Page 62 - Continental Reinsurance 2022 Annual Report
P. 62
60 Risk Management Statement
Emerging Risks Monitored address social challenges, and integrate environmental,
Continental Reinsurance actively monitors and evaluates social, and governance (ESG) factors into business practices
emerging risks that may have a significant impact on our may be a source of strategic and operational risks.
operations and the wider insurance industry. We engage in
ongoing horizon scanning to identify emerging trends, At Continental Reinsurance, we have certainly embraced ESG
technological advancements, climate change-related risks, principles and have integrated them into our business
and geopolitical shifts. By staying ahead of emerging risks, we strategy. The Group has developed a comprehensive ESG
are better equipped to adapt our risk management strategies policy, is a signatory to the United Nations Environment
and develop innovative solutions to address emerging Programme Finance Initiative (UNEP FI) Principles for
challenges. Sustainable Insurance (PSI), and actively supports initiatives
related to climate change resilience, social development, and
A few growing emerging risk concerns that may have a corporate governance.
significant impact on our operations include the following:
We integrate ESG considerations into our risk assessment and
Climate Change and Natural Catastrophes: We are decision-making processes to ensure that we mitigate
increasingly concerned about the impact of climate change potential risks associated with these factors and contribute to
and the rise in natural catastrophes. Africa is increasingly the long-term resilience of the African insurance and
vulnerable to extreme weather events such as droughts, reinsurance industry.
floods, and storms. These events can lead to significant losses
and increased claims for reinsurance companies. As a result, Regulatory Landscape: The regulatory landscape is
there is a need to assess and manage exposure to climate- constantly evolving globally, and at Continental Reinsurance,
related risks. we ensure that the Group stays informed of and complies with
international standards. Regulatory developments related to
Technological Disruption: The rapid advancement of solvency requirements, capital standards, risk management
technology is disrupting the reinsurance industry globally. practices and financial reporting requirements also have a
There is a need to keep pace with technological developments significant impact on operations. Therefore, we strive to
such as artificial intelligence, big data analytics, and maintain robust systems and processes in place to meet these
blockchain. These technologies have the potential to regulatory requirements.
transform underwriting processes, claims management, risk
assessment, and customer experience. A failure to adapt to As the implementation deadline for IFRS 9 (Financial
these technological changes may pose challenges in instruments) and IFRS 17 (Insurance contracts) approaches,
remaining competitive. Therefore, at Continental we anticipate possible operational impacts and a few key
Reinsurance, we strive to keep a reasonable pace with these considerations we are abreast of include the following:
technological developments.
Data and Systems: The implementation of these standards
Environmental, Social and Governance (ESG) will require adapting to changes in the way data is collected
Responsibility: ESG (Environmental, Social, and Governance) and analysed to meet the new reporting requirements. The
considerations have gained significant attention in the Group is continuously enhancing its data collection processes,
reinsurance industry globally, including in Africa. While the systems, and IT infrastructure and has invested in data
concept of ESG integration is relatively new in the African management solutions to ensure accurate and timely
reinsurance market, there is a growing interest among reporting.
companies to incorporate ESG factors into their operations
and decision-making processes. Processes and Controls: The Group is updating its
accounting processes and internal controls to align with the
Regulatory bodies in Africa are recognizing the importance of requirements of IFRS 9 and IFRS 17. This includes ensuring
ESG factors in the insurance industry and are developing appropriate processes are in place for the classification and
frameworks and guidelines to encourage insurers to integrate measurement of financial instruments, impairment
ESG considerations into their strategies and operations. calculations, and insurance contract measurement and
Regulatory requirements related to ESG reporting, disclosure, disclosures.
and risk management are being introduced, driving insurers to
adopt sustainable practices. Staff Training and Expertise: The Group has also invested in
providing training and education to critical teams to ensure
Therefore, a failure to align with business operations with that a good understanding of the new standards and their
sustainable development goals, support initiatives that implications is established.
