This article was originally published by Asia Insurance Review
At the 2025 GAIP Summit, industry leaders and regulators highlighted the urgent need to close protection gaps across Asia, focusing on health and natural catastrophe risks, evolving economic and climate challenges and the role of the insurance sector not just as insurers but as risk advisors. Asia Insurance Review uncovers more.
Building on last year's focus on cross-sector collaboration, data-driven insights, advanced modelling, and skills development to enhance regional risk resilience, speakers at the Global Asia Insurance Partnership (GAIP) Summit 2025 shifted discussions from theory to tangible outcomes.
GAIP chairman Yoshihiro Kawai opened the summit by highlighting the urgent need to address the protection gap across Asia, the world's largest insurance market.
Speaking to industry representatives, regulators, policymakers, academics and international bodies, he noted that the region faces nearly $1tn in unprotected risk, presenting both a major challenge and a significant opportunity to expand insurance coverage and advisory services.
Mr Kawai highlighted the unique role of the Global Insurance Partnership (GIP), describing it as “a unique platform for frank dialogue and actionable solutions” that brings together regulators, industry, and academia.
“Insurance is not only risk coverage but also a tool to reduce risk, prevent losses, and provide fiscal solutions,” he said, urging stakeholders to rethink its role in the broader purpose of insurance.
“We should promote insurance not only as risk coverage but also as risk advice. There are huge opportunities here, and we should seize them through collaboration between the public sector, the insurance industry, and academia,” he added.
Building resilience for all ages
In a special keynote speech by Minister of State, Ministry of National Development and Ministry of Trade and Industry and board member of MAS Alvin Tan highlighted that Asia is ageing faster than many other parts of the world.
“In Asia, the proportion of people aged 65 years and above is expected to almost double in the next 25 years, because people live longer and birth rates decline. Singapore will be a super-aged society in the next two years, where one out of four will be aged 65 and above,” Mr Tan said.
As such, he said with comprehensive insurance coverage, “individuals can receive financial support for their extended care needs and have less to worry about as they age in their golden years”.
Mr Tan also mentioned the threat of climate change in Asia.
“Asia faces some unique challenges.
According to the World Meteorological Organization, Asia is warming nearly twice as fast as the global average. Asia is ageing faster and warming faster,” he said.
“Insurance thus plays a critical and central role towards climate adaptation, both in prevention and restoration. Pre-disaster, it can incentivise policyholders to reduce their climate exposure. Post-disaster, insurance facilitates faster recovery and reconstruction, with reduced reliance on emergency aid,” Mr Tan said.
Health and Nat CAT- biggest protection gaps in APAC
During a panel discussion on the need for multi-sectoral collaboration in addressing protection gaps, GAIP external expert Craig Thorburn highlighted health and Nat CAT as significant in the APAC region in terms of the magnitude of protection gaps.
“When we began this work, we found that conversations about protection gaps often led to misunderstandings: one person might be referring to health, another to Nat CATs, yet both believed they were discussing the same thing. Health is a very large issue here,” he said.
“Protection gaps in general remain wide, driven by low insurance penetration, the limited scope of public safety nets, and economic development reshaping the region's risk profile. Alongside this, we face the challenges of geophysical and climate change,” Mr Thorburn said.
Evolving risks in insurance
Allianz Asia Pacific regional CEO Anusha Thavarajah spoke about the evolving risks in the insurance industry.
“On the climate side, we see rising temperatures, too little or too much rain, and increasingly unpredictable weather. On the health side, non-communicable diseases are on the rise. It feels like we are always chasing something we cannot quite catch because it keeps moving faster,” she said.
“Think about tariffs: the costs of goods, health services, supply chains – all are increasing. Yesterday tariffs might have been 10%, then suddenly 50%, then back to 10%. This political uncertainty adds another layer of complexity.”
“What matters most is that leaders – insurers, governments, development banks – come together to identify the most critical risks, ask what we can do to slow the pace of economic loss, increase insurance penetration, and then act decisively,” Ms Thavarajah added.
Holistic approach: Risk, coverage and financial impact
Insurance Commissioner of California Ricardo Lara said the US state is moving away from decades of outdated rules that relied solely on historical data to set rates, reforms he described as essential to protecting consumers amid worsening climate risks.
Speaking at the event virtually, he noted that regulators can no longer be “quiet agencies” and must instead act as first responders to disasters such as wildfires, floods and extreme heat, ensuring data accuracy and enforcing claims payments.
“After more than 30 years of using backward-looking risk assessments, California in December 2024 overhauled its framework, allowing catastrophe models and reinsurance costs to be included in rate filings. Insurers have already submitted new filings under the system, signalling renewed appetite to expand in the state,” he said.
