This week in insurance: Philippine deposit insurance rises, ICA calls for flood defence fund, solar storms to bring trillion-dollar loss

Vietnam also aims to amend the law on deposit insurance.

Asia-Pacific's insurance sector from 3 to 7 March saw some notable regulatory changes and climate risk suggestions.

The Philippine Deposit Insurance Corporation (PDIC) will increase the Maximum Deposit Insurance Coverage (MDIC) to $17k (₱1m) per depositor, per bank, beginning 15 March. 

Previously, the MDIC amount was $8,630.44 (₱500,000).Banks are required to update their materials to reflect the new coverage.

Starting 28 February, they can download the updated Official PDIC Digital Decal.

Similarly, the State Bank of Vietnam (SBV) has submitted a proposal to the government to amend the Law on Deposit Insurance, aiming to strengthen the role of the Deposit Insurance of Vietnam (DIV) and enhance depositor protection, reported Viet Nam News. 

After 12 years of implementation, the SBV has identified challenges in the existing law and seeks revisions to improve the effectiveness of the deposit insurance policy and support the stability of the credit institution system.

The proposal includes expanding investment options for the DIV by allowing it to purchase long-term bonds issued by credit institutions that receive compulsory transfers.

On the other hand, Australian general insurance industry last year saw a claims surge, yet, increasing risks and cost pressures are driving up premiums, widening the insurance protection gap, and putting more Australians at financial risk, warned the Insurance Council of Australia (ICA).

The ICA has proposed a $19b (A$30.15b), ten-year Flood Defence Fund to improve flood mitigation infrastructure and protect vulnerable properties. This builds on existing initiatives like the Disaster Ready Fund, which was established following the ICA’s 2022 call for increased disaster resilience investment.

Additionally, severe solar storm could lead to global economic losses of up to $2.4t over five years, with an expected loss of $17b from the event itself, according to Lloyd’s latest systemic risk scenario.

Greater China is forecasted to record $429b whilst Asia-Pacific at $375. 

“Historically extreme space weather has been rare, however, by equipping businesses, governments and insurers with data-based models we’re encouraging effective preparation stronger collaboration,” Rebekah Clement, Lloyd’s Corporate Affairs director, said in a press release.

The model outlines three severity levels, with losses ranging from $1.2t in the least severe case to $9.1t in the most extreme, equivalent to a global GDP reduction of 0.2% to 1.4%.