Insurance business exists for the sustainability of other businesses and wealth creation. The insurance industry is the single largest global industry with premiums amounting to some 8% of the global gross domestic product and some 11% of global assets under its management.(Petherick 2011).From available research, it is said to have a long reach, connecting social, economic and ecological systems(Culled report by Santam group and WWF etal). Asia-Pacific accounted for 70% of global premium growth during the last five years. Obviously the region has been the centre of global economic growth for the past decades.

Global effect of climate change has resulted in higher risks but the upshot is that insurers are constantly deploying new risks models to address new emerging risks in the midst of turbulent operating environment. Some of the identified climate related risks are increased frequency and severity of extreme weather events such as floods, storms, hurricanes, droughts, rising sea levels, desertification and cyber related risks events. 
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The impact of the global pandemic, no doubt, has brought in a lot of changes in all facet of the insurers’ operations. Not the least is in the area of: new product development, rejigging of business continuity plan, redefining market channels of distribution, technological innovations, just to mention but this few.

As an active contributor to the Goss Domestic Product (GDP), the insurance sector is living up to expectations in meeting its obligations to its teeming clientele base. At the home front, we can point to the recent #ENDSARS protest resulting in untold damages to properties and other assets. The insurance industry rose to the occasion by settling the resultant claims to the stakeholders.

Nonetheless, for better appreciation of relevance of insurance services, there should be an increased awareness amongst the insuring public. Emerging risks would no doubt present new challenges that may disrupt our risks modeling plans, hence it is more imperative than ever before for today’s insurance operations to be digitized in meeting the changing expectations of the customers, especially the burgeoning youthful population. New insurance products need to be developed to satisfy all strata of the market. 

Hurricane Katrina in 2005 triggered more than USD40bn in property insurance payouts while Hurricane Sandy in 2012 resulted in almost USD19bn in payouts. These figures exclude flood insurance payouts. Another way through which insurers can navigate the changing risks landscape is to adopt scenario-based models to test the resilience of their internal processes to the emerging risks being faced Attention should also be paid to low probability risks and their enterprise risk management lens be rejigged to recognize the hitherto unknown and neglected risks areas on their risk dashboard. Insurers that ignore emerging risks identification and mitigation will only be opening themselves up to potential loss or impairment that could have been avoided or minimized.

Finally, insurers would continue to play their laudable role of putting smiles on the faces of the insuring public through innovative products offering and by extending their value creation roles.

Ikuomola is the Executive Director, Technical, Anchor Insurance Company Limited.

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