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The City of Manila partners with Microsoft to improve its digital data infrastructure

PHILSTAR

By Patricia Mirasol

The City of Manila has inked a partnership with Microsoft Philippines to support the automation and computerization of its city processes. The three partnership areas are for the creation of resident digital identification cards (IDs); the modernization of government workplaces; and the optimization of GO Manila, an official app with features such as real property payments.

“The City of Manila has taken on an enormous challenge in their ambition to become a smart city, and we look forward to working closely with them to support their transformation efforts and, hopefully, to inspire and assist other government units and agencies across the Philippines as well,” said Andres Ortola, country general manager of Microsoft Philippines, in a press statement.

Microsoft is also working with over 1,000 other local government units (LGUs) to improve their digital infrastructure and citizen services. The work, said Joanna V. Rodriguez, Microsoft Philippines’ public sector director, is made possible through collaborations with the Department of Information and Communications Technology (DICT), the Union of Local Authorities of the Philippines (ULAP), and various organizations.

“Microsoft proactively engages with both national and local government units to explore partnership opportunities,” Ms. Rodriguez told BusinessWorld in an e-mail. “With the City of Manila, we were approached by the administrative team initially.”

Among the city’s two million residents are the poorest 350,000, many of whom do not have formal identification. The digital IDs initiative is envisioned to empower this segment to register for benefits, job training, cash support, and education.

Manila’s modernization campaign also includes providing its public-school students and leadership team with Microsoft 365 (a subscription that has document and spreadsheet apps, among others) and Microsoft Workplace (a solution that streamlines work tasks and communications), respectively.

Microsoft’s AI (Artificial Intelligence) Business School for Government, a learning path that illustrates the impact of AI in the public sector, will also be provided to improve the city’s data-driven policies and governance.

“[We will] … identify points of data interoperability within the city which can be strengthened and maximized for data governance moving forward,” Ms. Rodriguez said.

A smart city is defined as an urban area that applies various types of electronic data collection sensors to manage its assets and resources efficiently.

According to the US International Trade Administration (ITA), 17 cities in Metro Manila are advancing smart city efforts such as disaster risk mitigation, resilience management, digital health and education, and data center upgrades.

The top four cities in 2018 with the highest business revenue to invest in infrastructure development were Makati ($280 million), Manila ($209 million), Pasig ($197 million), and Quezon City ($323 million). ITA reported that these Philippine cities, including Cebu and Davao, are good prospects for firms interested in offering smart city solutions in the country.

PHL still needs to develop talent and infrastructure vs cyber threats, experts say

PIXABAY

By Bronte H. Lacsamana 

Though the Philippines is on the right track in terms of putting cybersecurity measures in place, there is still a need to educate businesses and continuously develop talent and infrastructure to fight cyberattacks, according to information security experts. 

Organizations must continue to invest in information security. The costs of exploits these days are real and the likelihood of being exploited has dramatically increased,” said William Emmanuel S. Yu, director of the Philippine Computer Emergency Response Team’s coordinating center, at the United States Agency for International Development’s (USAID) Better Access and Connectivity (BEACON) project webinar. 

The five-year BEACON project, launched by USAID on Oct. 28, is meant to increase digital connectivity in the Philippines, with the US government, via USAID, investing P1.65 billion in the country’s information and communications technology (ICT) sector. 

As of the launch, the goal of the project has been to “assist the government in automation and digitization efforts,” but at the cybersecurity webinar, opinions of cyber experts showed that there’s a need for improvement in security as well. 

Mr. Yu specified that with digital payments accounting for 20% of payments in 2020, safety risks have become extremely high. 

“We need to educate, educate, educate. User awareness must improve. Users are the first line of defense and the weakest link,” he said. 

SMALL AND MEDIUM BUSINESSES 

Seow Hiong Goh, executive director of Cisco’s global policy and government affairs in Asia Pacific, reiterated Cisco’s previous findings that more than half of small and medium businesses (SMBs) have experienced cyberattacks in the past year. 

For most companies, it takes months before they realize they’re being compromised. What’s more insidious is when attackers take data without you knowing,” he explained. “We really have a serious problem here in trying to raise awareness and capabilities.” 

Despite this, the Philippine government is already taking action on cybersecurity, according to USAID, which has already been working closely with the Department of Information and Communications Technology (DICT) even before the BEACON launch. 

“The Philippines has taken steps in the right direction to deal with this problem,” said Jeff Goebel, USAID Philippines’ acting deputy mission director. “DICT has implemented security operations and monitoring systems as well as enhanced its incident response capabilities to actively respond to such threats.” 

He added that USAID’s cybersecurity primer, released just a day before the webinar, could brief the agency’s partners such as the Philippine ICT sector on USAID’s updated approaches to cyber threats, cybersecurity, and cyber resilience. 

Mr. Goh emphasized the need for all sectors to take notice of the issue of cybersecurity: “It’s not just an ICT, finance, or telecommunications problem. It’s a problem for everyone — anyone who uses digital technology today. 

Globe At Home tops Netflix ISP Speed Index in September; 8th time in 2021

Globe again topped the Netflix ISP Speed Index in September, the eighth month this year, leading Philippine Internet Service Providers (ISPs) performance rating of the popular streaming service. Globe scored 3.4 Mbps in the Index for the month through its Globe At Home Broadband Business, higher than its 3.2 Mbps result in August. This score indicates that the Philippines is at par with other countries and regions which are experiencing world-class speeds on Netflix like Canada, Finland and South Korea.

Netflix, the world’s leading streaming entertainment service, determines monthly rankings by calculating an ISP’s performance in primetime streaming sessions based on the maximum bitrate set by combining resolution, streaming device, and encode recipe. The better a network is, the closer a session will be to reaching this maximum possible bitrate.

“We are committed to provide a better, faster and more reliable connectivity experience to our customers. Through our continuous robust network builds and fiber rollout, we hope to reach more homes across the country, and play a part in uplifting our countrymen’s lives,” said Barbie Dapul, Vice President for Marketing of Globe At Home.

As of September, Globe has rolled out an additional one million fiber lines and earmarked an unprecedented P76 billion in capital expenditures, the bulk of which will be spent on data network builds.

Experience world-class internet connectivity on your next Netflix binge with Globe At Home. Customers can watch their favorite Netflix shows by availing Globe At Home’s offering of UNLI Fiber UP 1499 with speeds of up to 35Mbps.

The internet-only unlimited plan comes in handy when attending online classes, downloading school modules, and uploading completed homework. This promo aims to support the online needs of the entire family’s new normal. So each member can attend school, work, and other online activities at the comfort of their home.

Applying for UNLI Fiber UP 1499 is easy and can be done at home. Simply visit https://shop.globe.com.ph/products/broadband/unli-plan-1499 to apply. Make sure to have one valid ID on hand for verification. Acceptable ID includes driver’s license, Philippine passport, SSS, BIR, PRC, voter’s ID, Pag-IBIG, Postal ID, PhilHealth, UMID, or NBI clearance.

For other available offers, visit https://shop.globe.com.ph/broadband-plans and follow Globe At Home on Facebook and Viber for more updates.

