natural catastrophe

Following the annual AIFA conference held in Florida this week, a new report from analysts at Jefferies reveals that industry executives believe it would take a single $100 billion insured loss event to derail the insurance-linked securities (ILS), catastrophe bond, and reinsurance markets.

The Thai General Insurance Association (TGIA) is backing an initiative to establish a permanent Natural Catastrophe Fund for the country in the first half of 2026, and is currently exploring the use of catastrophe bonds as a form of reinsurance capital to help support the fund, according to a report by the Bangkok Post.

Global reinsurance firm SCOR has renewed its main contingent capital facility for the fifth time, continuing the balance-sheet coverage that protects the company against extreme natural catastrophe or mortality events, as well as against a significant decline in its share price.

In a recent commentary authored by Schroders Capital’s Mark Gibson, Senior Investment Director ILS, and Christoph Hummel, Head of Analytics, ILS, both make the case for enhancing the trusted vendor models that underpin the catastrophe bond market with in-house expertise.

Bridging the widening natural catastrophe insurance protection gap is part of building macro financial resilience, which calls for innovative solutions such as catastrophe bonds, parametric instruments and regional risk pools, according to Lesetja Kganyago, Governor of the South African Reserve Bank.

Despite global insured losses from natural catastrophes reaching $145 billion in 2024, the catastrophe bond market emerged largely unscathed, despite it being a heavy year for nat cat events, according to an analysis by Kepler Absolute Hedge, a research and data-led provider of insight into hedge fund strategies.

Re/insurance broking giant Aon has announced the launch of a new parametric insurance solution that is designed to address and mitigate losses from hurricane-related storm surge along the coast of the United States, developed in partnership with Floodbase, a specialist in parametric flood risk, and global commercial insurer, Swiss Re Corporate Solutions.

The Los Angeles, California wildfires are a tail event for the peril and will demonstrate the continued and growing relevance of reinsurance, according to RenaissanceRe CEO Kevin O’Donnell, who also explained today that “most of our US property catastrophe programs are loss impacted.”

Initial loss estimate announcements for the Los Angeles, California wildfires from Bermudian reinsurance firm RenaissanceRe and global re/insurer Chubb may raise some concerns, as RenRe based its estimate on a $50 billion industry loss event, while Chubb also seems to be working from a relatively high industry figure.

Catastrophe risk modelling specialist Karen Clark & Company (KCC) estimates that the insured loss (from privately insured and FAIR plan policies) to residential, commercial, and industrial properties, and autos from both the Palisades and Eaton wildfires in Los Angeles will sit close to $28 billion.