The insurance protection gap
The protection gap – underinsurance in emerging and developing economies and the gap between economic and insurance losses – the opportunity that is on every reinsurance CEO’s lips and which presents the largest opportunity to put excess risk transfer capital to use, requiring both traditional and capital markets support.
In a market that is faced with abundant and ongoing pressure, from excess capital, new entrants, the capital markets, reductions in buying, consolidation of reinsurer panels and difficult global financial market conditions, the reinsurance industry is focusing on the next big opportunity.
This opportunity provides both reinsurers and ILS fund managers with an opportunity to assist in building the world’s resilience to disaster risks, while providing rapidly paying post-event risk finance, at the same time as growing the world’s catastrophe risk markets.
It’s win-win for both sides, those in need of resilience and disaster risk financing and the re/insurance and ILS market which is keen to expand into new regions, perils and opportunities. Narrowing the protection gap is expected to be a key focus for years to come.
Climate risk data should be linked to the insurance, reinsurance and risk transfer process through the use of technology and risk models, placing it and financial products at the heart of climate adaptation and resilience efforts.A new background paper from academics and insurance sector specialists highlights the importance of continued read the full article →
The African Risk Capacity (ARC), an organisation providing parametric sovereign disaster risk insurance and resilience building support to African nations, has sold its first replica coverage policies for drought to the World Food Programme (WFP) and the Start Network.ARC launched the so-called "replica coverage initiative" back in 2015, hoping to read the full article →
New York state has seen new legislation on climate change adaptation making rapid progress through lawmaking channels and the Climate Leadership and Community Protection Act includes signs that risk transfer is on the agenda.New York has been hailed as taking the lead on climate change related issues with its "green read the full article →
The growing pressure on corporations to take greater responsibility for the climate related risks and exposures they carry could present an opportunity for insurance and reinsurance market participants to demonstrate innovation in product design, according to Aon's Greg Lowe.Greg Lowe, the Head of Resilience & Sustainability at insurance and reinsurance read the full article →
A collaboration between Oxfam in Sri Lanka, insurance and reinsurance broker Aon and insurtech blockchain solutions provider Etherisc has delivered a parametric weather insurance product that will make automated payouts to smallholder farmers.The trio, alongside local insurer Sanasa, have launched and begun enrolling farmers into a blockchain-based platform that will read the full article →
Public and private market efforts and collaboration to narrow or even close the insurance protection gap need to be accelerated and uptake of risk transfer needs to be extended, according to Chairman of AXA Denis Duverne.Speaking at an Insurance Development Forum (IDF) day held at the International Insurance Society (IIS) read the full article →
The Bank of England has committed to action in support of an orderly transition to a carbon neutral economy for the United Kingdom, seeking to "mainstream climate risk management" in the financial sector and encourage broad disclosure of climate-related risks.The Bank wants the UK's financial sector to "support the transition read the full article →
AXA Climate, the parametric specialist risk transfer unit of global insurance and reinsurance company AXA, has launched Hail Protection, which reportedly is the first-ever parametric coverage designed to help businesses recover after hail storms.AXA Climate, which was formerly called AXA Global Parametrics until a recent rebranding of the unit, developed read the full article →
Global insurance and reinsurance company AXA has rebranded its specialist parametric risk transfer unit to AXA Climate and has also strengthened its team with new hires.Previously called AXA Global Parametrics, the unit is focused on developing a client offering of parametric trigger insurance underwriting and risk transfer solutions, with a read the full article →
Disaster risks and costs are on the rise in Asia, a region where under-insurance is still the norm and spending by government's on contingent sources of disaster risk financing relatively scarce, leading the Asian Development Bank (ADB) to call for more to be done.Among the issues cited as requiring more read the full article →