Experts shed light on building resilience and sustainability through insurance and the capital market in Asia
24 January 2024
Asia is one of the most vulnerable regions to climate risks than the rest of the world given its significant natural catastrophe (NatCat) protection gap, rapid economic growth and high degree of urbanisation. To examine how effective insurance and capital market solutions can help address climate risks in Asia, the Insurance Authority (IA) hosted a panel discussion titled “Harnessing Insurance and Capital Markets for a Resilient and Sustainable Future” today (24 January 2024) at the Asian Financial Forum (AFF) 1 , where industry leaders and experts shared valuable insights and experiences as how to unleash the social value of insurance by leveraging the capital market to strengthen financial and social resilience in the region.
“There is a growing protection gap in Asia, with only 16% of the economic losses caused by NatCat events being insured in 2022,” said Tony Chan, Associate Director, Policy and Legislation of the IA. “With our mature insurance and capital markets, Hong Kong can play a role in providing alternative risk transfer tools such as insurance-linked securities (ILS) to help enhance capacity for taking on increasing NatCat risks and deepening financial inclusion.”
The panel, composed of experts from the insurance industry and academia, dived into the problems arising from the widening NatCat protection gap in Asia and emphasised the urgent need for climate adaptation and mitigation measures to address the region’s vulnerability to climate change. They explored the role of ILS including catastrophe bonds and parametric insurance in bridging the protection gap and providing financing for post-disaster recovery.
The panelists also discussed how closer collaborations among stakeholders including governments, the insurance industry and academia can bring better protection to people and businesses against climate change risks.
Ends
The Insurance Authority (IA) hosted a panel discussion at the Asian Financial Forum where experts shared views as how to harness insurance and capital markets for a sustainable future.
Note:
1 AFF is the region’s premier platform that brings together influential leaders from government, finance, and business communities globally for discussions and exchange of insights on the global economy from an Asian perspective. At AFF 2023, over 2,500 in-person visitors and 4,500 virtual attendants from more than 70 countries and regions, along with over 120 exhibitors participated for thought leadership and discussions while witnessing the latest fintech advancements, emerging business strategies, and expanding their professional networks.