2011 was the year ‘nat cat’ was let out of the bag
Earthquakes in New Zealand and Japan (the latter followed swiftly by a devastating tsunami) and damaging floods in Australia and Thailand changed insurers’ views on risk and reinsurance for ever.
With nat cat now front of mind for all good risk professionals, many are choosing to cede more risk to reinsurers. However, as Ernst & Young’s 2013 Asia-Pacific insurance outlook puts it: “While reinsurance as a form of capital relief can yield positive results for managing capital requirements, it needs to be balanced against the rising cost of reinsurance premiums.”
Indeed, simply passing on the increased cost of reinsurance is often not an option – especially in our region.
I’ve had quite a few discussions about this and related issues with nat cat experts lately, and will be reporting on their opinions, strategies and warnings in coming weeks.
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Yours in risk,