July 24, 2024
Illuminem.com
https://illuminem.com/illuminemvoices/embedding-nature-at-the-very-core-of-what-insurers-do-iii-2
https://www.linkedin.com/feed/update/urn:li:activity:7222021246765416448/
My commentary (Part II) for illuminem on the recent presentation (online) at – China International Conference on Insurance and Risk Management (CICIRM) 2024 #Ningbo.
‘How do we embed #Nature at the very core of what insurers do?’ Is so dependent on how we learn, think and practice #insurance (and related risk management). #Indemnity (betterment courtesy #adaptation and #resilience – facilitated by Nature) and #insurableinterest (by factoring #externalities, thereby pricing the risk more soundly). There’s a lot more to it. Insurance education needs a serious re-visit. Industrial age definitions are seriously deficient and do not stand up to the existential crisis staring at us.
I guess what’s amiss with insurance education – a #systemic challenge – is faced by much of education today. Or else, for instance, why shouldn’t you have a book like ‘The Hidden Life of Trees’ by Peter Wohlleben in school syllabus?
Cannot resist sharing this extract from Tim Flannery in his foreword to the above-mentioned book:
“But the most astonishing thing about trees is how social they are. The trees in a forest care for each other, sometimes even going so far as to nourish the stump of a felled tree for centuries after it was cut down by feeding it sugars and other nutrients, and keeping it alive… A tree’s most important means of staying connected to other trees is a “worldwide web” of soil fungi that connects vegetation in an intimate network that allows the sharing of an enormous amount of information and goods. Scientific research aimed at understanding the astonishing abilities of this partnership between #fungi and plant has only just begun.”
Knowing what whales do to our environment as a #keystone species, shouldn’t news such as this disgust us all: Greenland police said they arrested a veteran environmental activist and anti-whaling campaigner on Sunday on an international arrest warrant issued by Japan… Paul Watson was arrested when his ship docked in Nuuk, Greenland’s capital, a police statement said. Paul is the founder and President of the animal rights and environmental Sea Shepherd Conservation. He was enroute to the North Pacific on a mission to intercept a new Japanese #whaling ship.
Finance will have to be ‘nature-fied’. Prof Aled Jones of Anglia Ruskin University (ARU) wants thought to how capital can protect nature.
As a risk manager, risk carrier and investor – insurance ought to be way ahead of all financial services and assert as a duly nature-fied steward!
Chartered Insurance Institute Climate Majority Project
Illuminem
July 17, 2024
My commentary (Part I) for illuminem on an online presentation today at – China International Conference on Insurance and Risk Management (CICIRM) 2024 – Ningbo.
Just as #nature can be multi-faceted – destroyer, preserver and healer – so can insurance. However, insurance has thus far generally chosen to be the handmaiden with a coloniser mindset. It is inclined to approach any threat as conqueror or tinkerer and not a healer.
Blending Nature’s benign powers with healing capability of insurers ought to be the ultimate goal.
The Journal, Chartered Insurance Institute
July 5, 2024
https://thejournal.cii.co.uk/2024/07/04/climate-change-chocapocalypse
https://www.linkedin.com/feed/update/urn:li:activity:7215936370018557953/
Here’s my piece of chocolate in the latest issue of the Journal, Chartered Insurance Institute!
While cocoa, the source of chocolate, originated in South America – today Ivory Coast and Ghana account for 50% of its annual yield. Africa currently puts together 75%. Tracked back to 450 BC, the sweet treat was once a preserve of the rich. Today it cuts across all geographies and age barriers.
However, climate change threatens to seriously disrupt cocoa supply. While some promising alternatives have already hit the market, there is still some hope in the form of ethical and sustainable practices. Crop insurers also have a positive role in the desired transition.
Needless to mention that cocoa is a part of a larger global malaise. According to Nature.org: “Approximately $500 billion in agricultural subsidies worldwide perpetuate unsustainable food and land use systems, which lead to environmental degradation, poor nutrition and income inequality. If we do nothing about the way we produce and consume our food, it will amount to damage estimated to cost $16 trillion each year by 2050.
By redirecting harmful subsidies toward sustainable practices, including regenerative agriculture, governments can accelerate international climate and biodiversity progress. This shift could provide 40 percent of the funding we need to protect and restore nature – without having to generate new funding streams. We need to see more of these shifts, and we need them urgently”.
#sustainability #regenerative #biodiversity
illuminem/ LinkedIn
June 21, 2024
https://www.linkedin.com/feed/update/urn:li:activity:7209805029636005888/
Dr. SHREERAJ DESHPANDE helps me navigate through the challenges posed to health insurance in the times of #Climatebreakdown. The world’s most populous country, diabetes capital, dealing with obesity, malnutrition, ageing – now coping with heat and humidity, poor air quality, water crunch and a missing health regulator.
Could the growing focus on increased penetration hit a wall – as some geographies pose a serious threat to human health? Needless to mention, a rising number of senior citizens are left out of the safety network; gig workers have no protection and primary healthcare in much of the country has disintegrated.
