A Recent study conducted by Swiss Re Institute have highlighted the growing trend in Catastrophe-related insurance loses worldwide. In 2018 alone, global insured losses from catastrophes are estimated to be USD 79 billion and higher than the annual average of the last 10 years. Meanwhile, from Economic Losses standpoint, that total economic loss that arise from natural catastrophes around the world are estimated to be USD 155 billion, which means that only about 51% of the losses were insured. These figures not only shows the increasing cost of natural disaster in recent decades, but also shows that there is a significant coverage gap in Natural Catastrophe (NatCat) risk.
These statistics also indicates that the adverse impact of climate change is increasingly affecting the rise in natural catastrophes, as weather-related catastrophes such as Hurricanes, Typhoons, Heat Waves, droughts and Wildfires were found to be the highest contributing factor in catastrophe-related insured losses. Furthermore, in its study , Munich Climate Insurance Initiative (MCII) has found that the impact of extreme weather events has not only increased in its frequency but also in its intensity, such that it causes losses to communities around the world. These losses could be loss of property, loss of income, decrease in productivity, and also give rise to various social problems.
In this context, the serious consequences that natural catastrophe poses to society and its economy have left us with a very important question: How do we effectively manage Natural Catastrophe risk? Traditionally, there are at least two primary ways to reduce the direct impact of catastrophic events : by mitigating the risk itself or by reducing the financial impact on those directly affected. Mitigation is usually done by the individual or government that is affected by the catastrophe risk (for example people living in areas where earthquakes occur in high frequency can mitigate the risk by building an earthquake resistant house), meanwhile, reducing the financial impact of a catastrophe is primarily done by sharing of cost through government aid, charity or insurance.
Government aid often comes in the form of appropriation that is distributed after the catastrophe occurs and can potentially create budgetary burden. This being the case, most advanced economies and a growing number of developing countries are utilizing insurance to fund a significant portion of disaster recovery and to diversify this risk through international reinsurance market. The insurance industry in this context plays a significant role in reducing economic burden in four way s: First, insurance reduces the aggregate value of disaster cost by transferring risk away from taxpayers. Second, it allows the government to focus on its core business, freeing up public funds and speeding up disaster response efforts (i.e. search and rescue, public security, etc.). Third, it allocates reconstruction capital to properties and business that stand to benefit the most from it (as they were deemed valuable enough to insure in the first place). And finally fourth, it channels funds quickly to the affected parties, limiting supply chain interruptions and leading to faster reconstruction and resumption of economic activity. The full day seminar will discuss how to improve Natural Catastrophe Risk Management in the future, there are at least two ways that the insurance industry can improve itself: Ensure the Adequacy and Accuracy of Nat Cat Models, and Taking Advantage of New Technologies to manage Nat Cat Risk.
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DATE & VENUE
Tuesday, April 23, 2019
At Kempinski Grand Ballroom, Hotel Indonesia Kempinski Jakarta
Upon receipt of payment, the Organizing Committee will send INVITATION by email to the participant
Participants who are not present at the event without notice at least 3 days in advance will still be charged a registration fee