Globe strongly supports the United Nations Sustainable Development Goals, particularly UN SDG No. 9, which highlights the roles of infrastructure and innovation as crucial drivers of economic growth and development. Globe is committed to upholding the UN Global Compact principles and contributing to 10 UN SDGs.

 


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Facebook relaunches itself as ‘Meta’ in a clear bid to dominate the metaverse

Meta

By Marcus Carter and Ben Egliston 

Facebook chief executive Mark Zuckerberg has announced the company will change its name to Meta, saying the move reflects the fact the company is now much broader than just the social media platform (which will still be called Facebook). 

The rebrand follows several months of intensifying discourse by Mr. Zuckerberg and the company more broadly on the metaverse — the idea of integrating real and digital worlds ever more seamlessly, using technologies such as virtual reality (VR) and augmented reality (AR).  

Mr. Zuckerberg said he hoped the metaverse will be a new ecosystem that will create millions of jobs for content creators.  

But is this just a shallow PR exercise, with Mr. Zuckerberg trying to reset the Facebook brand after several scandal-ridden years, or is it a genuine bid to set the company on course for what he sees as the future of computing?  

What’s not in contention is that this is the culmination of seven years of corporate acquisitions, investments and research that kicked off with Facebook’s acquisition of VR headset company Oculus for US$2 billion in 2014.  

Oculus had risen to prominence with a lucrative Kickstarter campaign, and many of its backers were angry that their support for the “future of gaming” had been co-opted by Silicon Valley.  

While gamers fretted that Facebook would give them VR versions of Farmville rather than the hardcore content they envisioned, cynics viewed the purchase as part of a spending spree after Facebook’s US$16 billion stock market launch, or simply Mr. Zuckerberg indulging a personal interest in gaming.  

Under Facebook, Oculus has gone on to dominate the VR market with over 60% market share. That’s thanks to heavy cross-subsidization from Facebook’s advertising business and a console-like approach with the mobile “Quest” VR headset.  

Beyond Oculus, Facebook has invested heavily in VR and AR. Organized under the umbrella of Facebook Reality Labs, there are nearly 10,000 people working on these technologies — almost 20% of Facebook’s workforce. Last week, Facebook announced plans to hire another 10,000 developers in the European Union to work on its metaverse computing platform.  

While much of its work remains behind closed doors, Facebook Reality Labs’ publicized projects include Project Aria, which seeks to create live 3D maps of public spaces, and the recently released Ray-Ban Stories — Facebook-integrated sunglasses with 5-megapixel cameras and voice control.  

All these investments and projects are steps towards the infrastructure for Mr. Zuckerbeg’s vision of the metaverse. As he said earlier in the year:  

I think it really makes sense for us to invest deeply to help shape what I think is going to be the next major computing platform.  

The metaverse may eventually come to define how we work, learn and socialize. This means VR and AR would move beyond their current niche uses, and become everyday technologies on which we will all depend.  

We can guess at Facebook’s vision for the metaverse by looking to its existing approach to social media. It has molded our online lives into a gigantic revenue stream based on power, control and surveillance, fueled by our data.  

VR and AR headsets collect enormous amounts of data about the user and their environment. This is one of the key ethical issues around these emerging technologies, and presumably one of the chief attractions for Facebook in owning and developing them.  

What makes this particularly concerning is that the way you move your body is so unique that VR data can be used to identify you, rather like a fingerprint. That means everything you do in VR could potentially be traced back to your individual identity. For Facebook — a digital advertising empire built on tracking our data — it’s a tantalizing prospect.  

Alongside Project Aria, Facebook launched its Responsible Innovation Principles, and recently pledged US$50 million to “build the metaverse responsibly.”  

But, as Catherine D’Ignazio and Lauren Klein note in their book Data Feminism, responsible innovation is often focused on individualized concepts of harm, rather than addressing the structural power imbalances baked into technologies such as social media.  

In our studies of Facebook’s Oculus Imaginary (Facebook’s vision for how it will use Oculus technology) and its changes over time to Oculus’ privacy and data policies, we suggest Facebook publicly frames privacy in VR as a question of individual privacy (over which users can have control) versus surveillance and data harvesting (over which we don’t).  

Critics have derided Facebook’s announcements as “privacy theater” and corporate spin. Digital rights advocacy group Access Now, which participated in a Facebook AR privacy “design jam” in 2020 and urged Facebook to prioritize alerting bystanders they were being recorded by Ray-Ban Stories, says its recommendation was ignored.  

Appropriately enough, the metaverse under Facebook is likely to resemble the term’s literary origins, coined in Neal Stephenson’s 1992 novel Snow Crash to describe an exploitative, corporatized, hierarchical virtual space.  

But it doesn’t have to be this way. Tony Parisi, one of the early pioneers of VR, argues we already have a blueprint for a non-dystopian metaverse. He says we should look back to the original, pre-corporatized vision of the internet, which embodied “an open, collaborative and consensus-driven way to develop technologies and tools.”  

Facebook’s rebrand, its dominance in the VR market, its seeming desire to hire every VR and AR developer in Europe, and its dozens of corporate acquisitions — all this sounds less like true collaboration and consensus, and more like an attempt to control the next frontier of computing.  

We let Facebook rule the world of social media. We shouldn’t let it rule the metaverse. — The Conversation 

 

Marcus Carter is senior lecturer in Digital Cultures, SOAR Fellow, at the University of Sydney. 

Ben Egliston is postdoctoral research fellow at the Digital Media Research Centre, Queensland University of Technology. 

This article is republished from The Conversation under a Creative Commons license. Read the original article. 

 

The Conversation

WHO, partners seek $23.4B for new COVID-19 war chest

GENEVA — The World Health Organization (WHO) and other aid groups on Thursday appealed to leaders of the world’s 20 biggest economies to fund a $23.4 billion plan to bring coronavirus disease 2019 (COVID-19) vaccines, tests, and drugs to poorer countries in the next 12 months.  

WHO Director-General Tedros Adhanom Ghebreyesus said the Group of 20, whose leaders are meeting in Rome at the weekend, had the political and financial power needed to end the pandemic by funding the plan, which he said could save five million lives.  

The latest update of the so-called Access to COVID-19 Tools Accelerator (ACT-A), until September 2022, is expected to include use of an experimental oral antiviral pill made by Merck & Co for treating mild and moderate cases.  

If the pill is approved by regulatory authorities, the cost could be as little as $10 per course, the plan said, in line with a draft document seen by Reuters earlier this month.  

“The request is for $23.4 billion. That’s a fair amount of money, but if you compare with the damage also done to global economy by the pandemic it is not really that much,” Carl Bildt, WHO Special Envoy to the ACT-Accelerator, told reporters earlier.  

Mr. Bildt, a former Swedish prime minister, acknowledged that the ACT-A has struggled to secure previous financing.  

“I hope and urge that the G20 will make a commitment to end the pandemic,” Norwegian Prime Minister Jonas Gahr Stoere, whose country co-chairs the fund-raising effort, told the media briefing.  