“7,000 people slip into poverty every hour in India because of catastrophic health expenses”.
Shreeraj believes health insurance is here to stay and innovation holds the key.
Dr Shreeraj Deshpande is a well known Health Insurance expert. He has over three decades of experience in both private and public sectors of the insurance industry. Shreeraj was responsible for setting up successful Health verticals in three insurers, including the Allianz and Generali joint ventures in India. He is a much sought after member of various industry level as well as regulatory committees on Health Insurance. He was awarded a doctorate in health insurance by the University of Pune.
Praveen Gupta: ‘State of Global Air 2020’ showed that 22 children died every hour due to air pollution a day in India. During peak winters, thanks to pollution levels, a passive smoker in Delhi could inhale smoke equivalent of 10 to 15 cigarettes every single day.
With rising frequency & severity of respiratory ailments, is there a case for differential pricing in such locations?
Shreeraj Deshpande: Medical underwriting in Individual Health insurance involves health risk assessment including medical screening wherever required. The health risk assessment which insurers carry out involve seeking information on habits such as smoking, alcohol consumption, existence of life style diseases, occupation, etc., and will depend upon the extent of availability of data and applicability while underwriting. Height and Weight to calculate Body mass index (BMI) is the most common method of health risk assessment. Insurers also adopt geographical based underwriting strategies as well as differential pricing. Broadly this is based on the experiential analytics in these geographies in terms of frequencies and severity. In India Health Insurance is majorly confined to Hospitalization Insurance though Comprehensive Health Insurance is slowly making inroads.
There are various factors which could contribute to the high or lower frequencies and severity of hospitalizations which can include environmental conditions like poor air quality or water quality. The availability of data which can be analyzed and interpreted is very important. When we look at comprehensive health insurance including Outpatient Department (OPD), the more the data available for risk assessment the finer can be the pricing. Insurers do collect International Classification of Diseases (ICD) code wise data and use the same while pricing products.
The changing regulatory scenario would have a very important impact on the way underwriting is done.
One of the fall outs was that the fundamental approach of “Underwriting at Acceptance and not at Claims” started getting ignored which resulted in increased customer grievances.
PG: Do you see a shift in risk assessment: from one largely based on individual lifestyle to also a combination of individual and geographic triggers like air quality, heat, humidity?
SD: Around a decade back Indian health insurers were more into Medical underwriting basis age/sum insured and adverse declarations, the proposer was asked to undergo pre acceptance medical tests. Over the years market evolved and the pre-acceptance medical tests age limit/ sum insured limits got raised. This was also because of pressure on numbers and growth. Insurers who were into business for some time started expanding their book making sales process for health policies easier. One of the fall outs was that the fundamental approach of “Underwriting at Acceptance and not at Claims” started getting ignored which resulted in increased customer grievances.
With the emphasis of the regulator to increase customer confidence, it is now very important for insurers to have prudent underwriting strategies with growth. Insurers will have to use a mix of medical underwriting and other external parameters. This becomes even more important in automated underwriting with use of AI and ML. Analytic capabilities and platforms are now available however suitable data needs to be collated and analyzed. Profiling of customers using AI & ML will happen the way it happens for other consumer products. This should also account for adverse environmental factors.
PG: Once the data is plentiful, do you see a shift from personalized side to extraneous factors? How would that transform the way health insurance is not only underwritten but also how it is bought and sold?
SD: As the portfolio size of any insurer increases the underwriting strategies also change. In the initial periods of building a portfolio, insurers are selective and try to avoid adverse selection etc., by adopting to medical underwriting. As the portfolio increases and with good experience insurers tend to relax their strategies and grow. Ease of sales process with simplified underwriting is something which every distributor would want. Therefore insurers would profile their customers in advance – using AI and ML – well before targeting them.
The regulatory changes also have a major role to play. In some markets denying insurance covers based on pre-existing conditions or discriminating premiums charged is prohibited by law. While Insurers may be allowed to price according to geographic factors / experience, individual underwriting will in all likelihood not be allowed. In such cases use of extraneous data and pre-underwritten products would have a major role to play.
Parametric offerings to protect against rising heat and adverse quality air could become a mass offering.
While insurers do adopt underwriting strategies to balance their exposure across geographies and risk profiles even in Health Insurance it may be unfair for common citizens who are inhabitants in such places to bear the brunt of higher pricing or denial of coverage.
PG: Not just the workplace, living areas and time spent on commute – should you not account for these health stressors? Heat & humidity are known triggers for neurological and cardiac conditions – shouldn’t they be accounted for?
SD: This is similar to what we discussed above. Insurers can definitely consider these while carrying out risk assessment – subject to availability of the data. For example Insurers do generally have a question on occupation, location etc. More detailed questions can elicit more information. While type of job or location could have increased stress but whether the individual also performs activities like exercise / yoga which helps him reduce or manage stress.
