KUALA LUMPUR: An Asean insurance pool to support the Renewable Energy (RE) policies of governments in the regional bloc comes a step closer to reality following the signing of a Memorandum of Understanding (MoU) by the Asean Reinsurance Working Committee (ARWC) today (December 8).
Under the MoU, the ARWC pledges support in the form of underwriting capacity as well as setting up the terms to the establishment of the Asean Renewable Energy Pool (AREP) under the supervision of the Asean Insurance Council, Malaysian Reinsurance Bhd (Malaysian Re) said in a statement.
The ideation of the formation of AREP was initially proposed by Malaysian Re, the ARWC's chair for the 2021-2022 term, during the 4th ARWC meeting on October 15, 2021.
Malaysian Re president and chief executive officer, Ahmad Noor Azhari Abdul Manaf, said that given the potential challenges concerning the capacity and expertise in Environmental, Social, and Governance (ESG)/ Renewable Energy (RE) and the complexity of the solar, wind, and other renewable energy resources, the inherent financial risk associated with these ventures can be potentially overwhelming for one insurance company to manage effectively.
"Therefore, there is a need for a group of companies to pool their resources and band together to form an insurance pool to underwrite the risks associated with these Renewable Energy sources" he said in the statement.
The MoU, which was signed at the 26th Asean Insurance Regulators' Meeting and 49th Asean Insurance Council Meeting today (December 8), indicates joint commitment from the participating ARWC members under the supervision of the Asean Insurance Council to collaborate, work together and lead Asean (re) insurance industry to support Asean countries' efforts to achieve net zero emission targets and deal effectively with climate change.
The participating ARWC members for this collaboration are Malaysian Re (as pool manager), PT Reasuransi Indonesia Utama (Persero) (Indonesia Re), Vietnam National Reinsurance Corporation (VINARE), Cambodian Reinsurance Company (Cambodia Re), Thai Reinsurance Public Company Limited (Thai Re) and National Reinsurance Corporation of the Philippines (Nat Re).
Malaysian Re is the largest national reinsurer in the Asean region by gross written premium and asset. --BERNAMA