Jamaica: World Bank cat bond still underway. Gets CCRIF rainfall payout for Zeta & Eta

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Jamaica continues to work with the World Bank on a first catastrophe bond for the country the Finance Ministry has said and reflecting the importance of disaster risk financing, in recent weeks it has received a roughly $3.5 million payout under its parametric CCRIF insurance coverage.

The payout comes after the torrential rainfall from tropical cyclones Zeta and Eta impacted the Caribbean island nation triggered the parametric excess rainfall protection that Jamaica has.

The CCRIF SPC (formerly known as the Caribbean Catastrophe Risk Insurance Facility) provides excess rainfall parametric insurance coverage, as well as parametric risk transfer for peak perils such as hurricanes and earthquakes.

Mexico’s cat bond coverage continues, despite shuttering of FONDEN

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Mexico’s still in-force $485 million IBRD / FONDEN 2020  catastrophe bond will continue to provide the country with important disaster insurance protection, as the beneficiary of the cover has been shifted away from the shuttered FONDEN disaster fund to the country’s Treasury.

We’re told that a notification has been sent to investors in and holders of the World Bank issued Mexican catastrophe bond, to explain that the coverage it provides will continue uninterrupted, despite Mexico’s Fund for Natural Disasters (El Fondo de Desastres Naturales), more commonly known as FONDEN, having been dismantled.

As we reported last October, FONDEN was set to be dismantled after Mexico’s lawmakers in the senate voted to reform that area of public funding.

ILS fund manager Gildenbrook launched with $850m of capital by Brookman

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The Gildenbrook Group has been founded by experienced ILS industry executive Daniel Brookman and has today launched Gildenbrook Capital Management Ltd., an independent alternative investment fund manager focused on the insurance-linked securities (ILS) asset class.

Brookman most recently led alternative reinsurance and ILS activities at re/insurer AXA XL, before which he worked at reinsurance firm Montpelier Re leading capital market initiatives, and before that at investment bank Barclays again with a focus on reinsurance and ILS.

The Gildenbrook Capital Management Ltd. has launched in the fourth-quarter of 2020 and already has some $850 million of institutional assets under its advisory as of January 2021.

World Bank supports Central Asia Multi-Peril Risk Assessment

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Central Asian countries will benefit from a better understanding of their natural disaster risks, which in time could lead to greater use of risk transfer, insurance and reinsurance capacity in the region, as the World Bank supports a multi-peril risk assessment project for the region.

One of the first steps in moving towards sovereign disaster risk transfer, such as use of insurance, reinsurance or catastrophe bond type arrangements, tends to be in the development of risk modelling tools to enhance the understanding of exposures in a country.

To that end, the World Bank, alongside its partners, has launched an initiative to provide a multi-peril risk assessment of natural disaster risks, including earthquakes, floods and selected landslides within the Central Asia region.

Catastrophe protection gap hit 64% in 2020, $171bn goes uninsured: Aon

FULL ORIGINAL PUBLICATION HERE. AON’S FULL CATASTROPHE REPORT HERE.

The global catastrophe protection gap reached 64% in 2020 as roughly $171 billion of natural catastrophe and severe weather losses were not covered by insurance and reinsurance, one of the largest brokers Aon has said.

Aon’s latest annual catastrophe report highlights climate influences on a significant number of impactful events in 2020 and the brokers’ CEO Greg Case calls for organisations to ensure they are protected against the global risk of concurrent events.

Aon’s report includes 416 natural catastrophe and severe weather events from 2020, which the broker estimates drove economic losses of US $268 billion, some 8% above the average annual losses for this century.

Indonesia cat bond possible, as World Bank lends for disaster insurance

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The World Bank has approved $500 million of funding for Indonesia to help the country enhance its financial response to natural disasters, climate risks, and health-related shocks, with the use of risk pooling, and insurance or reinsurance instruments at the heart of the plan.

Between 2014 and 2018, the central government of Indonesia has spent between US$90 million and US$500 million annually on disaster response and recovery, the World Bank explained, while Indonesia’s local governments spent an estimated additional $250 million over the same period.

With the cost of natural disasters and severe weather events expected to keep increasing further due to climate change and also urban growth, the World Bank notes that these costs will pressure Indonesia’s government public spending.