Equal budgets of $7 billion are earmarked for both vaccines and diagnostic tests, with a further $5.9 billion for boosting health systems and $3.5 billion for treatments including antivirals, corticosteroids, and medical oxygen.  

Tedros noted at the briefing that global cases were rising for the first time in two months, driven by Europe.  

BOOSTER VACCINES  

COVAX, the vaccines arm of the ACT-A, has delivered some 400 million COVID-19 doses to more than 140 low- and middle-income countries, where vaccination rates remain low, WHO chief scientist Soumya Swaminathan said.  

About 82 countries are likely to miss a WHO global target of 40% vaccination coverage by year-end, but some of them could if supplies start flowing, she said.  

“One of the things that is now interfering in a big way is the need for boosters, more and more high-income countries are going in for the booster doses and this is now sucking up the vaccine doses as well,” Ms. Swaminathan added.  

Nearly a million booster jabs are being given each day, “three times the amount of vaccines being administered in low-income countries,” she said.  

Referring to India, which resumed “relatively modest” COVID-19 vaccine exports this month after suspending them in April due to its domestic epidemic, Ms. Swaminathan said: “I think these volumes coming out of India will go up significantly.”  

MERCK DRUG  

The US Food and Drug Administration is considering emergency use authorization of molnupiravir, the antiviral pill Merck has developed with Ridgeback Biotherapeutics. It was shown in a clinical trial to halve the risk of serious disease and death when given early for COVID-19.  

“This is a drug that we are currently evaluating and we met with Merck on Friday to discuss data from their current clinical trials that are under way in other countries,” said Maria van Kerkhove, the WHO’s technical lead on COVID, adding the agency hoped to issue guidance on its use in coming weeks. — Stephanie Nebehay/Reuters  

Trash and burn: Big brands’ new plastic waste plan

JAKARTA — The global consumer goods industry’s plans for dealing with the vast plastic waste it generates can be seen here in a landfill on the outskirts of Indonesia’s capital, where a swarm of excavators tears into stinking mountains of garbage.  

These machines are unearthing rubbish to provide fuel to power a nearby cement plant. Discarded bubble wrap, take-out containers and single-use shopping bags have become one of the fastest-growing sources of energy for the world’s cement industry.  

The Indonesian project, funded in part by Unilever PLC, maker of Dove soap and Hellmann’s mayonnaise, is part of a worldwide effort by big multinationals to burn more plastic waste in cement kilns, Reuters has detailed for the first time.  

This “fuel” is not only cheap and abundant. It’s the centerpiece of a partnership between consumer products giants and cement companies aimed at burnishing their environmental credentials. They’re promoting this approach as a win-win for a planet choking on plastic waste. Converting plastic to energy, these companies contend, keeps it out of landfills and oceans while allowing cement plants to move away from burning coal, a major contributor to global warming.  

Reuters has identified nine collaborations launched over the last two years between various combinations of consumer goods giants and major cement makers. Four leading sources of plastic packaging are involved: The Coca-Cola Company, Unilever, Nestle S.A. and Colgate-Palmolive Company. On the cement side of the deals are four top producers: Switzerland’s Holcim Group, Mexico’s Cemex SAB de CV, PT Solusi Bangun Indonesia Tbk (SBI) and Republic Cement & Building Materials, Inc., a company in the Philippines.  

These projects span the world, from Costa Rica to the Philippines, El Salvador to India. In Indonesia, for instance, Unilever is partnering with SBI, one of that country’s largest cement makers.  

The alliances come as the cement industry — the source of 7% of the world’s carbon dioxide emissions — faces rising pressure to reduce these greenhouse gases. Consumer brands, meanwhile, are feeling the heat from lawmakers who are banning or taxing single-use plastic packaging and pushing so-called polluter-pays legislation to make producers bear the costs of its clean up.  

Critics say there’s little green about burning plastic, which is derived from oil, to make cement. A dozen sources with direct knowledge of the practice, among them scientists, academics and environmentalists, told Reuters that plastic burned in cement kilns emits harmful air emissions and amounts to swapping one dirty fuel for another.  

More importantly, environmental groups say, it’s a strategy that could potentially undercut efforts spreading globally to boost recycling rates and dramatically slash the production of single-use plastic.  

Such thinking is naive, said Axel Pieters, chief executive of Geocycle, the waste-management arm of Holcim Group, one of the world’s largest cement makers and partner with Nestle, Unilever and Coca-Cola in plastic-fuel ventures. Mr. Pieters told Reuters that burning plastic in cement kilns is a safe, inexpensive and practical solution that can dispose of huge volumes of this trash quickly. Less than 10% of all the plastic ever made has been recycled, in large part because it’s too costly to collect and sort. Plastic production, meanwhile, is projected to double within 20 years.  

“Thinking that we recycle waste only, and that we should avoid plastic waste, then you can quote me on this: People believe in fairy tales,” Mr. Pieters said.  

Unilever would not comment specifically on the Indonesia project. It said in an e-mail that in situations where recycling isn’t feasible, it would explore “energy recovery initiatives.” That’s industry parlance for burning plastic as fuel.  

Coca-Cola, Unilever, Colgate, and Nestle did not respond to questions about the environmental and health impacts of burning plastic in cement kilns. The companies said they invest in various initiatives to reduce waste, including boosting recycled content in their packaging and making refillable containers.  

Cemex, SBI, Republic Cement and Holcim’s Geocycle unit told Reuters their partnerships with consumer goods firms were aimed at addressing the global waste crisis and reducing their dependence on traditional fossil fuels.  

Exactly how much plastic waste is being burned in cement kilns globally isn’t known. That’s because industry statistics typically lump it into a wider category called “alternative fuel” that comprises other garbage, such as scrap wood, old vehicle tires and clothing.  

The use of alternative fuel has risen steadily in recent decades and already is the dominant energy source for the cement industry in some European countries. There’s no question the amount of plastic within that category has increased and will keep climbing given a worldwide explosion of plastic waste, according to 20 cement industry players interviewed for this report, including company executives, engineers and analysts. Reuters also reviewed data from cement associations, individual countries and analysts that confirmed this trend.  

For example, Geocycle currently uses 2 million tonnes of plastic waste a year as alternative fuel at Holcim plants worldwide, according to Geocycle CEO Mr. Pieters, who said the company intends to increase this to 11 million tonnes by 2040, including through more partnerships with consumer goods companies.  

Pieters said the cement industry has the capacity to burn all the plastic waste the world currently produces. The United Nations Environment Programme estimates that figure to be 300 million tonnes annually. That dwarfs the world’s plastic recycling capacity, estimated to be 46 million tonnes a year, according to a 2018 estimate by the Organisation for Economic Co-operation and Development (OECD), a global policy forum.  

Plastic pollution, meanwhile, is bedeviling communities whose landfills are reaching capacity and despoiling the Earth’s wild places. Plastic garbage flowing into the oceans is due to triple to 29 million tonnes a year by 2040, according to a study published last year by the Pew Charitable Trusts. This detritus is endangering wildlife and contaminating the seafood humans consume.  

“The cement industry is definitely a solution,” Geocycle’s Mr. Pieters said.  

