Page 20 - Insurance Times August 2023

Emerging Asia to drive glo- growth remain skewed to the down- dynamically as the technological, geo-
side. political and social changes in the
bal economic growth, says world today.
Global economic growth is largely sup-
Swiss Re ported by emerging Asian markets, One key emerging risk identified in the
Emerging Asia is expected to be the including countries such as India, Thai- SONAR report that spans across tech-
main contributor to global economic land, Indonesia and Malaysia, which nological, economic, social and envi-
growth in the coming years, according are set to boom in the coming years. ronmental issues is the "Arctic open-
to Swiss Re Institute's latest sigma re- Given the reopening of China's ing". As the Arctic Ocean and adjacent
port. With the reopening of China's economy from lockdowns in December land are warming up two to three
economy this year leading to a recov- last year, China is forecast to be one times faster than the rest of the globe,
of the few countries to register stron- the ice is melting, and new shortcut
ery in demand, Swiss Re forecasts
ger growth this year than in 2022, es- shipping routes are opening up. How-
emerging Asia to grow by 5.4% in
timated at 5.4%. ever, the area is a hotspot for poten-
2023/24. Inflation remains the top glo-
tial geopolitical tension, provoking con-
bal macroeconomic concern. "In prior episodes of recovery in China,
cerns over how economic activities and
growth was mostly investment-led but
"With inflation pressures still persis-
related risks will be controlled in the
we expect it to be driven by domestic
tent, hard market conditions in non life region.
consumption this year, especially from
business are set to continue as insur-
the service sector. Hence, higher de- Patrick Raaflaub, Swiss Re's Group
ers offset elevated claims costs with
mand in China does not reverse our Chief Risk Officer, says: "The concurrent
higher premium prices. Once
baseline outlook of global disinflation. increases in economic interests, envi-
disinflation takes hold with prices de-
This year's recovery in China will have ronmental change and geopolitical
creasing, less expensive claims and
limited spill over impact on the global tensions make the Arctic a hotbed for
greater returns from interest rate sen-
economy," said Li Xing, Head of Insur- emerging risks and potential risk accu-
sitive investments should further sup-
ance Market Analysis at Swiss Re. mulation. With SONAR, we aim to
port industry profitability," said Jérôme
proactively engage our clients and in-
Haegeli, Swiss Re's Group Chief Econo-
Swiss Re identifies new dustry stakeholders in discussion of
mist.
emerging risks, as we find this is the
emerging risks
Swiss Re's global economic growth fore- best way to be prepared."
casts are below consensus at 2.3% this From the opening-up of previously fro-
A more futuristic but potentially signifi-
year and 2.3% in 2024. The cumulative zen waterways in the Arctic to hack-
cant risk examined by SONAR is solar
effect of over 18 months of rising in- ers tampering with artificial intelli-
radiation management (SRM) technol-
terest rates, deteriorating credit con- gence, the emerging risk landscape is
ogy, which could be used to cool the
ditions and further central balance multi-faceted. The 11th edition of
earth. While this does not address the
sheet reductions will continue to Swiss Re's SONAR report reveals that
root cause of global warming, namely
dampen growth prospects. The risks to the threats on the horizon develop as
16 August 2023 The Insurance Times