The Philippines carries a catastrophe protection gap of approximately 98%, compared with a global average of 58%, according to GlobalData – one of the widest such gaps of any significant economy in the Asia-Pacific region. It formed the analytical backdrop for every argument Philippine Insurance Commissioner Reynaldo Regalado made when he addressed the 22nd Asia Nat CAT and Climate Change Conference on June 26, 2026. His core argument: the frameworks insurers currently use to price, underwrite, and reserve against catastrophe risk were built for a loss environment that no longer exists. The past, Regalado contended, is no longer a reliable guide to the future – and the industry needs to act on that before the next major event, not after it.
The data behind that argument extends well beyond the Philippines. According to the OECD’s 2025 report on protection gaps in insurance for natural hazards in Asia, average annual economic losses from weather-related natural hazards in the region increased from US$10.8 billion in 2000-2004 to US$42.4 billion in 2019-2023 – nearly four times the level recorded at the start of the century. Any actuarial model anchored to early-2000s loss baselines structurally underestimates present-day exposure.
At the global level, the picture reinforces the same point. Swiss Re Institute’s sigma 1/2026 found that below-trend natural catastrophe losses in 2025 were the result of favourable variability rather than any easing of underlying risk, with modelling indicating insured losses could reach US$320 billion in a peak-loss scenario in 2026. A quiet year is not evidence that risk is declining – it is evidence that the next active year will be more costly than the last.
The magnitude 7.8 earthquake that struck General Santos City and surrounding areas on June 9, 2026, gave Regalado’s argument an immediate illustration. The earthquake left at least 77 people dead, more than 1,300 injured, and approximately 87,000 homes damaged or destroyed across Mindanao, with NDRRMC estimating infrastructure damage at PHP 1.356 billion. Initial assessments in General Santos City alone placed damage to public and private property at approximately PHP 1 billion, covering malls, hospitals, hotels, churches, banks, and the airport. No confirmed insured loss estimate had been published by Swiss Re or Munich Re at the time of writing – which is itself a signal of how little of this event is expected to flow through insurance markets. “These events remind us that the most catastrophic disasters are no longer rare, once-in-a-generation occurrences. As risks continue to evolve, so too must our efforts to strengthen financial resilience and ensure that people, businesses, and communities can withstand shocks and recover more quickly from their impacts,” Regalado said.
The Philippines sits at an extreme end of a structural regional gap. In Emerging Asia, catastrophe resilience stands at just 5%, meaning nearly all new exposure accumulated through urbanisation and economic development remains uninsured, according to Swiss Re Institute. The global natural catastrophe protection gap reached US$424 billion in 2025, up from US$395 billion a year earlier. Insurance penetration in the Philippines stood at 1.79% of GDP as of the second quarter of 2025, up from 1.71% a year earlier, according to the Insurance Commission – still below the regulator’s own 2% target. The OECD's 2025 Asia report identifies the Philippines among the emerging economies most exposed to climate change impacts, alongside Indonesia, Vietnam, and several Pacific island states. That exposure has already tested the IC’s operational frameworks once this year.
On June 17, 2026, the IC directed all insurance-regulated entities to activate Circular Letter No. 2025-21 provisions in calamity-declared areas, requiring expedited claims processing, relaxed documentary requirements, extended filing deadlines, and coordination with local government units. For insurers managing claims reserves after a mass-displacement event affecting more than 1.6 million people, the speed of settlement is not just a regulatory obligation – it directly affects reserve adequacy, reinsurance recoveries, and the pace at which capital can be redeployed. “The Commission reminds all regulated entities that prompt claims settlement is not only a regulatory obligation but also a vital means of providing immediate financial assistance to communities, especially those that need to rebuild after a disastrous calamity. Let us ensure that affected policyholders receive the support they need without any delay,” Regalado said.
For underwriters and product teams, moving away from historical models translates into specific technical demands: scenario-based capital allocation using climate-adjusted loss curves, parametric structures that trigger payouts without loss-adjustment delays, and reinsurance purchasing calibrated to a loss environment that trends upward at 5% to 7% annually in real terms regardless of any single year’s outcome. Philippine general insurance gross written premiums are projected to grow at a CAGR of 10.6% from PHP 153.8 billion in 2025 to PHP 229.7 billion by 2029, with property insurance forecast to account for nearly 40% of that total, according to GlobalData. That growth trajectory will stress-test every pricing and reserving assumption currently in use – and whether the industry is ready to absorb the losses it implies depends on decisions being made now. “What matters most is that we are prepared – because risks become far less intimidating when we are ready for them. I hope this forum will be a chance not just to exchange ideas and experiences, but also to identify practical solutions that will strengthen the resilience of our industry and the communities we serve,” Regalado said.
