SIRC 2021: Swiss Re’s Ojeisekhoba talks climate risk, pricing
November 16 2021 by Karen Lai
Climate change is one area in particular that presents challenges when it comes to correctly pricing the risk facing the (re)insurance community, according to Swiss Re’s reinsurance chief Moses Ojeisekhoba.
The comments came during a fireside chat during the first day of the 17th Singapore International Reinsurance Conference (SIRC) where Ojeisekhoba called for a greater understanding of the risks facing different insurance lines across the industry.
“As we enter 2022, I think being able to make sure we have a far better understanding of the profile of risks, which then allows us to determine what the premium is for that risk is super important. For almost every line of business,” Ojeisekhoba said.
Over the years, the risks related to climate change have evolved from primary perils to secondary perils, which means that losses are increasingly related to events such as winter freezes or bushfires rather than events such as earthquakes or typhoons.
“It requires a significant amount of understanding of this peril, and subsequently, making sure they are modelled, and then making sure you have the right risk protection measures to share with our partners that they can then make sure they’re insuring against these risks in the right way,” said Ojeisekhoba.
Even though Asia has seen fewer natural catastrophe events in 2021, he suggested that the insurance industry should still recognise that some of the events that have occurred in parts of Asia this year are related to climate change. Recognising this fact also helps the industry to develop sustainable insurance products, he added.
“Prices have to adjust to match up with the risk that’s been taken,” he said. “Otherwise, you may be able to get away with it for one year or two years, but certainly not over a period of time.”
Looking ahead to 2022, Ojeisekhoba added that the three biggest risks facing the industry for the next five years are climate change, cybersecurity and inflation.
