PERILS AG increases coverage across Europe, look to keep expanding

PERILS AG, the independent Zurich-based company providing industry-wide European catastrophe insurance data, has published its second newsletter updating the market on its activities and progress over the last six months. They now have greater than 50% total market coverage in the countries they cover.

PERILS covers loss data within Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Switzerland and the United Kingdom. Within these areas they say they calculate data on 476 CRESTA zones.

An interesting figure from the newsletter is PERILS estimate for the total value of property exposed to potential windstorm loss in the nine markets it covers. That total estimate is a huge €38.9 trillion, a massive potential for loss exists in Europe which is one of the reasons we see increased interest in both insurance-linked securities and industry-loss warranties for European coverage.

In the first nine months of 2010 PERILS based capacity amounted to $525m, $120m of that figure was due to catastrophe bonds issued. That figure now rises by €275m for the use of PERILS in the recent Calypso Capital European windstorm catastrophe bond (giving a total of roughly $510m just for cat bonds or $910m including ILW’s). By year end we’d expect PERILS to have been used for in excess of $1b of transactions, potentially as much as $1.2b if all mooted cat bonds get to market by year end.

It’s been a good first year for PERILS, they’ve been positively received by the market, and as you can see from the volumes, are getting utilised well. They wrap up their newsletter by saying that they intend to increase their level of coverage in all nine countries. They are also considering expanding into new countries and evaluating covering other perils. Any expansion of PERILS is great news for the ILS and ILW markets.

Read their newsletter here.