Tre Hapa për të Ndihmuar Shqipërinë për të Përballuar Ndikimet Financiare të Shkaktuara nga Fatkeqësitë dhe Krizat

PUBLIKIMI I PLOT ORIGJINAL KTU

Në vitin 2019, Shqipëria u përball me një seri tërmetesh, ndër të cilët edhe një me magnitudë të lartë; më pas, mes përpjekjeve për rindërtim në vitin 2020, u godit edhe nga pandemia COVID-19. E përballur me nevojat e shumta në rritje, mbështetja e qeverisë shqiptare shkoi për të varfërit dhe personat e prekur nga fatkeqësitë dhe krizat, përfshirë këtu edhe bizneset. Për ta realizuar këtë, ajo shfrytëzoi rezervat fiskale, rishpërndau buxhetet për përparësitë urgjente dhe u mbështet tek ndihma e jashtme. Shumë nga këto masa u ndërmorën në bazë të nevojës.

Në shtator 2020, Banka Botërore së bashku me Ministrinë e Financave dhe Ekonomisë,  kreu vlerësimin diagnostikues në lidhje me financimin e riskut të fatkeqësive në Shqipëri.[1] Kjo përpjekje kishte për qëllim identifikimin e mangësive të financimit të mekanizmave për gatishmërinë financiare të vendit në rast fatkeqësish dhe rekomandimin e mënyrave për përmirësimin e tyre.

Menaxhimi i riskut të fatkeqësive është ndër përparësitë kryesore të politikave në Republikën e Shqipërisë dhe, pak kohë para tërmetit, qeveria shqiptare kreu edhe një seri reformash në këtë drejtim, si për shembull: miratimi i Ligjit të ri për Mbrojtjen Civile, racionalizimi i kornizave institucionale, decentralizimi i funksioneve që aktivizohen pas fatkeqësive dhe vënia në dispozicion e strukturave të nevojshme për fondet e emergjencës në nivel vendor dhe në nivel ministrie të linjës.

Three Steps to Help Albania Withstand the Financial Impacts of Disasters and Crises

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In 2019, Albania experienced a series of earthquakes, including a major one; then, amid reconstruction efforts in 2020, it was hit by the COVID-19 pandemic. Confronting multiple increasing needs, the government of Albania supported the poor and those affected by disasters and crises, including businesses. To do so, it tapped into its fiscal reserves, reallocated budgets toward urgent priorities, and relied on external assistance. Many of these measures were ad hoc.

In September 2020, jointly with Albania’s Ministry of Finance and Economy, the World Bank completed a diagnostic of disaster risk finance in Albania[1]. This effort sought to identify financing gaps in—and recommend ways to improve—the country’s financial preparedness for disasters.

Disaster risk management is among Albania’s key policy priorities, and the Albanian government carried out a series of reforms shortly before the earthquake: for instance, it enacted a new Law on Civil Protection, streamlined institutional frameworks, decentralized post-disaster functions, and put in place structures for contingency funds at the local and line ministry level.

Brazil’s regulator targeting ILS for the right (domestic) reasons

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With Brazil’s government having recently formalised and published legislation related to special purpose reinsurance transformer vehicles and insurance-linked securities (ILS) issuance, the country’s insurance regulator Susep has said it hopes the regime will reduce reinsurance costs for carriers.

As a result of which, Brazil’s regulator the Superintendência de Seguros Privados (Susep) hopes that introducing direct capital market’s sources of third-party reinsurance and retrocession capital can ultimately help to lower insurance costs for the country’s consumers.

Brazil’s insurance and reinsurance market regulator Susep had been seeing feedback on a framework for legislation and a regulatory regime to allow for the issuance of insurance-linked securities (ILS) in Brazil.

Catastrophe bonds “gained in importance” in 2020, says Fitch

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Catastrophe bonds became more important for the reinsurance market in 2020, as the record year of issuance saw use of the cat bond as a reinsurance or retrocession risk transfer tool increase, Fitch Ratings has said.

While alternative capital levels remained relatively flat overall through 2020 it seems, the catastrophe bond market was one area that gained during the year.

Catastrophe bonds gained in importance at the expense of collateralised reinsurance programmes, Fitch Ratings said in a recent report, highlighting a bit of a shift in investor demand for ILS products that was one of the drivers.