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.
Analysis by catastrophe risk modeller RMS undertaken for the UK’s Department for International Development (DFID), shows that the establishment of insurance schemes to protect against natural disasters in low and low-middle income countries can provide average annual recoveries equivalent to 11% of asset losses.
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The Nature Conservancy (TNC), a leading global nature conservation organisation, is working on a pilot project that will design and test an insurance mechanism for coastal resilience which will leverage private capital structured in a fund format and with underlying parametric insurance triggers.
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UK Prime Minister Theresa May has announced a new London Centre for Global Disaster Protection, that will be established to harness expertise in the insurance and reinsurance market with the goal of helping to increase the use of rapid paying risk transfer protection and insurance against perils such as drought in Africa.
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The G20 group of nations, also known as the Group of Twenty and an international forum for government leaders and central bankers from 20 major economies, have been urged to seriously look at the role of climate insurance and risk transfer in helping to increase resilience to climatic events at their meetings in Hamburg this […]
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Global Parametrics, the parametric and index-based risk transfer start-up that is backed by the German Government, through its development finance bank KfW, the Climate Insurance Fund and the UK Government’s Department for International Development (DFID), has appointed a new Chairperson, Nina Shapiro.
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Improving economic growth in developed and emerging markets is expected to stimulate growth in the global insurance industry by 2018, which, suggests a need for greater reinsurance support and an opportunity for insurance-linked securities (ILS) to continue expanding into new peril regions.
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The World Bank hopes to sign on new member countries for its parametric insurance facility, the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI), as the latest phase of the initiative has already encouraged two new enquiries.
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Global Parametrics, the parametric and index-based risk transfer start-up has secured the rest of its initial financing round, with a £7.9 million investment from the UK Government’s Department for International Development (DFID).
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A new, regional disaster risk financing project that supports and builds on the experience of the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) has been launched in Fiji, significantly expanding regional collaboration and financial resilience.
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Global insurance giant AXA has launched a new unit focused on expanding its development and sales of parametric insurance and risk transfer products, and has named Tanguy Touffut as the units CEO.
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