From March 3 to 7, the insurance sector in the Asia-Pacific region witnessed notable regulatory changes and growing concerns over climate-related risks.
In the Philippines, the Philippine Deposit Insurance Corporation (PDIC) announced an increase in the Maximum Deposit Insurance Coverage (MDIC) for depositors. Starting March 15, the coverage will rise to $17,000 (₱1 million) per depositor, per bank, up from the previous amount of $8,630.44 (₱500,000). Banks have been instructed to update their materials to reflect the new coverage, with the updated Official PDIC Digital Decal available for download starting February 28.
Meanwhile, in Vietnam, the State Bank of Vietnam (SBV) has proposed amendments to the country’s Law on Deposit Insurance. The goal is to strengthen the role of the Deposit Insurance of Vietnam (DIV) and enhance protection for depositors. After 12 years of implementation, the SBV has identified challenges in the existing law and aims to improve the deposit insurance policy’s effectiveness. The proposal includes expanding investment options for the DIV, allowing it to purchase long-term bonds issued by credit institutions that are subject to compulsory transfers.
Turning to Australia, the Insurance Council of Australia (ICA) has raised concerns over a surge in claims within the general insurance sector, which has been compounded by increasing risks and cost pressures. These challenges are driving up premiums, widening the insurance protection gap, and leaving more Australians financially exposed. In response, the ICA has proposed a ten-year, $19 billion (A$30.15 billion) Flood Defence Fund aimed at enhancing flood mitigation infrastructure and safeguarding vulnerable properties. This proposal builds on previous initiatives like the Disaster Ready Fund, established after the ICA’s 2022 call for increased investment in disaster resilience.
Finally, global risks associated with solar storms were highlighted in a new report from Lloyd’s. According to their latest systemic risk scenario, a severe solar storm could result in global economic losses of up to $2.4 trillion over five years, with an immediate loss of $17 billion from the event itself. For Greater China, losses are projected to reach $429 billion, while the Asia-Pacific region could face $375 billion in damages. Rebekah Clement, Corporate Affairs Director at Lloyd’s, emphasized the importance of data-based models to equip businesses, governments, and insurers with the tools to prepare for such extreme events. The model outlines three severity levels, with projected losses ranging from $1.2 trillion in the least severe scenario to $9.1 trillion in the most extreme, potentially reducing global GDP by 0.2% to 1.4%.
As these developments unfold, the region’s insurance industry is adapting to new regulatory frameworks and increasingly severe climate-related risks.
Related topics