This strategy rests on three pillars, Mr Lara said.
“First, measuring risk with mitigation. For the first time, catastrophe and reinsurance models now incorporate home hardening, community strategies and natural infrastructure like watershed management into rates.”
“Second, closing insurance gaps. Insurers using these tools must commit to writing more policies in wildfire-distressed areas; an unprecedented requirement. They've agreed to grow their portfolios in fire-prone communities by 85%.”
“Third, accountability through data. Companies must maintain wildfire data portfolios, allowing the department to track community progress and adjust policies as needed,” he said.
Collaboration hindered by misaligned incentives and silos
In the second panel discussing the missing links in cross-sector collaboration moderated by GAIP CEO Min Cheng, Rockefeller Foundation head of Asia Deepali Khanna said, “I feel like misaligned incentives often get in the way of collaborations. While the private sector, public sector, and philanthropy share similar goals, such as impact, development, and prosperity, when it comes to accountability and timelines, we are on different planets.”
“Another challenge is the structured silos and regulatory fragmentation we operate within. It's difficult to step out of our comfort zones: how do I interact with the insurance industry and how do you interact with us? We tend to stay in our own space. But if we want to do things differently, the most important step is to seek out unlikely partners, even though it can be frustrating at times,” she added.
Insurance Commission of Philippines director for financial examination Paola Gabrielle L. Matanguihan said the ‘latent culprit' of scaling cross-sector collaboration is misaligned incentives.
She said her theory is that while public and private stakeholders agree on objectives, challenges remain because of two factors.
“First, we are aligned on disincentives, we all know that inaction comes at a cost but often overlook opportunities where insurers can tap into new markets and revenue streams, particularly in Asia, which is the largest market globally. For countries like the Philippines, much of closing the protection gap falls on the sovereign, making it resource-intensive and limiting the ability to leverage the expertise and capital of the insurance industry.”
“Second, cross-sector partnerships are often treated as one-off projects with defined deliverables and timelines. By relying only on solutions already implemented, we risk failing to realise the ultimate incentive of long-term resilience, which can only be achieved through continuous and institutionalised collaboration,” Ms Matanguihan said.
McKinsey and Company partner Alex Kimura also shared his views in saying, “Misaligned incentives and competing priorities between the public and private sectors often get in the way. While the division of responsibilities is clear, execution is not always practical, and this creates challenges that need to be addressed.”
“Penetration rates for protection are low, and we haven't even discussed the retirement gap in Asia, which I would argue is an even bigger issue.
Solving these challenges cannot be done by the private sector alone, given regulatory complexity, data-sharing practices, and cultural factors.”
“The public sector has a crucial role to play: not just in insurance, but across other sectors as well. Ultimately, misaligned incentives and competing priorities are major impediments to practical execution,” Mr Kimura said.
Actional solutions
When asked on some actionable solutions, World Bank Group acting practice manager for crisis and disaster risk finance Emiko Todoroki said, “One thing I would like to emphasise is the need to bring scale to solutions. The insurance industry has a strong capital base; globally, reinsurers' assets are estimated at $700–800bn, while the gap for non-natural catastrophic insurance is about $200bn and in emerging markets, around $40bn.”
“The question is: how can we bridge that gap? Risk pools and other mechanisms could play a bigger role, but ultimately, it is up to us to make it happen,” she said.
The world of blended finance
Sitting in another panel discussing innovative financing solutions and the world of blended finance, UN Environment Programme head of insurance Butch Bacani said insurers need to figure out how to aggregate demand for insurance in a sustainable way.
“To give you an example, we're working with banks so they can measure the physical climate risk exposure of MSMEs in their portfolios. That way, they can see what adaptation measures are possible. Sometimes the answer isn't insurance- it might be restructuring repayment terms, offering longer repayment periods for MSMEs hit by climate events. Other times, insurance is the right tool,” Mr Bacani said.
“The key is to stay flexible,” he said.
Centre for Impact Investment and Practices CEO Dawn Chan added to the discussion saying that the key to raising a blended finance fund is to have at least some concessional capital on the table before you can even design it.
“But concessional capital is increasingly hard to find; it's become much rarer over the past year. So, we're exploring new models where it isn't just a one-off injection of money. We want to see if there's a path to profitability and large-scale commercial adoption, so that the catalytic capital we put in can be recycled. That way, we can keep running more pilots and continue providing technical assistance on the ground, because that support is still very much needed,” Ms Chan said.
The Global Asia Insurance Partnership Summit 2025 ran from 15 to 16 September 2025 in Singapore, with Asia Insurance Review as the official media partner.
