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.
Natural disasters, such as weather and geophysical catastrophe events, have been the direct cause of sovereign rating defaults in the past, but risk transfer, insurance and reinsurance can all help to support sovereign credit worthiness, with catastrophe bonds a tool available to help countries manage disaster risk.
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The UK’s recent announcement on regulations for the development of an insurance-linked securities (ILS) market in the UK, should promote the creation of new re/insurance solutions, and could also be a catalyst for growth for both the London market and the broader ILS space, according to Ben Reid, Ernst & Young LLP (EY).
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One factor is set to be absolutely key in the United Kingdom’s ambitions to become a hub for insurance-linked securities (ILS) transaction, the speed with which an application to launch a structure can be approved.
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Protectionist practices have a detrimental effect on the ability of the global insurance and reinsurance industry to close the protection gap between economic losses and those covered by insurance, according to reinsurer Swiss Re’s Chief Economist Kurt Karl.
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The Munich Climate Insurance Initiative (MCII) recently expressed its support of the G7 InsuResilience target of providing 400 million of the world’s most vulnerable with access to insurance protection, underlining measure to be taken to achieve this goal. Bringing to mind the abundance of efficient and willing ILS capital that should play a greater role […]
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The implementation of insurance-linked securities (ILS) regulation in the United Kingdom could result in increased opportunity for the capital markets to directly access insurance and reinsurance risk, resulting in increased pressure on pricing and rates, according to analysts.
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The UK Government has now published its draft regulations for the facilitation of insurance-linked securities (ILS) business, with the goal of establishing London as an ILS domicile. The publication sets out proposed corporate, tax and regulatory framework for ILS, and has been well received by the London market.
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More information is set to be revealed about the ambitions of the UK to attract some form of insurance-linked securities (ILS) business to London this week, with the government set to include the publication of updated draft regulations in its Autumn Statement on Wednesday.
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The African Risk Capacity (ARC), Africa’s sovereign parametric catastrophe insurance pool, is to make a US$8 million payout to Malawi after its 2015/16 agricultural season parametric drought insurance policy was triggered by ARC’s model.
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The Vietnam Ministry of Finance and the World Bank in Vietnam, at a workshop on disaster risk finance and insurance, discussed the need for a financial protection strategy to better protect the country and its residents against the financial and social impacts of natural disasters.
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