Tokio Marine chief executive Satoru Komiya has addressed concerns related to the rising industry losses due to climate change. Despite investor and policymaker worries, Komiya said that the company “cannot run away from” natural catastrophe risks and emphasised the Japanese insurance company's commitment to continuing its coverage.
Global claims from natural disasters, including hurricanes and wildfires, have consistently exceeded $100 billion in recent years. This surge in claims has led some insurers to withdraw from climate-exposed areas and reinsurers to increase their prices. The situation has sparked fears about certain regions becoming uninsurable due to climate change impacts.
In a report from the Financial Times, Komiya acknowledged the concerns but stated that escaping from natural catastrophe risk is not an option for Tokio Marine. He highlighted the importance of facing these risks head-on and using various protective measures, including reinsurance, which has also seen a rise in costs.
The company recently revised its full-year adjusted profit guidance due to increased claims from natural disasters, such as the wildfires in Hawaii in August. However, improvements in other areas and an enhanced share buyback programme contributed to a rise in its share price to an all-time high.
Komiya identified natural catastrophes as the biggest risk to the insurance sector, surpassing the threat of systemic cyberattacks. He emphasised Tokio Marine's role in acting as a societal shock absorber and its responsibility to support customers in times of crisis.
In response to escalating global risks, Komiya stated that Tokio Marine can no longer remain indifferent to global developments. The company, established in 1879, operates globally and generates over half of its profits from international markets.
Komiya also defended the rising costs of natural catastrophe insurance, stressing the necessity of appropriately pricing products. He highlighted the need for investment in resilience and working with clients to better protect against events like wildfires. This initiative led to the launch of a new subsidiary in November, focused on prevention and mitigation services.
In other recent developments, RHB Bank of Malaysia is reportedly soliciting proposals from financial advisors regarding its insurance sales partnership within its branches as its existing arrangement with a subsidiary of Japan’s Tokio Marine Holdings Inc is set to conclude at the close of the upcoming year.
What are your thoughts on this story? Please feel free to share your comments below.