Climate change & climate risk related news

The U.S. Federal Emergency Management Agency (FEMA) has hailed the successful completion of the issuance of its new $450 million  FloodSmart Re Ltd. (Series 2022-1)  catastrophe bond, which has expanded the capital markets participation in the National Flood Insurance Program’s (NFIP) reinsurance tower.

Heavy catastrophe losses through 2021 have driven SCOR’s P&C reinsurance combined ratio above 100 for the full-year, as the firm’s nat cat ratio rose to 12.8% and the company said it is carefully monitoring the effects of climate change.

The insurance-linked securities (ILS) market has long designed its risk transfer products and solutions using the insights gleaned from the outputs of catastrophe risk models, but in the future a “digital twin” could be a far more intuitive solution that can drive significant ILS innovation, we believe.

Arbol, the technology-led underwriter of parametric risk transfer, climate and weather insurance business, has reported transacting an impressive $70 million in gross premium through its first full-year of operations in 2021.

The influence of climate change on returns in the insurance-linked securities (ILS) market is uneven and ILS investment managers have access to the tools necessary to adapt to advancing climate risks, making it important that investors take a balanced-view, according to alternative asset advisors SIGLO Capital Advisors AG.

Broking group Marsh has announced the hiring of Matthew Latham as Alternative Risk Transfer Leader, UK & Ireland, a position that will see him working closely with structured reinsurance, climate risk transfer and parametric insurance teams.

Parameter Climate, the parametric risk transfer and climate focused underwriter, has announced another key hire, bringing Ralph Renner over from his most recent role at Sompo International, to join the company as a co-founding Partner and its Head of Origination.

With capital still abundant, the reinsurance hardening seen at recent renewals is assumed to be driven by risk aversion this time around, but the very factors driving risk and pricing higher are also seen as tailwinds for the re/insurance sector longer-term, by investment banking giant Goldman Sachs.

The value-proposition of risk transfer through reinsurance remains strong, according to broking giant Aon, who said recently that while reinsurance capital levels remain adequate across most of the market, there are some opportunities for new capital to enter and existing players to expand.

In the latest edition of the Allianz Risk Barometer, there is a clear sign of the increasing concern among business leaders over rising impacts from natural catastrophe events and climate change, with both of these threats climbing the rankings for 2022.