ILS potential within Belt and Road Initiative

With its cost estimated to run into trillions of dollars and main developments spread over 70 countries in three continents, it is natural for China’s belt and road initiative to be in the spotlight of all participating countries and business sectors. As there are massive infrastructure investments in both China and many more nations including its neighboring countries, the (re)insurance industry, together with insurance-linked securities (ILS) community will have its own multi-task opportunities and challenges with regards to the BRI projects. Parametric reinsurance and particularly ILS risk transfer instruments are exact solutions for such issues at the sovereign or provincial government levels.

China: President Xi warns of risks across wide spectrum of activities


Chinese President Xi Jinping has told senior officials to strengthen their ability to prevent and defuse major risks to ensure sustained and healthy economic development and social stability, according to the Xinhua news agency.

In his speech, Mr Xi who is also general secretary of the Communist Party of China (CPC), highlighted major risks in areas including politics, ideology, economy, science and technology, society, the external environment and Party building.

He was speaking at the opening ceremony of a study session last week at the Party School in Beijing that was attended by senior provincial and ministerial officials.

Should India transfer its catastrophe risks to capital markets?


The coastal Indian state of Kerala suffered an estimated economic loss of $4.5bn due to the floods that ravaged the state in August this year. Kerala has demanded that the federal Indian government provide additional resources to rebuild the state’s damaged infrastructure.

Kerala’s demand for additional resources has initiated a debate about how to make additional resources available for such relief and reconstruction activities in the aftermath of natural catastrophes, especially when the level of insurance penetration is extremely low. The insurance penetration in Kerala is estimated to be even below the national average for India.

Asia can leapfrog other regions in ILS


ILS has potential for deployment and growth in Asia, where insurance penetration is low and natural and manmade catastrophes inflict huge economic costs on governments, causing considerable strain on state budgets.

JLT Re’s ex-CEO, Michael Reynolds believes that the Asian region with its underlying growth and development is going to be important for ILS in the future. “Asia is in a position to leapfrog some of the more developed regions and learn from what’s going on in the ILS space in other areas and take that development to the next level, which could mean longer tail lines of business playing in that particular space,” he said.

Asia: Insurance gap in the region grows to US$134bn – Lloyd’s


The underinsurance gap in Asian countries has widened by 9.4% to $134bn today from $122.5bn in 2012, according to new research from Lloyd’s, the world’s specialist insurance and reinsurance market, and the independent consultancy Centre for Economics and Business Research (CEBR).

The Lloyd’s Underinsurance Report 2018 says that globally, an estimated $163bn of assets are underinsured in the world today. In 2012, the first edition of the global report revealed $168bn in underinsured assets globally.

Asia: Region’s ILS mart to grow as protection gap widens


Asia is poised to be the next frontier for the growth of insurance linked securities (ILS) as ILS funds continue to diversify their investment portfolios, according to Ms Jacqueline Loh, deputy managing director of MAS at the Artemis ILS Asia 2018 Conference on 12 July.

She said that although at first glance, the economics of ILS in Asia appear to be challenging with the continent still a developing market with low insurance penetration, it is likely that ILS will achieve a breakthrough in the coming years as the protection gap in Asia widens.

Climate risk insurance:PPP the strategy for the future, says German official


Climate risk insurance plays an important role in protecting populations, and public-private partnership is the way forward in this strategy, said German Federal Ministry for Economic Cooperation and Development state secretary Martin Jaeger, with a focus on the climate risk issue in his special address yesterday morning at this year’s Global Insurance Forum in Berlin.

Mr Jaeger provided the host government’s perspective of the climate risk issue. Together with the G7 and partner countries, Germany aims to help insure 400 million more poor people against the risks of climate change by 2020.

Positive signs of bridging CAT protection gap in Asia


There are encouraging signs that the natural catastrophe protection gap in Asia can be bridged, owing to factors such as relaxation of market access restriction in the region as well as the power of technology.

Speaking at the 16th Conference on Catastrophe Insurance in Asia in Singapore yesterday, Swiss Re’s Head of P&C Underwriting Sharon Ooi listed four promising signs to close the protection gap in the region.

India: Weather-based insurance to be available to tea growers nationwide


Small tea growers, contributing near half of the national yield, are going to have insurance coverage against loss incurred due to adverse weather conditions, protection which they have been demanding for more than a decade.

Following introduction in a few pilot districts, the insurance scheme will be implemented countrywide in a phased manner, reported The Economic Times.

The Indian Tea Board (ITB) recently held a meeting with insurance companies, including Agriculture Insurance Company of India, and other stakeholders like small tea growers, to plan the modalities of the scheme.

Insurance industry not fulfilling its full potential in cyber risk management-OECD


While the insurance market is already contributing to cyber risk management, it has the potential to do much more, says a recent report from the Organisation for Economic Co-operation and Development (OECD).

While not a substitute for investing in cyber security and risk management—having good cyber security and avoiding a disruption is preferred— insurance coverage for cyber risk can make an important contribution to the management of cyber risk. The market currently does this by sharing expertise, differentiating its pricing based on levels of risk and providing valuable support to both large and small companies in responding to crises.