climate catastrophe bond

Global reinsurance company Hannover Re sees an opportunity to further develop the integration of resiliency features within catastrophe bonds, having received positive feedback from the market and clients since the transaction for the North Carolina Insurance Underwriting Association (NCIUA), Executive Board Member Silke Sehm has told Artemis.

The North Carolina Insurance Underwriting Association (NCIUA) has become the first catastrophe bond sponsor to benefit from an issuance that has disaster-resilience features integrated in it, with its recent $600 million Cape Lookout Re Ltd. (Series 2025-1) the very first cat bond to include an additional resilience feature.

COP 29, the United Nations Climate Change Conference held in Baku, Azerbaijan, has drawn to a close with agreement on certain areas and progress being made on the much-discussed Loss and Damage, as well as the Global Shield, two programs of some relevance to insurance, reinsurance and insurance-linked securities (ILS) markets.

Ceres, a non-profit that leads a national coalition of investors, environmental organisations and other public interest groups working to address global sustainability challenges, has highlighted parametric risk transfer, catastrophe bonds and ILS as innovative tools to address increasing climate risks and build a more resilient and sustainable insurance sector.

Analysts at Citigroup have highlighted a growing financing gap in climate adaptation efforts, saying that as this gap grows and steps to mitigate climate change remain at a pace considered too slow, there will be a need for increasing amounts of capital and catastrophe bonds are a useful structure that can be used in support.

“Insurance is the financial bedrock needed to de-risk investments and attract the additional capital necessary to mobilise the climate transition,” Rowan Douglas of Howden said today. To meet this goal, with exposure growing fast, there will be a significant need for more insurance capacity, with a role for the insurance-linked securities (ILS) market in delivering […]

The design of the recently announced Climate Resilient Development Bond (CRD Bond), an insurance-linked security (ILS) hybrid that integrates catastrophe bond protection and investment in climate resilience, was driven in part by the trend towards risks becoming uninsurable, according to Julian Enoizi, Global Head of Public Sector at Guy Carpenter.

A new financial structure that can provide community-based climate insurance or risk transfer protection from the capital markets, while incorporating resilience, advanced funding for loss-prevention and mitigation, through an insurance-linked security (ILS) designed structure has been proposed.

The role of the capital markets in the world’s transition to a low carbon economy as we look to tackle the threats of the changing climate, is “absolutely fundamental,” according to Rowan Douglas, Head of the Climate and Resilience Hub at Willis Towers Watson (WTW), and Chairman of Willis Research Network.

One of the clearest examples of a regulators’ intention to force action on climate-related financial risks and ensure entities have the capital resources to absorb their potential future losses from them, came from Bank of England Governor Andrew Bailey yesterday.