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.
Global Parametrics, the parametric and index-based disaster risk transfer company, has partnered with global reinsurance firm Hannover Re to renew an innovative Yucatan, Mexico coral reef parametric insurance cover. The transaction renews the coverage for the Mexican Reef Protection Program, an initiative that leverages parametric risk transfer and reinsurance capacity, in read the full article →
Following the increased severity and frequency of wildfires, droughts and floods in recent times, the undeniable impact of climate change on water-related catastrophes is starting to get priced in and risk premiums are adjusting, according to Niklaus Hilti, Head of Credit Suisse’s Insurance-Linked Strategies division. In a recent interview, experienced insurance-linked read the full article →
Global Parametrics, the parametric and index-based disaster risk transfer company, has structured a windstorm derivative transaction for a business on remote South Atlantic island Tristan da Cunha, with the deal backed by capacity from the UK Government’s Department for International Development, through the Natural Disaster Fund (NDF). The windstorm derivative features read the full article →
Global Parametrics, the parametric and index-based disaster risk transfer company, has added two hires as it continues to build out its team to meet growing demands for index-based risk transfer and insurance products. Global Parametrics aims to consolidate on its position as a provider of climate and natural disaster risk protection read the full article →
The Pacific Island nation of Tonga is to receive a $4.5 million payout from its parametric disaster insurance policy with the Pacific Catastrophe Risk Insurance Company (PCRIC), the largest payout to date from the regional catastrophe insurance facility. The Pacific Catastrophe Risk Insurance Company (PCRIC) is a regional catastrophe insurance platform read the full article →
Global Parametrics, the parametric and index-based disaster risk transfer company, is putting capacity from the Natural Disaster Fund (NDF) that it manages behind a new weather insurance pilot for coffee farmers in Costa Rica that is powered by Arbol's technology and smart contract driven marketplace for weather risk transfer. To launch read the full article →
AXA Climate, the parametric specialist risk transfer unit of global insurance and reinsurance company AXA, has partnered with Dutch satellite technology firm VanderSat on a range of products to enable drought and soil moisture related exposures to be hedged. AXA Climate will utilise data sourced from VanderSat's microwave data from satellites read the full article →
A regional catastrophe bond market for the Asia-Pacific region has become a focus of the business focused arm of the Asia-Pacific Economic Cooperation (APEC). APEC has long been a supporter of the use of insurance-linked securities (ILS), such as catastrophe bonds for disaster risk financing using the capital markets as a read the full article →
The reality of climate change needs to be addressed and addressed fast by countries, governments and public sector entities, and the risk transfer, reinsurance and insurance-linked securities (ILS) sectors are well-placed to assist, according to Guy Carpenter. The catastrophe bond is highlighted as a key risk transfer and resilience financing tool read the full article →
Innovative insurance and reinsurance mechanisms such as catastrophe bonds, risk pooling facilities and parametric triggers are all key ways that risk mitigation can be improved in the world's most vulnerable areas, Aon said today. The insurance and reinsurance broker highlighted the continuing issue of the protection gap and the need for read the full article →