TOXIC EMISSIONS  

Consumer goods giants are turning to cement firms for help in reducing plastic litter as other initiatives stumble. Reuters reported in July that a set of new “advanced” plastic recycling technologies promoted by big brands and the plastic industry had suffered major setbacks across the world.  

Cement-making is one of the world’s most energy-intensive businesses. Fuel – mainly coal – is its single-biggest expense, industry executives said. In the 1970s, producers looking to reduce costs began stoking kilns with rubbish such as tires, biomass, sewage sludge – and plastic. Those materials aren’t as efficient as coal, but are virtually free. Some local governments even pay cement makers to take this waste.  

In Europe, refuse now makes up roughly half the fuel used by the cement industry. In Germany, the bloc’s biggest producer, the ratio is 70%, according to 2019 data from the Global Cement & Concrete Association (GCCA), a London-based trade organization. The United States uses 15% alternative fuel in its kilns, according to the Portland Cement Association, a US industry group. Spokesperson Mike Zande said its members have the capacity to catch up with Europe.  

While cost-cutting remains the primary driver, the industry in recent years has begun touting its garbage fuel as a way to reduce the “societal problem” of plastic waste, said Ian Riley, CEO of the London-based World Cement Association (WCA), which represents producers in developing countries.  

So it was logical that cement makers would team up with consumer goods companies, the largest source of single-use plastic packaging, in the recent partnerships to burn discarded plastic in their kilns.  

In emerging markets, big brands sell a slew of food and hygiene products packaged in plastic sachets, typically single-serving portions tailored to the budgets of poor households. Billions of these flexible pouches are sold each year. Sachets are nearly impossible to recycle because they’re made of layers of different materials laminated together, usually plastic and aluminum, that are difficult to separate.  

Indonesia, an archipelago of more than 270 million people, is the second-largest contributor to ocean plastic pollution behind China, partly due to its widespread use of sachets, according to a 2015 study published in the journal Science. Plastic garbage can be seen everywhere around Jakarta, the sprawling capital of more than 10 million people. It clogs storm drains, litters its teaming slums and mars its shoreline.  

Developing countries have generally welcomed assistance with waste management. Thus Indonesia was a natural location for Unilever’s waste-fuel venture with cement maker SBI and the local Jakarta government. At last year’s launch, Andono Warih, head of Jakarta’s environment service, praised the initiative and expressed hope that it would spark other such collaborations.  

The project uses plastic that’s already been buried in the region’s Bantar Gebang landfill, one of the largest dumps in Asia. Waste excavated by earth-moving equipment is transported to a warehouse at the landfill site. There, it is shredded, sieved and dried into a brown mix resembling manure. That material, known as Refuse Derived Fuel (RDF), is then fed into the kiln at an SBI cement plant in Narogong, just outside Jakarta.  

SBI currently uses 20% RDF at that plant, a figure that could increase to 35%, according to Ita Sadono, SBI’s business development manager. The operation still relies primarily on coal, she said, but she contends RDF is “significantly helping to reduce plastic waste.”  

Unilever is helping to fund a second RDF project in Cilacap, an industrial region in Central Java, according to SBI and a 2020 sustainability report by Unilever’s local Indonesian unit. The two facilities could send 30,000 tonnes of plastic waste per year to SBI’s cement plants, according to a Reuters analysis of data provided by SBI.  

Unilever did not respond to detailed questions about these projects. Ms. Sadono said in a text message that Reuters’ calculations were “OK,” without giving further details.  

About two kilometers from SBI’s cement plant near Jakarta, Dadan bin Anton, 63, runs a roadside stall selling plastic sachets of soap, washing powder and instant coffee, including brands owned by Unilever. He said he often has trouble breathing and blames the cement plant.  

“People here are breathing dust every day,” he said.  

SBI has invested in mitigation measures to cut dust at its plants, Sadono said. And it isn’t clear whether the cement facility has anything to do with Mr. Dadan’s burning chest. Jakarta boasts some of the dirtiest air in Asia. Pollutants from industry smokestacks, agricultural fires and auto exhaust routinely blanket the city.  

But some scientists say incinerated plastic is a dangerous new ingredient to add to the mix, particularly in developing nations where air-quality rules often are weak and enforcement spotty.  

Plastic releases harmful substances like dioxins and furans when burned, said Paul Connett, a retired professor of environmental chemistry and toxicology at St. Lawrence University in Canton, New York, who has studied the poisonous byproducts of burning waste. If enough of those pollutants escape from a cement kiln, they can be hazardous for humans and animals in the surrounding area, Mr. Connett said.  

Such fears are overblown, said Claude Lorea, cement director at GCCA, the industry group representing big cement firms including Holcim and Cemex. She said super-heated kilns destroy all toxins resulting from burning any alternative fuel, including plastic and hazardous waste.  

But things can go wrong.  

In 2014, a cement plant in Austria released hexachlorobenzene (HCB), a highly toxic substance and suspected human carcinogen, after the facility burned industrial waste contaminated with the pollutant. Cheese and milk sourced from cattle raised near that plant in southern Carinthia state were tainted, Austria’s health and food safety agency found. And blood samples drawn from area residents also contained HCB, which can damage the nervous system, liver and thyroid.  

An investigation commissioned by the state government found multiple failures by local regulators and the cement plant, including that the kiln was not running hot enough to destroy contaminants like HCB.  

The Austrian cement maker which operates the plant, w&p Zement GmbH, told Reuters that it had worked to eliminate all the environmental pollution from the incident and that it had provided help to the community such as replacing contaminated animal feed.  

Carinthia province spokesperson Gerd Kurath said in an email that the government’s continued monitoring of air, soil, and water samples in the area shows that contamination levels have declined.  

The cement industry, meanwhile, is heralding waste-to-fuel as a way to fight global warming. That’s because burning refuse, including plastic, emits fewer greenhouse gases than coal, the GCCA trade group said.  

Burning garbage “reduces our fossil fuel reliance,” spokesperson Lorea said. “It’s climate neutral.”  

The European Commission, which sets emission rules in Europe, told Reuters that plastic does emit fewer carbon dioxide emissions than coal but more than natural gas, another fuel used by the cement industry.  

The US Environmental Protection Agency, which regulates environmental policy in the world’s largest economy, reached a different conclusion. It said in a statement there is no significant climate benefit to be gained from substituting plastic for coal, and that burning this waste in cement kilns can create harmful air pollution that must be monitored.  

Measuring plastic’s CO2 emissions against those of coal, the world’s dirtiest fossil fuel, is not the benchmark to use if the cement industry is serious about fighting global warming, said Lee Bell, advisor to the International Pollutants Elimination Network, a global coalition working to eliminate toxic pollutants. Reducing the industry’s massive carbon emissions, he said, requires a switch to fuels such as green hydrogen, a more expensive but low-polluting fuel produced from water and renewable energy.  

“The cement industry should leap-frog the whole burning-waste paradigm and move to clean fuel,” Mr. Bell said.  

The GCCA told Reuters the industry is improving energy efficiency and is considering the use of green hydrogen.  

EVER MORE PLASTIC  

While cement plants in industrialized countries are gearing up to burn more plastic, explosive growth is anticipated in the developing world.  

