risk transfer

There are questions being asked in Jamaica about the risk model that underpins the regional catastrophe insurance policies issued by the CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility), after torrential rainfall and resulting flooding in May failed to trigger the countries parametric coverage.

A whopping 42% of the limit placed for Florida’s Citizens Property Insurance Corporation’s reinsurance renewal was sourced from collateralized markets and insurance-linked securities (ILS) fund managers, as third-party capital continued to grow its share of the shrinking program.

Florida has been facing an insurance claims abuse epidemic, more widely known as the assignment of benefits (AOB) issue which has driven up claims totals and means reinsurance and ILS players could face outsized impacts from smaller storms in the state.

The board of governors of Florida’s Citizens Property Insurance Corporation has approved the purchase of $1.33 billion of reinsurance coverage in its upcoming 2017 renewal, with a combination of traditional reinsurance and capital markets coverage provided by the Everglades Re II Ltd. (Series 2017-1) catastrophe bond deal.

In the 12th edition of the World Economic Forum’s Global Risks Report, a new report on the top perceived risks that the world is facing, extreme weather, natural disasters, environmental and climate risks are all cited as key concerns, highlighting the need for risk transfer solutions.

The Board of Florida Citizens Property Insurance has approved moving forward on the development of the company’s 2017 risk transfer program for its Coastal Account, and will utilise both the traditional reinsurance and capital markets to secure a diversified and efficient source of risk transfer.

Nicaragua has benefited from a $1.1 million parametric insurance policy payout from the CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) after hurricane Otto triggered a payout to its tropical cyclone insurance coverage.

Insurance solutions enhance the financial response capacity of countries in the face of natural disasters, and more and more regions are showing a willingness to improve risk management and utilise ex ante solutions, according to Joaquim Levy of the World Bank.

Catastrophe risk insurance, risk pools and catastrophe bonds can all participate in closing the international protection gap, ultimately helping to better prepare and finance the world against climate and weather-related disasters.

The Caribbean and Central American focused parametric catastrophe insurance facility CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) is set to further expand its remit as it is developing new parametric insurance products for the fisheries sector in the region.