With increasing frequency and more severe impact, global warming is seen as the new geography of violence. And in the last two years alone some US$200 billion were paid out in Nat CAT losses - which also saw several million lives lost. In this new geography, despite hi-tech gadgets, even risk modelling is growing more complex. Future risks can no longer be calculated based on past events. In Asia this is an even more compelling question given the spate of devastating events in the the past year. Typhoons Jebi and Trami, floods in Kerala and earthquake and tsunami in Indonesia put a devastating end to the horrific year as the fourth most expensive for insured catastrophe losses.
The widening protection gap needs to be addressed urgently and even governments are turning to insurers to play a defining role in the climate change equation. Is the insurance industry ready to take on the challenge, bearing in mind the greater risks involved? Can the industry rise to the current needs of the day, while ensuring its sustainability and profitability?
What is the given for insurers? What are the drivers for winners in the Nat CAT arena given the long-term impacts of climate risk on business models? Will innovation and technology bring more sophisticated risk models? Will ART, ILS and hybrids help close the gap? Can insurance influence behaviour to help save the earth through ethical underwriting in Asia where GHG emissions are rising fastest given its reliance on coal and oil, along with deforestation.
This two day conference in Jakarta will take a long hard look at the role of insurance in managing Nat CAT as well as the critical issues related to climate change, regulatory challenges, and the role of governments, underwriting strategies and risk assessment through more sophisticated CAT modelling tools. Climate change is the hottest issue of the day and the biggest challenge for tomorrow. This is the WOW moment for insurance to show its social good while ensuring business viability.