, "I have three concrete asks of you: First, follow through on your net-zero pledges with ambitious and credible actions now and during the course of this make-it or break-it decade. 2050 and 2030 are too far into the future. We need decisive action and interim net-zero targets by 2025. And deliver strong and credible transition plans to link your long-term pledges with immediate action. "Second, what you invest in and where you invest matters. Stop investing in the coal industry, and stop underwriting new fossil fuel projects that contribute to the climate emergency. As of November 2021, institutional investors still held over $1.2tn in the coal industry. And close to 500 commercial banks channeled $1.2tn to coal mining, trading, transport, conversion of coal to liquids, coal-fired power stations, and manufacturing of equipment for new coal plants. "The secretary-general said it best: this madness needs to stop. Shift your investments to renewables and support the expansion of renewables in developing and emerging economies. These countries need access to cheaper and clean energy sources. And tell us how public sources of finance can be better used to leverage the trillions you own and manage. I also urge you to invest in adaptation and resilience building to protect lives and livelihoods. "Third, you have very powerful voices, wide influence and resources on a scale that can deliver change. Sitting on the sidelines and hedging your bets is no longer a viable option. I urge you to put these assets to work and send the loudest possible message to government decision-makers - both publicly and privately — that they must step up their climate ambition and actions." Mr Hart said, "Let me be frank. The world is way off track from limiting global warming to 1.5 degrees Celsius and preventing the worst impacts of the climate crisis. "Every indicator on climate is heading in the wrong direction. Global emissions are at their highest level in human history and continue to grow. The current national commitments made under the Paris Agreements by governments would result in an increase in global emissions of 14% by 2030, rather than the 45% decline science tell us is required this decade to be on a credible pathway to 1.5." He added, "The battle to keep 1.5 alive will be won or lost in this decade and with each passing day of inaction and insufficient action, the pulse of 1.5 gets weaker and weaker." He stressed, "The climate crisis is the greatest test of our age. The science is conclusive, the choices are clear, and the tools we need are all within our reach. Let’s pick up the toolbox and get to work." Source: asiainsurancereview.com

Concretely defined in Section 92 of the Insurance Act of the Philippines, marine insurance in the country pertains to the “insurance against risks connected with navigation, to which a ship, cargo, freightage, profits, or other insurable interest in movable property, may be exposed during a certain voyage or a fixed period of time”. Aiding assured safety of trade, this covers the insured’s properties and merchandise while being transported. The transport can be by sea, while some companies offer Marine/Cargo, which insures items transported also via land, or air. Types can range from inland marine (transportation of goods through Philippine railways), inter-island (by sea craft), import (items for entry from other countries to the Philippines), and export (items for transport from the Philippines to other countries). Perils may include natural disasters, explosions, piracy, and collision. Selected Philippine companies offer coverage upon collision, covering vessel equipment and mechanism. The Philippine Insurers and Reinsurers Association (PIRA) has renowned members offering Marine Insurance for cargo shipments. Should be interested, check the list of association members for full details. Source: https://www.chanrobles.com/actno2427.htm#.YrJ6UnZByMo

Given that the ASEAN 's economic resilience is threatened by resource depletion, unsustainable patterns of raw material consumption, and multiple inefficiencies throughout product value chains, and climate change, the ASEAN Economic Community (AEC) has adopted a framework for the eventual transformation of the AEC into a Circular Economy. PIRA has been invited to a roundtable discussion and the materials will be made available to our members. A trickle down session may be organized for interested members in which our ED can give an overview. JAKARTA, 21 October 2021 – ASEAN adopted the Framework for Circular Economy for the ASEAN Economic Community (AEC) at the 20th AEC Council Meeting held on 18 October. The Framework aims to guide ASEAN in achieving its long-term goals of a resilient economy, resource efficiency, and sustainable and inclusive growth. ASEAN’s transition towards circular economy hinges on five Strategic Priorities,: Standard Harmonization and Mutual Recognition of Circular Products and Services; Trade Openness and Trade Facilitation in Circular Goods and Services; Enhanced Role of Innovation, Digitalization, and Emerging/Green Technologies; Competitive Sustainable Finance and Innovative ESG Investments; and Efficient Use of Energy and Other Resources. Building on existing ASEAN initiatives, the Framework seeks to explore new opportunities and collaborations with other ASEAN pillars, Dialogue Partners, and the private sector, to scale-up and accelerate the region’s transition to low-carbon economy. The Framework is a priority economic deliverable under Brunei Darussalam’s 2021 ASEAN Chairmanship, and was developed by the ASEAN Secretariat in collaboration with the Economic Research Institute for ASEAN and East Asia (ERIA). Framework’s introductory video Download the following: Source: asean.org