Resilience bonds news

The gap between natural catastrophe exposure and how much of it is covered by insurance has widened in dollar terms, with the natural catastrophe protection gap now seen to be $368 billion by global reinsurance firm Swiss Re, who also says that catastrophe bonds and resilience bonds are valuable tools to deploy.

The design of the recently announced Climate Resilient Development Bond (CRD Bond), an insurance-linked security (ILS) hybrid that integrates catastrophe bond protection and investment in climate resilience, was driven in part by the trend towards risks becoming uninsurable, according to Julian Enoizi, Global Head of Public Sector at Guy Carpenter.

A new financial structure that can provide community-based climate insurance or risk transfer protection from the capital markets, while incorporating resilience, advanced funding for loss-prevention and mitigation, through an insurance-linked security (ILS) designed structure has been proposed.

Catastrophe bonds are typically a risk transfer structure protecting an insured or reinsured against losses that affect its portfolio, which normally means a focus on loss and damage to physical assets. But increasingly interruption and people’s humanitarian needs are coming into the coverage equation, with broker Aon pioneering some of these moves according to its […]

Given the challenges faced in an increasingly volatile and turbulent world, insurance and risk finance are key tools that can help to shift the balance of risk, while insurance-linked securities (ILS) can “securitize resilience”, according to United Nations Development Programme (UNDP) representatives.

The Insurance Task Force (ITF), an initiative working as part of His Royal Highness The Prince of Wales’ Sustainable Markets Initiative (SMI), is exploring the potential for catastrophe bonds to play a role in a resilience focused Kenyan agricultural insurance solutions to cover drought risks.

With the G7 meeting in Cornwall, UK beginning tomorrow and the COP26 only five months away, CEO’s of major global corporations are calling on world leaders to scale up climate risk transfer as part of the financial response to climate change.

United Nations (UN) Secretary General António Guterres has again said that the world needs more catastrophe-triggered financing and better instruments to support the delivery of climate financing, to enhance disaster resilience, fund adaptation measures and finance climate risk.

Driving home the importance of climate risk mitigation, resilience building and also the role of insurance or reinsurance in providing climate risk transfer, global reinsurer Swiss Re warns that the world’s economy risks a significant hit as the climate changes.

The deepening of the world’s understanding, measurement and valuation of climate risks is going to drive a massive demand for contingent risk capital, which parametric triggers and insurance-linked securities (ILS) will be well-suited to serve, Rowan Douglas of Willis Towers Watson explained during our ILS NYC event this week.