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.

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AXA’s parametric unit rebrands to AXA Climate, adds new hires

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 →

Asian governments encouraged to use more risk transfer by ADB

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 →

Physical & financial effects of climate change are accelerating: WMO

The physical and financial impacts of climate change are accelerating, according to the World Meteorological Organization, who says that record greenhouse gas concentrations are pushing global temperatures towards increasingly dangerous levels.The impacts and effects of climate change on the frequency, intensity and overall occurrence of severe weather related catastrophes and read the full article →

Yesterday’s climate tail risk closer to today’s central scenario: Mark Carney

Insurance and reinsurance companies are on the "front line of managing the physical risks from climate change" and are now aware that "yesterday’s tail risk is closer to today’s central scenario," according to Mark Carney, Governor Bank of England.Of course insurance-linked securities (ILS) funds and their investors are also on read the full article →

Global Parametrics adds HSBC Global Asset Management (Americas) CEO to Board

Global Parametrics, the parametric and index-based disaster risk transfer company that launched with the backing of the UK and German governments, has added a new senior non-executive director to its board.Deborah A. Hazell currently serves as the Chief Executive Officer (CEO) of HSBC Global Asset Management (Americas), a role in read the full article →

United Nations initiatives look to parametric & index insurance for Pacific islands

A group of United Nations backed initiatives are looking to expand the use of parametric or index insurance and reinsurance in the Pacific region, with a study expected to identify new use-cases and possibilities to drive uptake.The Pacific islands are not strangers to parametric insurance, having a World Bank supported read the full article →

Global Parametrics to use supercomputer to hone climate & seismic models

Global Parametrics, the parametric and index-based risk transfer company that launched with the backing of the UK and German governments, will utilise one of the world's fastest computers to enhance its climate and seismic risk models and help it develop products.Global Parametrics has signed a memorandum of understanding (MOU) with read the full article →

ILS & re/insurer capital can close Asia Pacific protection gap: Guy Carpenter

The depth of the capital markets, the structural innovation of insurance-linked securities (ILS), alongside traditional capacity from insurance and reinsurance markets, should all be combined to help efforts to close the protection gap in Asia Pacific, according to Michael Schwarz of Guy Carpenter.Schwarz is Head of Public Sector, Asia Pacific read the full article →

Swiss Re sees $500bn global property & mortality protection gap opportunity

Global reinsurance firm Swiss Re has newly identified an enormous $500 billion global property (catastrophe and non-catastrophe) and mortality risks protection gap, saying that this is an opportunity for insurance and reinsurance markets to boost global resilience.Of course we'd also say that such a gap is an opportunity for the read the full article →

World Bank to expand parametric risk transfer for Pacific Islands

In supporting the Pacific Island nations on their road to resilience, the World Bank aims to expand the availability of parametric disaster insurance protection, partly through the use of private capital, while expanding the range of parametric insurance products available in the region as well.Recently, the World Bank, alongside German read the full article →