China and India together account for 60% of the world’s cement production in facilities whose primary fuel is coal. Over the next decade, these countries have set targets of using alternative fuel to stoke 20% to 30% of their output. If they reached just a 10% threshold, that would equate to burning 63 million tonnes of plastic annually, up from 6 million tonnes now, according to SINTEF, a Norwegian scientific research group. That’s more plastic waste than the United States generates each year.  

In 2019, 170 countries agreed to “significantly reduce” their use of plastic by 2030 as part of a United Nations resolution. But that measure is non-binding, and a proposed ban on single-use plastic by 2025 was opposed by several member states, including the United States.  

Thus the waste-to-fuel option may well become an unstoppable juggernaut, said Matthias Mersmann, chief technology officer at KHD Humboldt Wedag International AG, a German engineering firm that supplies equipment to cement plants worldwide.  

Plastic waste is quickly outstripping countries’ capacity to bury or recycle it. Burning it eliminates large amounts of this material quickly, with little special handling or new facilities required. There are an estimated 3,000 or more cement plants worldwide. All are hungry for fuel.  

“There’s only one thing that can hold up and break this trend, and that would be a very strong cut in the production of plastics,” Mr. Mersmann said. “Otherwise, there is nothing that can stop this.”  

That momentum has some environmentalists worried, including Sander Defruyt, who heads a plastics initiative at the Ellen MacArthur Foundation, a United Kingdom-based nonprofit focused on sustainability. The foundation in 2018 worked out waste-reduction and recycling targets with Coca-Cola, Nestle, Unilever, Colgate-Palmolive and hundreds of other consumer brands.  

Mr. Defruyt said the foundation does not support its partner companies’ pivot towards incineration. Burning plastic for cement fuel, he said, is a “quick fix” that risks giving consumer goods companies the green light to continue cranking out single-use plastic and could reduce the urgency to redesign packaging.  

“If you can dump everything in a cement kiln, then why would you still care about the problem?” Mr. Defruyt said.  

Coca-Cola, Nestle, Unilever, and Colgate-Palmolive said their cement partnerships are just one of several strategies they’re pursuing to address the waste crisis.  

‘PLASTIC PRAYERS’  

In the central England village of Cauldon, residents have complained in recent years to the local council and Britain’s environmental regulator about noise, dust and smoke coming from a nearby cement plant owned by Holcim. Those efforts have failed to derail the expansion of that facility to burn more plastic.  

When completed next year, alternative fuel, including “non-recyclable” plastics such as potato chip bags, will account for up to 85% of the facility’s fuel, according to planning documents filed with local authorities on behalf of Geocycle, which will manage the project.  

The move will recover energy from plastic waste otherwise destined for landfills, the documents said.  

Cauldon resident Lucy Ford, 42, said the cement maker’s plans have only added to some villagers’ fears about emissions. “They say they are the answer to all of our plastic prayers,” she said. “I don’t like the idea of it.”  

Geocycle’s Mr. Pieters said he understood the community’s concerns. He said the company complies with all local regulations and that it carefully monitors the plant’s emissions, which would be lowered by the upgrades.  

Britain’s Environment Agency said in an e-mail that it took all complaints about the plant seriously. It said the Cauldon facility has a permit to burn waste and that the plant has to comply with its regulations.  

Back in Indonesia, Unilever and SBI told Reuters that using plastic for energy was preferable to leaving it in a landfill.  

Local environmentalists say they are alarmed that cement kilns could be shaping up as the fix for a nation flooded with plastic waste.  

It would allow consumer brands to continue business as usual, while adding to Indonesia’s air-quality woes, said Yobel Novian Putra, an advocate with the Global Alliance for Incinerator Alternatives, a coalition of groups working to eliminate waste.  

“It’s like moving the landfill from the ground to the sky,” Mr. Putra said. — Joe Brock, Yuddy Cahya Budiman, John Geddie and Valerie Volcovici/Reuters

Insurance growth amid uncertain times

After experiencing some decreases in the year of the coronavirus disease 2019 (COVID-19) crisis onset, the local insurance market is seeing growth.

Data from the Insurance Commission (IC) showed that the premium income of insurance companies and mutual benefits associations (MBA) dropped by almost 4% from January to September last year, generating P216.5 billion from P224.97 billion in the same period in 2019. Net income also decreased by 9.85%.

Nonetheless, by the end of 2020, total premiums have registered a 1.18% increase from that of 2019. Though net income still dropped by 8.60%.

Premiums then surged in the first quarter of the present year. Gross premiums jumped 27.81% to P99.89 billion from P78.15 billion a year earlier. 

In the same period, the life insurance sector reported a total premium income of P83.2 billion, increasing 36.62% from the previous year. MBAs, meanwhile, saw an 11.53% growth with its P3.18 billion of total premiums. But non-life insurance companies earned 10.33% lessened premiums and have a 7.95% decrease in gross premiums written as well.

The total net income grew by 45.64% in the first quarter, with life and non-life increasing their total net income to 38.16% and 626.2%, respectively.

Insurance penetration, which is the industry’s contribution to the economy, is also up from 1.76% to 2.3% in the first quarter.

According to IC Commissioner Dennis Funa, this growth in the insurance market can be attributed to growing number of Filipinos enrolling in insurance policies given the crisis situation. However, at the same time, the economy registered a decline.

“The data is a bit warped nowadays. It does not reflect a normal situation. The reason is that the [gross domestic product] has gone down from the previous years. So, the denominator does not reflect a continuity of growth,” Mr. Funa was quoted as explaining in a report last month.

“[Clientele] has also been increasing, but it would not be at 2.3 [percent] if under normal times the growth is still real,” he added.

Mr. Funa also credited IC’s push to shift products to digital and the policy to consider insurance providers as frontline workers for the first-quarter growth in the insurance sector.

As the economy reopened and heightened the demand for life and non-life insurance policies, premiums ballooned more than 37% to P187 billion in the second quarter of 2021.

Based on a report by The Philippine Star earlier this week, IC said that insurers posted a combined profit of P24.63 billion in the said period, over a 29% increase from P19.03 billion a year ago.

The industry has also increased its investments, now having P1.75 trillion, which was a 12% increase from P1.56 trillion.

Life insurers have sold premiums that swelled almost 44% to P155.17 billion on on increases in single premiums, first year, and renewal premiums for traditional policies. Net premiums written was up by 13% to P25.51 billion for the non-life, which is attributed to the hikes in automotive policies, among others. While MBAs grew their premium income by 19% to P6.46 billion.

“The growth of the life and non-life insurers’ and MBAs’ aggregate premiums and contributions earned and their aggregate net income in the second quarter of 2021 are indicative of economic recovery amid the COVID-19 pandemic,” Mr. Funa was quoted as saying in the report.

Furthermore, insurers have expanded the released amount of benefits to P69.94 billion from P44.26 billion or almost 47%. For the IC Commissioner, this year-on-year increase in benefits paid during the quarter showed the responsiveness of life and non-life insurers as well as the MBAs to the people amid the challenges of the pandemic.

