resilience

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.

It is time for the world to act on climate change as it will play an increasing role in disaster losses, Torsten Jeworrek of reinsurance company Munich Re warned today.

The physical climate risk protection gap, so the gulf between climate related losses covered by insurance, reinsurance or risk transfer and those going uncovered, is widening, but instruments such as insurance-linked securities (ILS), catastrophe bonds and other blended financing solutions can help to narrow this gap.

The Climate Measurement Standards Initiative (CMSI), an Australian led collaboration on the physical risks of climate change and their disclosure, has developed a set of open-source, voluntary guidelines to help banks, financial institutions and insurers better assess the risk and quantify the costs of climate-related damage.

Global action to combat climate change is essential to avoid the exposure becoming systemic in nature, which might cause it to become less insurable, according to Munich Re’s CEO of Reinsurance, Torsten Jeworrek.

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.

Entropics Asset Management AB, the Swedish manager of a catastrophe bond fund, is planning to raise a new institutional investment fund strategy focused on resilience and sustainable opportunities in insurance and reinsurance.

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.

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.