S2E27: Can the insurance industry keep up with climate change in SE Asia?

2025-11-03

Vital need for insurance to bridge the region’s ‘protection gap’ and drive the green transition Synopsis: Every first and third Tuesday of the month, The Straits Times analyses the beat of the changing environment, from biodiversity conservation to climate change. Insurance is a safety net and is increasingly vital as climate change risks grow and as more people, homes and businesses are in the path of disaster. But in South-east Asia, the majority of people do not have access to insurance. And the region is facin...

Vital need for insurance to bridge the region’s ‘protection gap’ and drive the green transition

Synopsis: Every first and third Tuesday of the month, The Straits Times analyses the beat of the changing environment, from biodiversity conservation to climate change.

Insurance is a safety net and is increasingly vital as climate change risks grow and as more people, homes and businesses are in the path of disaster. But in South-east Asia, the majority of people do not have access to insurance. And the region is facing worsening threats from floods, sea-level rise and heat stress.

Only 5 to 7 per cent of all climate-related losses are insured in South-east Asia, says Mr Daniel Fairweather, head of food security systems and biodiversity at Howden, an insurance broking firm.

But there is plenty of hope to bridge this “protection gap”, he tells Green Pulse podcast hosts Audrey Tan and David Fogarty. There are insurance products that can help communities when disaster strikes by rapidly releasing cash payments to meet emergency needs. Mutualised insurance risk pools that combine premiums can also pay out in times of need.

Two things are key: Insurers need to work closely with governments and businesses to better assess climate risks and vulnerabilities. Secondly, spread the financial risk by building connections across the region, such as linking up local and national insurance mechanisms, such as risk pools.

“Every risk is insurable,” Mr Fairweather says, adding that insurance coverage is also critical to accelerate green investments in the region.

Have a listen, and let us know what you think!

Highlights of conversation (click/tap above):

1:04 What are some of South-east Asia’s top climate change risks?

4:51 Will insurance losses increase mainly because of climate change or for other reasons, too?

9:10 What are some of the insurance products that can protect communities in the region?

16:06 In some places in the US, insurance coverage has been withdrawn. What’s the reason for this?

24:28 What about the role of insurance in boosting green initiatives in South-east Asia. Is it a catalyst?

28:28 Can the insurance industry thrive despite the rapid march of climate change?

Follow Audrey Tan on LinkedIn: https://str.sg/848W

Read her articles: https://str.sg/JLM2

Follow David Fogarty on LinkedIn: https://str.sg/jcvy