During the first half of the year, according to another report, IC shared that the insurance industry has paid P4.35 billion in COVID-19 insurance claims, about half of which, P2.06 billion, was given by the health maintenance organizations (HMOs), while life insurers provided P1.98 billion. MBAs accounted for P191.7 million, while P119.1 million from non-life insurers.

According to Mr. Funa, the insurance industry has issued P8.25 billion of COVID-19 claims since the pandemic started in the first quarter of the previous year. P3.98 billion came from HMOs, while life insurers released P3.44 billion. MBAs followed with P546.6 million, and the non-life paid P279.3 million.

Global outlook

The insurance industry, in the global perspective, likewise saw paradigm shifts with the heightened risk awareness among consumers and businesses. Digitalization has also transformed sales and services for both life and non-life insurers. These are drivers of insurance market growth, according to the Swiss Re Institute.

In its publication sigma 3/2021 — World insurance: the recovery gains pace, the Swiss Re Institute shared that global health and protection-type insurance premiums gained respective increases by 1.9% and 1.7% in 2020. Meanwhile, it expected a strong recovery in global life insurance premiums to above-trend growth of 3.8% this year and 4% in 2022, seeing a benefit as the pandemic triggered risk awareness.

Swiss Re Institute observed that the global insurance industry is resilient as it weathered the pandemic crisis. It reported that premiums dipped milder compared to the situation during the Global Financial Crisis of 2008-2009. 

Expecting a faster recovery for life and non-life insurance, it presumed an above-trend growth of 3.3% and 3.9% for 2021 and 2022, respectively, taking the total global direct premiums written this year to 10% higher than the pre-crisis levels in 2019.

Drawbacks to these forecasts might include protracted recovery due to soft demand around the world; ineffective stimulus as debt burdens constrain policy; the likelihood of COVID-19 variants emerging; and slow recovery in the labor market. — Chelsey Keith P. Ignacio

Changed perspectives on insurance among Filipinos

The pandemic has changed many aspects of the consumer’s life, most significant of which is a natural reassessment of priorities to favor health and well-being. The Insurance Commission (IC) found that Filipinos are putting more money on insurance, from an average of P723.43 per individual a year ago to P912.2 this year, up 26%.

As a result, insurance penetration, or the contribution of the insurance industry to the economy, soared to an all-time high of 2.3% of the gross domestic (GDP) in the first quarter from 1.76% in 2020. And while Insurance Commissioner Dennis Funa said that while the data does not reflect a normal continuation of growth because of a number of factors, membership in the industry has seen an increase during the duration of the health crisis.

Similarly, more Filipinos are seeking microinsurance coverage under the pandemic. According to unaudited quarterly reports from microinsurance providers such as mutual benefit associations and life and non-life insurance companies, the IC said the total estimated number of lives covered by microinsurance products ending the fourth quarter of 2020 reached 50.35 million. This marked an 11.56% increase from the 45.13 million lives covered the fourth quarter of 2019.

“The data is a bit warped nowadays. It does not reflect a normal situation. The reason is that the GDP has gone down from the previous years. So, the denominator does not reflect a continuity of growth,” Mr. Funa had told reports.

The surge in demand for insurance, however, reflects a change in the consumer seen by other studies such as that of Manulife Philippines’ research on “Understanding Filipino Sentiments Towards Health and Critical Illness.” The study found that while many Filipinos still face barriers in embracing better financial and lifestyle habits, many recognize the increased importance of prioritizing their health. Many Filipinos according to the study are reprioritizing health out of concern for their families’ welfare, especially in the face of the financial burdens of illnesses.

“These evolving times have opened our eyes to the importance of health and wellness, and importantly, made many Filipinos appreciate the value of insurance protection,” said Melissa Henson, senior vice-president and chief marketing officer of Manulife Philippines.

“While Filipinos are universally aware of the importance of staying healthy, we saw that their behaviors are largely influenced by fears and worries, including concern for their family and feeling financially unprepared for illnesses.”

Furthermore, during the pandemic, health, safety and family make up the top three worries of Filipinos, followed by concerns about work, well-being, savings, investment, home and community, insurance, friends, me-time, and love.

Another study by Pru Life UK found that more Filipinos — the younger generation in particular — have been making wise decisions with regard to finances especially in terms of insurance coverage.

According to the latest research from the AI and Data Analysis Center, the advanced technology solutions division of Pru Life UK, the market for health riders or additional benefits attached to life insurance policies remain resilient in spite of the country’s disrupted and slowing economy, suggesting that Filipinos are allocating more of their hard-earned incomes away from other options in favor of health protection.

“This finding validates our assumption that health protection has become a necessity for a growing number of Filipinos, even in these challenging times,” said Pru Life UK President and CEO Antonio De Rosas.

“The resilience of health protection in the Philippines is in line with the trend we are observing across the region, where health insurance has shown a steady growth in most of our markets despite local lockdown restrictions. This is likely due to an increased awareness of the importance of health protection in facing the pandemic,” Prudential Corporation Asia Chief Health Officer Andrew Wong said.

“Addressing this reality is a matter of making insurance products more accessible to meet the growing needs. The pandemic has taught us that the mode of delivery is as important as the price for customers. In this respect, our industry has been fortunate in the sense that we have been able to continue with our operations despite unprecedented restrictions,” Mr. De Rosas added. — Bjorn Biel M. Beltran

Finding the ‘next normal’ of business

By Bjorn Biel M. Beltran, Special Features Writer

Nearly two years into the pandemic has left many businesses in the world unsure of their prospects. Uncertainty reigns in an environment where most major economies are expected to lose anywhere between 2.9% to 4.5% of their gross domestic product — or up to almost 3.94 trillion US dollars of lost economic output, according to Statista.

Yet things are looking up. The World Bank projects the global economy to stage a robust 5.6% recovery this year, even if the rebound is expected to be uneven across countries. This recovery is mostly reliant on the strength of major economies such as the United States and China.

Coronavirus disease 2019 (COVID-19) will cast a very long shadow. While growth for almost every region of the world has been revised upward for 2021, the World Bank expects many continue to grapple with COVID-19 and its ramifications. Many countries will be unable to regain their lost momentum for an extended period, and this will largely shape the path of global economic activity.

“A lot of companies are waiting to see how much longer this pandemic will last. Some of them have made early decisions, downsizing, rightsizing, but many are on a wait-and-mode before committing to business decisions related to their real estate,” Christophe Vicic, country head of JLL Philippines Inc., told BusinessWorld in an interview. JLL is a global real estate services firm specializing in commercial property and investment management.

“But overall, the challenges remain. I think we need to understand that the real estate landscape will not go back to normal any time soon,” he added.

Mr. Vicic noted that all businesses across industries have had to adapt to the pandemic’s challenges. Indeed, many of these changes are visibly apparent, from the adoption of work-from-home business models to accelerated digitalization. In the Philippine real estate industry where JLL Philippines operates, many developers are readjusting their strategies to take advantage of BPO firms looking to create more smaller offices in the provinces to reduce business risks.

