FROM THE MARGINS
I had the honor of being invited by the Peak Reinsurance Company Ltd. (Peak Re) to be one of the panelists in its inaugural Forum 2024, “Sustainability in a Changing World.” This was held at the Hong Kong Palace Museum Auditorium last Sept. 23, 2024. More than 150 participants from across the globe attended the forum, which was strategically scheduled a day before the 30th East-Asia Insurance Congress (EAIC), one of Asia’s most influential industry conferences.
Peak Re is a Hong Kong-based global reinsurer and member of the International Cooperative and Mutual Insurance Federation (ICMIF). For the last 12 years, Peak Re’s unique strategy of client-centricity and supporting communities through innovative reinsurance solutions have won it numerous accolades, including the prestigious Asian Reinsurer of the Year Award many times over. As one of the leading reinsurers, it continues to push the boundaries of financial protection and enhance the resilience of Asian economies.
The Peak Re forum explores the opportunities and challenges that are changing Asia’s insurance industry landscape.
Addressing protection gaps
Speaking before experts, thought leaders and industry pioneers, Franz-Josef Hahn, CEO of Peak Re, emphasized the crucial role of data, cooperation, and collaboration among stakeholders. This was seconded by the chairman of the Southeast Asia Disaster Risk Insurance Facility (SEADRIF), Prof. Yoshihiro Kawai, who gave a thought-provoking speech about the transformative trends that are changing Asia’s insurance industry, highlighting the need for governments and industry players to work together to close the financial protection gaps that leave thousands of people vulnerable. SEADRIF is a regional initiative to build ASEAN’s financial resilience against climate shocks and disasters. The SEADRIF Insurance Co., which he chairs, provides disaster risk financing and insurance products to the ASEAN+3 (member-countries + Japan, China, and South Korea).
Prof. Kawai’s discussion centered around three themes:
1. Current environment: The Professor observed that insurance products have limited growth prospects, with insufficient coverage for catastrophic risks. He also emphasized the role of insurance in addressing the challenges brought by the social tensions between the global north and south.
2. Accessing insurance: According to Prof. Kawai, there remain barriers to people’s access to insurance, like affordability and availability, lack of awareness, inadequate risk management tools, and limited government engagement.
3. Solutions: Prof. Kawai advocated the adoption of ex-ante measures (taking action before disasters happen), fostering dialogue between governments and industry, promoting joint insurance systems, and supporting regulation around CAT bonds and parametric insurance. He also stressed the importance of cooperation among development players like OECD, ADB, COP 28, UN, and other international organizations. One key takeaway was the SEADRIF model of insurance for public infrastructures like hospitals, roads, and bridges. Prof. Kawai noted that many government-constructed infrastructures are uninsured, which places a heavy financial burden on governments when disasters strike.
Clement Lau Chung-kin, executive director of policy and legislation at the Hong Kong Insurance Authority, supported the calls for cooperation and collaboration to build a more resilient society. In turn, Prof. Alexis Lau presented data-driven improvements in climate prediction for tropical urban areas. He emphasized the importance of engaging communities, particularly the vulnerable groups — often, the hardest hit by climate-related disasters but the most difficult to mobilize.
Exploring solutions
As one of the panelists for the session “Climate Change Challenges: Insights for Asia's Insurance Industry,” I had the privilege of sharing the stage with notable personalities such as Denden Tesoro, COO of Malayan Insurance; Dr. Pongpanu Damrongsiri, executive director of the Thailand general insurance association; and Tony Gallagher, Guy Carpenter CEO for the Asia-Pacific Region. Steven Lam, a senior Bloomberg analyst with expertise in Hong Kong's insurance and financial sectors, moderated our discussion.
Our panel explored innovative solutions to climate change, particularly in relation to insurance and microinsurance for the poor. I discussed the microinsurance mutual benefit association (Mi-MBA) model, which has been highly successful in providing risk protection for the poor in the Philippines. I also discussed my microfinance and microinsurance network’s joint venture with a commercial insurance company, Pioneer Insurance, which enabled us to provide non-life insurance products to our members. I highlighted the importance of quickly processing claims and releasing payment. I also stressed the advantages of working with microfinance institutions which have a strong grassroots presence. They are effective distribution networks that facilitate vulnerable groups’ access to microinsurance.
To conclude the summit, Peak Re’s Chief Economist Clarence Wong unveiled their latest study, entitled, “Unlocking Potential: Asia’s Middle-Class Women and Old Age Care.” This study showed that Asia’s middle class represents vast business potential for the region’s insurance industry, although insurers would need to understand the differences across market segments within this group. As always, sharing data and experiences would facilitate service to this largely underserved population group.
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“Savings alone are not enough to achieve financial freedom; insuring your assets with general insurance policies is equally important.” — IFFCO-Tokio
(Dr. Jaime Aristotle B. Alip is a poverty eradication advocate. He is the founder of the Center for Agriculture and Rural Development Mutually-Reinforcing Institutions (CARD MRI), a group of 23 organizations that provide social development services to eight million economically-disadvantaged Filipinos and insure more than 27 million nationwide.)