How much information insurer can collect, collate and analyze and actuarially use is important. While overall frequency and severity of hospitalization is sufficient for hospitalization products more finer data would be required to assess risks covering comprehensive health care. I believe, as of now, the adverse impacts of climate fall well within the frequency and severity parameters of hospitalization. However, this needs to be fine-tuned with the OPD extension, wherever applicable.
The regulatory changes across economies are moving towards making health insurance available without discrimination to citizens and some markets do not allow refusal of coverage or even differential pricing basis pre-existing conditions. In some markets medical underwriting is used to allow discounts in premiums for medically underwritten proposals. Some markets prefer to adopt community-based pricing where risk is distributed over the community in a geographic distinction. With automated underwriting gaining momentum in retail health – use of AI and ML is increasing with wider use of data.
PG: Would employers be vicariously liable for locating work spaces in unhealthy environments?
SD: This can happen only if the workplaces do not meet regulatory compliance of locating work places or not following applicable regulations such as Pollution Control Acts and hazardous chemicals handling. The Workmen Compensation (WC) Act also lists down occupational diseases which can be revised from time to time. Anything within the workplace the employer can be made responsible, however, the responsibility of keeping geographic environment healthy, pollution free is a collective responsibility of the governments and citizens.
Health Insurance has a social need and changing regulatory scenarios across economies emphasize that health insurance be made available to all citizens and cannot be denied or discriminated.
PG: Physical assets prone to wildfire, floods, windstorms are increasingly becoming uninsurable. Could human health in challenged locations be next?
SD: While insurers do adopt underwriting strategies to balance their exposure across geographies and risk profiles even in Health Insurance – it may be unfair for common citizens who are inhabitants in such places to bear the brunt of higher pricing or denial of coverage. There are certain diseases/conditions which are endemic to some places and insurers have to adopt an underwriting philosophy combined with risk management and risk reduction on continuous basis to improve risks or keep people healthy.
Health Insurance has a social need and changing regulatory scenarios across economies emphasize that health insurance be made available to all citizens and cannot be denied or discriminated. Insurers will have to implement risk management practices like carrying out medical screenings, conducting health and wellness campaigns for improving risks in such areas.
PG: Women and children constitute a large chunk of population that remains outside the health safety network?
SD: Some innovations do give me hope. Recently a parametric offering was introduced to protect women workers in the unorganized sectors, particularly working outdoors, from exposure to excessive heat. This is an unchartered territory which deserves to be looked at closely.
PG: Many thanks for these very informed insights, Dr. Deshpande.
illuminem
June 5, 2024
https://illuminem.com/illuminemvoices/shedding-the-coloniser-in-us
https://www.linkedin.com/feed/update/urn:li:activity:7203729537296138240/
My Op-ed for illuminem on the eve of #WorldEnvironmentDay.
A tiger is a metaphor for the apex of the food chain, relentlessly hunting it is nothing but brutalising #Nature. We continue to exterminate the magical #biodiversity that we inherited.
“For centuries, the dominant global powers have seen #Earth – its plants, its animals, and its nonwhite peoples – as brute objects: mute, without agency, and available for the taking and killing… Writes Amitav Ghosh in The Nutmeg’s Curse.
Much, if not most, of humanity today lives as #colonialists once did – he reminds – viewing the Earth as though it were an #inert entity that exists primarily to be #exploited and #profited from, with the aid of technology and science. Yet even the sciences are now struggling to keep pace with the hidden forces that are manifesting themselves in climate events of unprecedented and uncanny violence”.
As we get closer to breaching all the #Planetaryboundaries – Mexican President elect – Claudia Sheinbaum Pardo – is a ray of hope. #Patriarchy has forever been a key driver of #Climatebreakdown. Much of political and corporate leadership – across the world – suffers serious deficit in understanding the gravity of an #existential crisis. As a first woman head of state in North America and a Climate expert – may she usher the much-awaited inflection.
Illuminem
May 30, 2024
https://www.linkedin.com/feed/update/urn:li:activity:7201776765420109825/
My interview with Wolfgang Kuhn in the illuminem. Like always – crisp, candid and seminal.
#Biodiversity: I think it has arrived on the radar…pricing biodiversity is impossible. Not that people aren’t trying, but I think it is the wrong approach.
Central bank policy: The single biggest reason why #Sustainability risks are neither priced nor taken seriously.
Business: Helps set the rules through outsized influence.
How executive remuneration has developed: I am minded arguing that stewardship has never worked.
So who is controlling #corporations: If shareholders aren’t able to? Corporations control themselves.
If you only care about financials: Then you focus on the immediate future, and discount anything beyond 10 years in the future. No #scenarios needed.
If you do care about the world: You try to cut your negative impact as fast as possible. No scenarios needed.
If box ticking is your answer, than tell me: Do you think that pilots should do box-ticking before they fly, or do you prefer they follow their gut instinct?
Disclosure is not sufficient to get action: But I would argue that it is pretty much a necessary condition.
Here are nuggets – none should wish to miss!
The Diversity Blog 