The Hong Kong Insurance Authority (IA) and the Hong Kong Federation of Insurers (HKFI) jointly organised a forum on Sept. 12, as part of Hong Kong Green Week, focusing on the insurance industry’s evolving responsibilities in climate resilience.
The event, “Bridging Finance and Future: The Insurance Industry as a Pillar of Climate Resilience,” convened more than 180 participants from insurance, government, academia, and business, both onsite and online.
Opening the session, IA chairman Stephen Yiu (pictured) called attention to the increasing complexity of climate-related risks and the necessity for collaboration across sectors.
“Given the scale and complexity of climate-related risks, it is incumbent upon regulators and policymakers to engage proactively with the insurance industry, to strengthen our city’s climate resilience through robust risk assessment, improved risk management frameworks underpinned by a deeper understanding of the social value of insurance,” he said.
The IA has prioritised partnerships among regulators, insurers, and academic researchers to advance climate risk modelling and support the development of insurance solutions that address sustainability objectives.
During the event, representatives from the IA, HKFI’s Task Force on Green Insurance, and the Hong Kong University of Science and Technology (HKUST) outlined the Climate Modelling Project. This initiative, which utilises claims data from insurers, is designed to improve risk assessment capabilities and inform the creation of new insurance products that align with environmental goals.
A panel discussion explored how cooperation between different industries can help identify new business opportunities and reinforce climate resilience.
Government officials from the Civil Engineering and Development Department and the Drainage Services Department shared updates on research into shoreline management and flood mitigation, highlighting the public sector’s role in reducing climate-related risks in Hong Kong.
The event occurred as the insurance industry faces rising losses from natural disasters. Verisk’s Global Modelled Catastrophe Losses Report estimates that the global modelled insured average annual property loss (AAL) from natural catastrophes has reached US$152 billion.
This figure, based on widely used catastrophe models, reflects the influence of factors such as inflation, urban expansion, increased frequency of extreme events, and climate change.
The report notes that the non-crop global modelled insured AAL increased by US$32 billion from the previous year, continuing a trend of escalating losses.
Over the last five years, the average annual insured loss has been US$132 billion, up from US$104 billion in the earlier five-year period.
Verisk attributes approximately 1% of the annual increase to long-term climate effects.
The report also notes that the protection gap remains wide: in Asia, insurance covers only 12% of economic losses from catastrophes, compared to 32% in Latin America and 48% in North America.
A separate analysis from Willis projects that insured losses from natural catastrophes in 2025 will again surpass US$100 billion globally, marking the seventh straight year at this level.
The Willis Natural Catastrophe Review points to several significant events, including the January wildfires in Los Angeles, which have resulted in insured losses exceeding US$40 billion.
Other notable events this year include large-scale wildfires in Japan and South Korea, a record tornado season in the US, Australia’s first cyclone landfall near Brisbane in five decades, and Ireland’s highest recorded wind speed.
