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

Climate Change: The Role of the Insurance Industry and the Public Sector June 22 and 23, 2022 at 9AM to 12NN via zoom Seminar Fee: Foreign Participant - USD $70 Local Participant - PHP 3,360 (INCLUSIVE OF VAT) For details and registration: https://insurancesummit2022.wixsite.com/iiap

The prospective underwriting performance of National Reinsurance Corporation of the Philippines (Nat Re) is expected 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, says AM Best. The global credit rating agency says that it has affirmed Nat Re's Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good). The outlook of these credit ratings is stable. The ratings reflect Nat Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). Balance sheet Nat Re’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which remained at the strongest level in 2021, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best views the company’s investment portfolio as having moderate risk. Despite some exposure to corporate bonds and equity investments, the majority of Nat Re’s portfolio is composed of fixed income securities issued by the Philippines government. The company’s allocation to equity investments has reduced gradually over recent years, with the expectation of continued portfolio de-risking over the medium term. Nat Re has a moderate dependence on retrocession, and exposure to counterparties that are non-rated on an international financial strength rating scale. The company’s balance sheet is sensitive to natural catastrophe exposure in the Philippines, although this risk is mitigated in part through the use of retrocession. Operating performance Nat Re’s operating performance is assessed as adequate, with a five-year average return-on-equity ratio of 2.5% (2017-2021). Net profits showed an improvement in 2021 compared with the prior year, supported by better overall investment results although dragged by poorer underwriting results. Underwriting results in 2021 were negatively impacted by catastrophe losses that affected both the domestic and foreign non-life portfolios. These losses were mitigated in part by robust profitability from its life reinsurance business. Nat Re’s investment income arising mainly from interest and dividend income continues to contribute positively to operating earnings. Profile AM Best views Nat Re’s business profile as neutral given its strong relationships with local cedants and access to business through mandatory local cessions. As the only domestic reinsurer in the Philippines, Nat Re is well-positioned for business opportunities emanating from government initiatives. For instance, Nat Re is engaged in the design and launch of underwriting facilities for the Philippines market, which enables it to write greater business volumes in excess of the level stipulated by the mandatory cessions. The company maintains a portfolio that is diversified by geography through reciprocal business arrangements with regional and global reinsurers, and whilst remaining weighted toward catastrophe-exposed property business, recent growth in the domestic life reinsurance segment is viewed to have supported an improvement in portfolio diversification. AM Best considers Nat Re’s ERM framework as appropriate given the size and complexity of its operations. The company’s risk management framework and corporate governance capabilities are viewed to have strengthened over recent years. Source: asiainsurancereview.com

By Herminia S. Jacinto RECENT events in the country and elsewhere in the world have highlighted the serious problems brought about by climate change. Typhoons and floods are events that have become ordinary happenings in the Philippines. But of late, we have had more serious ones such as storm surges, heavy flooding and landslides, caused by nonstop strong rains. Earthquakes have come more frequently than before, and it looks like the dormant volcanoes have suddenly awakened. The latest was the mild eruption of Mount Bulusan in Sorsogon, which had been inactive for a long time. Pagasa has declared that the rainy season has officially started, and true to form, the " announcement" came with thunderstorms and rains almost everyday. There is no way by which these events can be stopped or controlled. So, all that can be done is to reduce the impact of these disasters if and when they happen. All over the world, governments and the private sector are collaborating to mitigate the negative results of these disasters. Measures to protect property, people and the environment are the subject of various discussions in conferences and meetings among experts on the subject. What are we doing in the Philippines? It will be good for the public to know that protection is being thought of and steps are being taken to protect them from these catastrophes or disasters. Both the government and the private sector have to join forces to have a scientific and concerted approach to the problems brought about by climate change. The Climate Change Commission, which was created under the Office of the President, is the sole policy making body tasked to coordinate, monitor, and evaluate the programs and action plans of the government relating to climate change pursuant to the provisions of the Philippine Climate Change Act (RA 9729), also known as the "Climate Change Act of 2009." The President of the Philippines is the chairman of the commission with three commissioners assisting him. It is the local government units which are the frontline agencies in the implementation of the action plans as determined by the commission. The other government agencies with which the commission has to coordinate and work closely with are the National Disaster Risk Reduction and Management Council (NDRRMC). We are signatories to the Sendai Framework for Disaster Risk Reduction, an international document adopted by the United Nations member states at the world conference held in Sendai Japan in March 2015. The Sendai Framework aims to achieve the substantial reduction of disaster risk and losses in lives and in the economic, physical, social, cultural, and environmental assets of persons, businesses, communities and countries over the next 15 years. The private sector has established Arise-Philippines, the Local Network of Arise (the private sector alliance for disaster-resilient societies). The partnership between SM Prime Holdings and UNDRR paved the way for the creation of Arise-Philippines. To date, the network has 88 private sector organizations as members that share the vision of a resilient, prosperous future where fewer lives are lost to disasters, capital assets, and investments are risk informed, and infrastructure is resilient to natural and man-made hazards. Arise-Philippines is co-chaired by Hans Sy, chairman of the executive committee of SM Prime Holdings and (ret.) vice admiral Alexander P. Pama, consultant for disaster risk resilience. Source: manilatimes.net