“One of the challenges that many Metro Manila-based companies had when the region was in lockdown was that all their operations were centralized in Metro Manila. You can’t operate as easily as those companies that have three or four smaller offices spread in other regions,” he said.

Furthermore, sustainability, which was once considered a “nice to have” bonus, is now viewed as the only way forward by many consumers and organizations across the globe. With the built real estate environment contributing to around 40% of total carbon emissions, many real estate companies are making sustainability pledges, shifting their priorities towards green buildings.

This further feeds into the growing trend revolving around employee wellness, safety, and security.

“As an employee, when you go out to work, eat at a restaurant, shop, or whatever activity you go outside your home for, you want to have a sense of safety and security. And I think this will influence the real estate of the future. To reinforce safety and security, there will be bigger offices with less people to allow physical distancing, which might mean organizations spreading their offices into more diverse locations closer to the homes of the employees,” Mr. Vicic said.

“In terms of workplaces, the new purpose of the office has transformed to support the working life of employees: to preserve their engagement, emotional well-being, and mental health. Historically, the workplace allocates majority of its area to individual spaces, but JLL believes that the future of office will be about collaboration and socialization. New workplace investments will be required to enhance human experience to support the working life of employees, and in turn, drive their performance. The wellbeing of the individual will remain one of the major trends that have emerged from the COVID pandemic,” he added.

When more than 19 million workers in the United States have quit their jobs since April, a phenomenon exacerbating industry-wide disruptions due to COVID-19, the value of employees in business has never been more relevant. Global management consulting firm McKinsey and Company highlighted the importance of understanding and creating a meaningful employer-employee relationship in the new normal.

“If the past 18 months have taught us anything, it’s that employees crave investment in the human aspects of work. Employees are tired, and many are grieving. They want a renewed and revised sense of purpose in their work. They want social and interpersonal connections with their colleagues and managers. They want to feel a sense of shared identity. Yes, they want pay, benefits, and perks, but more than that they want to feel valued by their organizations and managers. They want meaningful — though not necessarily in-person — interactions, not just transactions,” McKinsey wrote.

“By not understanding what their employees are running from, and what they might gravitate to, company leaders are putting their very businesses at risk. Moreover, because many employers are handling the situation similarly — failing to invest in a more fulfilling employee experience and failing to meet new demands for autonomy and flexibility at work — some employees are deliberately choosing to withdraw entirely from traditional forms of full-time employment.”

If left unaddressed, issues in employee experience will further contribute to what the company dubs as “The Great Attrition.” According to McKinsey’s research, 40% of surveyed employees said they are at least somewhat likely to quit in the next three to six months, while 18% of the respondents said their intentions range from likely to almost certain. These findings were found to be consistent across all five of the countries surveyed (Australia, Canada, Singapore, the United Kingdom, and the United States) and were broadly consistent across industries.

Businesses in the leisure and hospitality industry — which have already suffered the brunt of the pandemic’s impacts — are the most at risk for losing employees, but many healthcare and white-collar workers say they also plan to quit. Even among educators — the employees least likely to say they may quit — the study found that almost one-third reported that they are at least somewhat likely to do so.

Good leadership is essential in this crucial period of transition. And for Mr. Vicic of JLL Philippines, good leaders today need to do more than keep business performance and profits in mind.

“The need for compassion and understanding of the individual has redefined what I would call a good leader. Yes, we still have performance, targets to achieve, bottom line revenues to generate, but it has to be linked to well-being,” the country head said.

“The old days of performance at any price and any cost have gone. And if we want to ensure that we can continue to do business, I think the individual employee voice will have to be heard much more than it was pre-pandemic.”

Advising with technology and sustainable solutions

JLL Philippines recently achieved WELL pre-certification for its Head Office at the NEX Tower in Makati, embodying its commitment to sustainability through its own facilities.​

Throughout the crisis, the words technology and sustainability come into mind among businesses. For one, the pandemic has compelled them to digitalize as a response to travel restrictions and safety priorities, while green and inclusive developments have been more and more significant to be part of their agendas.

JLL is among those businesses. Yet, being a provider of end-to-end real estate advisory services, the firm has also supported others in boosting their technologies and sustainability.

JLL is a technology-driven global consultancy firm committed to building a better tomorrow through its sustainability program, which thus becomes more highlighted these times.

The objective of the firm since day one of the pandemic is simple: “It was not about making a sale, it was about giving advice on real estate to investors, developers, and tenants,” shared Christophe Vicic, country head of JLL Philippines.

An advocate of PropTech, JLL does real estate with a data-driven approach that allows them to get the relevant market intelligence on various types of properties, as well as gauge the happiness and productivity of occupiers. The firm utilizes technologies for various real estate services, whether it is for scoping investment opportunities, finding the right place and size to lease, building efficiency and transparency in executing real estate projects, and increasing asset value in properties through an end-to-end facilities management tool.

Among these tools is MapIT, JLL’s proprietary location intelligence service technology, which allows clients to get the right data — such as snapshots of key real estate indicators and market and competitive scan — to make the right business decision.

The firm also has a separate division called JLL Technologies that has different pillars. One of which is JLL Spark, an investment fund looking for real estate-related companies, small companies, and startups around the world that have products or services that could benefit the firm and its clients.

JLL Philippines seeks to be recognized as a technology company working in the real estate sector. “Whatever we do, we want to ensure that it’s done with the latest updated data and technology,” said Mr. Vicic. “Because we believe that one of the tools that can create sustainability and a greener world [is] technology.”

As part of its purpose, to build the future of the real estate for a better world that is more sustainable, the firm became a signatory of the World Green Building Council’s Net Zero Carbon Buildings Commitment in 2020. It is also a founding partner of Bloomberg Green, a new multiplatform editorial brand focused on climate change news, analysis, and solutions.

JLL’s sustainability strategy centers on bringing long-term value to stakeholders by creating resilient buildings, healthy spaces, and inclusive places. And to drive towards that sustainable change, the firm entrenches sustainability in each of its endeavors through the four pillars of its program: Clients, People, Workplaces, and Communities. These are supported by the firm’s commitment to its values of teamwork, ethics, and excellence.

JLL Philippines recently achieved WELL pre-certification for its Head Office at the NEX Tower in Makati, embodying its commitment to sustainability through its own facilities.​

A key pillar of its sustainability strategy is to guide its clients towards achieving net-zero carbon emissions. JLL commits to reaching this net-zero in all its areas of operations and the sites of clients by 2040.

Its advisory service on energy and sustainability helps its clientele in their sustainability strategy and reporting; renewable energy supply; building assessments and optimization; portfolio energy and sustainability management; and ratings and certifications.

“This will be all the advice about the future real estate that has to be green and the construction to be sustainable. It’s everybody’s work, not only the real estate advisors, developers, and construction companies. It’s also the tenants,” Mr. Vicic said.

Sustainability and technology are among the several consulting services offered by JLL. It has fully integrated services that can attend to various real estate advisory needs of property owners, investors, and occupiers. The firm covers capital markets; office leasing advisory; workplace strategy; logistics and industrial; supply chain; hotels and hospitality; property and asset management; work dynamics; research; strategic consulting; and valuation.

