Climate Risks Rising: Businesses Need to Prepare Mitigation Measures
JAKARTA – The threat of a Super El Niño, which is expected to affect Indonesia until early 2027, is requiring businesses across sectors to improve their preparedness for climate risks. The prospect of a prolonged dry season, drought and fires threatens not only agriculture and plantations, but also industry, property and logistics, all of which depend on water availability and environmental conditions.
Anticipating climate risks is important to reduce potential damage to assets, operational disruption and financial losses caused by extreme weather. Businesses need to identify vulnerabilities in their operations and prepare preventive measures suited to the characteristics of their respective sectors.
Asuransi Jasindo corporate secretary Brellian Gema Widayana said climate risks needed to be taken into account in business management and asset protection. The effects of extreme weather could extend across economic activities, he said, so it was not enough to address them only after losses had occurred.
“Super El Niño is a reminder that climate risks must be taken seriously, as their effects can spread across sectors and affect assets and operational activities. Customers therefore need to understand the risks they face and prepare preventive measures. Insurers, for their part, must ensure adequate risk management so they can meet their obligations to customers,” Brellian said in a written statement on Saturday (24 October 2026).
Brellian said preparations could begin by mapping risks according to location, asset characteristics and potential operational disruption. Weather forecasts from the Meteorology, Climatology and Geophysics Agency (BMKG) can be used to identify areas at risk of drought or fires.
In industry, readiness for extreme weather can include checking fire-protection systems and establishing procedures for dealing with operational disruption. Businesses that rely on water supplies should also plan their resource management to prepare for the possibility of prolonged drought.
In agriculture and plantations, changing climate conditions can affect production. Mitigation measures are therefore needed to reduce potential losses from drought and other environmental disruption.
Alongside preventive measures, financial protection is another tool businesses can use to manage risk. Insurance can help reduce the financial impact of losses covered by a policy, although it cannot prevent disasters from occurring.
Rising extreme-weather risks also pose a challenge for the insurance industry in managing potential claims. Data from the Financial Services Authority (OJK) show that claims in the general insurance and reinsurance industries reached Rp43.34 trillion through July 2026, an increase of 17.30 per cent compared with the same period a year earlier.
However, the increase in claims covers various types of risk and does not specifically reflect the impact of Super El Niño. The scale of potential claims arising from extreme weather will depend on the disaster, the extent of losses and the coverage provided by policies.
Insurers can prepare by mapping concentrations of insured assets in disaster-prone areas, reviewing their portfolios, and reassessing risk selection and premium-setting, or underwriting, processes. Adequate reserves and reinsurance support are also needed to ensure insurers can meet their obligations to customers.
Asuransi Jasindo said it managed risk by helping customers identify potential losses and determine their protection needs. It also provides claims services covering reporting, verification and settlement in accordance with policy terms.
In agriculture, Asuransi Jasindo has participated in the Rice Farming Insurance Programme (AUTP) with the Ministry of Agriculture since 2015. The programme provides financial protection against crop failure risks covered by the policy, including those caused by drought, floods, pests and plant diseases.
“For Asuransi Jasindo, maintaining customer trust means not only providing insurance protection, but also ensuring measured risk management and dependable service. We are working to ensure the company is ready to meet its obligations to customers, so that protection can be provided in accordance with policy terms when a risk occurs,” Brellian said.
The potential effects of Super El Niño underline the importance of preparedness across sectors as climate conditions change. Identifying risks, preventing damage to assets, ensuring operational readiness and securing financial protection are among the steps that can reduce potential economic losses from extreme weather.