Author(s): Yuki Matsuoka

ARISE Japan-Philippines knowledge sharing session (Part 3: Insurance)

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ARISE Japan and ARISE Philippines hosted their third Knowledge Sharing Session (KSS) on 22 July 2022.

In his opening remarks, Mr. Masato Takamatsu, President of Tourism Resilience Japan and ARISE Japan Lead welcomed the KSS series, now covering Insurance as Risk Managers, SMEs and Resilient Infrastructure. In a short scene-setting discussion, Ms. Yuki Matsuoka, Head, UNDRR Office in Japan then reviewed the outcomes of the Global Platform 2022 and specific mentions of insurance its role as a sector to incentivize risk reduction and prevention, as well as the upcoming APMCDRR in a scene-setting discussion, and introduced two additional participants from UNDRR, Ms. Sara Wade-Apicella and Mr. Erick Gonzalez from the Partnership Unit in Geneva.  

Mr. Michael Rellosa, Philippine Insurers and Reinsurers Association (PIRA) gave the first icebreaker presentation titled “Insurance industry’s response to address DRR issues,” with a broad overview of initiatives undertaken by the insurance industry in the Philippines, and a deeper dive into the Philippines Catastrophic Insurance Facility (PCIF) and a parametric insurance product for MSMEs. “The Philippines sits at the apex of climate and seismic risks, and has for a long tried to address these risks through micro-insurance products. However there was a realization that this was not the only way to address this gap” said Mr. Rellosa, explaining how PCIF, a systemic, multi-sectoral collaboration between local and global insurance players, regulators, World Bank and GIZ came into existence. PCIF will address the traditional insurance market and traditionally underserved residential and SME businesses through two separate streams, the latter available in small, flexible increments. “The two PCIFs are likened to the outrigger canoe ubiquitous to the Philippines, supporting the canoe, or the country, itself, with a goal to be sustainable and to be able to bounce back after disasters” said Mr. Rellosa. On parametric products, Mr. Rellosa noted its usefulness both for the insured, who can access immediate cash payouts after a disaster event, as well as for the insurers.

Ms. Hiroko Urashima, MS&AD Insurance Group Holdings, Inc. followed with a presentation on the role of insurance as risk managers. “We have three social missions as an insurance company: prompt and appropriate payment; proper understanding and adequate preparedness, which includes insurance penetration; and contributing to the rapid recovery and subsequent reconstruction through close cooperation with the local community” said Ms. Urashima. She then illustrated how such corporate missions translate into action through several examples: educational brochures aimed towards citizens which were instrumental in narrowing the protection gap; an online tool for real-time damage prediction,, initially developed to support quick payouts among the insurance industry itself; a smartphone app that guides residents to the nearest shelter in flood conditions by combining maps and street-view photos; the LaRC-Flood project, a collaboration with academic institutions that visualize IPCC-related research outputs as an interactive global forecast map of increased flood frequency based on climate change impacts, also available for free; and a new, on-going, government-funded research project to produce high-precision global flood hazard maps for present climate as well as maps reflecting climate change.

“Damage prediction is important for insurance companies as we need it for our heavy load of payout procedures, but this information is also important to local governments to prevent secondary disasters, and to give appropriate support to residents” explained Ms. Urashima, as the reason tools were made available to the public. “We try to think about the future of disasters. Extreme weather is just weather, but turns into disasters depending on how we live and how we build our cities, so it is important to know what risks exist in the future and build resilient cities. The role of insurance is no longer just about giving compensation and coverage, but to support recovery and prevent future accidents and disasters. In this sense, investigating the effects of climate change is urgent and it is our role to contribute new science and knowledge to society” said Ms. Urashima.

Following a short but lively discussion session, Ms. Liza Silerio, ARISE Board noted that “ten years ago in the Philippines, financing of disasters relied on a reactive approach, which we know is unsustainable. We continue to work to change the mindset, reaching out to businesses, talking to governments, and we can do it with the private sector pushing it in the forefront.” VAdm Alexander Pama, Co-Chair, ARISE Philippines closed the session with a recommendation: “we would want to expand the sharing of this knowledge, maybe even beyond the membership of ARISE. The information shared this afternoon gave a good introduction of what ARISE Philippines and ARISE Japan are doing, and this KSS is one of the best practices we are doing right now. We will also look into working on common projects that other ARISE networks can emulate.” 

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