“The approach will always be holistic,” said Mr. Vicic, adding that this was what the firm has done for the past two years and would continue doing beyond the crisis. “There will be more listening to our client and providing a solution by putting a team of experts from all our service line together.”

JLL has been operating in the Philippines since 1997 as a 100% wholly owned entity and currently manages about 4.4 million square meters of real estate with a workforce of over 1,100 employees. With more than two decades of local expertise working hand-in-hand with its global legacy, JLL provides to the Philippine real estate market an unparalleled synergy of services with a strong commitment to achieve real estate ambitions through future-ready approaches. For further information, visit www.jll.com.ph.

 


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Fast-tracking trends in the insurance industry

Photo from freepik

Several transformations have disrupted the traditional operations and perspectives towards the insurance industry, being compelled by the implications of the current pandemic.

As the crisis persists to affect the industry and its consumers, some major trends that emerge in the insurance sector over the year would likely stay or accelerate in the following year.

Technologies and digitalization are developments that almost every industry has implemented to adapt to the new normal. Insurance companies are no different.

“Cutting-edge technologies are quickly maturing. While AI (artificial intelligence), IoT (Internet of Things), and big data have been buzzwords until recently, today, it is difficult to imagine the future of insurance without these technologies,” Tal Daskal, CEO of EasySend, wrote in an article published by Forbes.

From this widespread digitalization in the insurance sector came a shift to a culture focused on innovation.

“Digital transformation is no longer something to be proud of; rather, it is a matter-of-fact force that drives the industry forward. The need to innovate as a matter of strategy becomes increasingly apparent to insurance leaders,” Mr. Daskal said.

“This digital culture empowers insurers to innovate when it comes to age-old insurance problems such as risk assessments, claims processing, and policy sales,” he added.

This ongoing digital transformation across the insurance industry would indeed carry on for some years, according to an article by Artificial, a London-based company providing an integrated insurance platform. Citing data from management consulting firm McKinsey, Artificial added that insurtech funding has consistently grown year on year since 2017.

Along with digitalization, a trend among consumers in the insurance sector is personalization. 

“Customers are well aware that digital communications mean that their insurer collects their personal data — anything from behavioral data to their location or any information they have submitted. In return, customers expect a business to use this information in order to improve and personalize their experience,” Mr. Daskal explained.

In a report titled “Guide insurance customers to safety and well-being,” Accenture showed that consumers are more willing to share personal data for more personalized pricing, offers, and discounts in return. But they expressed no increased willingness to disclose their data without those incentives as exchange.

“They are increasingly demanding to be charged based on behavior and habits — and they’re willing to allow insurers to collect and use their data in exchange for that value,” the professional services firm added.

Accenture’s study also presented that millennials and younger consumers, aged 18-34, value sustainability. 67% of them want digital experiences that promote sustainable travel and shopping practices.

Some insurers seemed to have already positioned on ethical and sustainable business practices, as 71% of the said demographic in the study shared that their insurers deliver so.

“Personalization is the name of the game,” said Mr. Daskal of EasySend. “Laser-focused personalization capabilities are the new competitive edge when it comes to acquiring and keeping customers in 2021 and beyond.”

Mercer, a management consulting company, also saw the increasing pressure on employers to speed up their environmental, social, and governance (ESG) initiatives in its “2021 Global Talent Trends — Insurance Industry Outlook.” Insurance companies are now 1.4 times more likely to make sure that every executive has shared obligations for ESG metrics and 1.2 times more likely to bind ESG goals with the company’s purpose.

In 2022 and beyond, Artificial also considered that ESG issues have wide-ranging implications for insurers. “A growing number of providers will consider ESG risk factors when undertaking risk assessments and underwriting,” it said in its article. “And industry standards across multiple ESG issues including human rights and climate change are evolving every year.” — Chelsey Keith P. Ignacio

An exciting new phase for WESM

Advocating innovations and advancements in the electricity market to support nation-building

The Independent Electricity Market Operator of the Philippines (IEMOP) is currently studying and establishing several market-driven strategies to advocate developments in the power sector. Market developments, such as the continuous lowering of threshold for the Retail Competition and Open Access (RCOA), Green Energy Auction (GEA), Green Energy Option Program (GEOP), Reserves Market, Forwards Market, among other initiatives are all on track to make the country’s sole electricity market more dynamic, competitive, and transparent. The ultimate objective of these initiatives is to ensure a reliable, stable, and economical supply of power to support nation-building.

Foremost, among these advocacies, is the implementation of the Reserve Market. Reserves or Ancillary Services are commodities which are intended to ensure the reliability and security of the grid in an event of a contingency, such as when a generator suddenly went on outage. Currently, reserves are being contracted by the System Operator, the National Grid Corporation of the Philippines (NGCP), and are scheduled on a day-ahead basis. These reserve capacities are then reflected in the WESM during real-time scheduling.

With the Reserve Market design approved by the DOE through its Department Circular DC2019-12-0018 and DC2021-03-0009, reserve capacities shall be traded in the WESM. Hence, upon the Reserve Market implementation, reserves shall be scheduled in the least-cost basis through a more competitive and transparent landscape. In WESM, transparency is ensured by publication of all data and information relevant to the trading of energy and reserves. In this environment, investors and existing generators shall be incentivized to build new or enhance their current facilities which are technically capable of providing ancillary service.

IEMOP is also currently preparing to launch an alternative trading system for forward contracts. Forwards contracting provides a solution to the capital-intensive nature of building a power plant by providing generators a way to manage their risks in supplying power to their consumer counterparties. These forward contracts guarantee that there will be steady return-of-investment to recover capital expenses over the generator’s lifespan, thus, ensuring its financial viability. Currently, the mode of securing these contracts is bilateral in nature, and the time and costs associated in closing such contracts is challenging, especially for new players in the industry.

Through a central platform, industry players and future investors can buy and/or sell forward contracts faster and in a more transparent manner. This in effect also speeds up the process of determining the financial viability of new generation capacity and hastens the time to construct the power plants. Other benefits of establishing a forward market include market-based price discovery, significant reduction of transaction costs, and more stable WESM prices.

IEMOP is also studying the feasibility of integrating a Capacity Market to the WESM. A Capacity Market enables customers to buy “capacity” in the Electricity Market to ensure adequacy of supply in the long run. In comparison to other common commodities in an electricity market, which are (1) energy and (2) ancillary services, “capacity” is a commodity wherein the seller offers “commitment” to either (a) supply power or (b) reduce consumption, when the buyer requires it. As seen in other jurisdictions, the benefits of having a Capacity Market are (1) long-term adequacy of supply, (2) reliability of supply, and (3) more accurate pricing signals.

The implementation of these advocacies will ensure the Philippine’s security and reliability of supply in the most economical way possible. Encouraging new investments requires a long-term and thorough evaluation and analysis of all sectors of the society, not only within the energy industry. As such, IEMOP continues its commitment in supporting the nation’s advancement by implementing the policies of the Department of Energy, proposing developments that will benefit the stakeholders and the public, and studying innovative ways to ensure stable and economical power throughout the future. — Andrea May T. Caguete

 


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