SEADRIF expands board amid rising climate risks in Asia
![SEADRIF expands board amid rising climate risks in Asia](https://www.cheapsr22.us/wp-content/uploads/2024/08/1724276392_SEADRIF-expands-board-amid-rising-climate-risks-in-Asia.jpg)
SEADRIF expands board amid rising climate risks in Asia | Insurance Business Asia
Insurance News
SEADRIF expands board amid rising climate risks in Asia
New addition boasts three decades of industry experience across Indonesia and ASEAN region
Insurance News
By
Roxanne Libatique
SEADRIF Insurance Company, which provides catastrophe risk insurance coverage to ASEAN countries, has appointed Heddy Pritasa to its board of directors, effective Aug. 6.
Heddy Pritasa’s career
Pritasa’s most recent role was as technical director at PT Reasuransi MAIPARK Indonesia, where he played a key role in advancing strategic and business development initiatives that supported the company’s growth and client relations. His responsibilities involved collaborating with partners on technical insurance strategies and delivering critical technical services.
In addition to his role at MAIPARK, Pritasa served as chairman of the ASEAN Natural Disasters Research and Works Sharing committee under the ASEAN Insurance Council (ANDREWS AIC). He led efforts to establish best practices and foster knowledge exchange on natural disaster research across ASEAN member countries.
He also guided the Technical Committee within Indonesia’s State-Owned Property Insurance Consortium (KABMN), focusing on the development, implementation, and monitoring of technical insurance practices that enhanced the consortium’s operations.
Pritasa’s extensive credentials include a magister in finance, fellowship with the Malaysian Insurance Institute, and various certifications in risk governance, investment management, and financial management.
SEADRIF Insurance anticipates that Pritasa’s expertise will be instrumental in guiding the company through the challenges ahead, particularly as climate risks become more pronounced.
Financial institutions face impacts of climate change
The appointment comes as the insurance industry in Asia, and financial institutions more broadly, face mounting challenges from climate-related risks.
Aon’s report detailed the various dimensions of climate-related risks, including physical impacts from changing weather patterns, the transition to a net-zero economy, and evolving regulatory frameworks that are increasingly integrating climate risks into the financial system.
Areas where Asian financial institutions are vulnerable to climate risks
The report identified four key areas where financial institutions in Asia are particularly vulnerable:
Credit risk: Climate events can impair borrowers’ ability to repay loans, especially in regions prone to extreme weather, leading to increased default rates and reduced collateral value, particularly where insurance coverage is insufficient.
Liquidity risk: Natural disasters like floods or typhoons can create sudden spikes in liquidity demands as institutions respond to the immediate needs of affected customers, potentially straining their financial resources.
Operational risk: Severe weather can damage infrastructure, including branches and data centres, disrupting business operations and customer service.
Capital stress: A significant rise in loan defaults following a climate event could substantially deplete an institution’s capital, posing risks to financial stability.
Aon stressed that addressing climate-related credit risks is particularly crucial for banks in Asia. Underinsurance or non-insurance of properties in vulnerable areas can exacerbate these risks, leading to higher chances of loan defaults as property values decline after extreme weather events.
How could financial institutions mitigate climate risks?
To mitigate these risks, Aon suggested several strategies, including:
integrating climate risk assessments into loan approval processes
enhancing customer education on the importance of adequate insurance coverage
exploring alternative risk transfer solutions such as mortgage impairment or parametric insurance
promoting resilience through collaboration with insurers and advocacy for climate-conscious development practices
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!