World Bank supports Central Asia Multi-Peril Risk Assessment

FULL ORIGINAL PUBLICATION HERE

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.

Where the new ILS opportunities lie – and how to access them

ORIGINAL PUBLICATION HERE. INTELLIGENT INSURER WEBSITE PUBLICATION HERE.

In a webinar hosted by Intelligent Insurer’s Re/insurance Lounge, AkinovA CEO Henri Winand and Kirill Savrassov of Phoenix CRetro explored the possibilities for ILS to expand into new geographies and lines of business.

A significant motive for bringing insurance-linked securities (ILS) to new geographies is diversification of portfolios, according to Henri Winand, founder and chief executive officer of AkinovA.

Speaking in an Intelligent Insurer Re/insurance Lounge webinar titled “New domiciles, new risks, new structures: another evolution for ILS”, he noted that while an attraction of ILS is that it is seen as uncorrelated from the capital markets, it has a disadvantage in that portfolios are largely concentrated in North America, and to some extent in Asia.

China’s Belt and Road Initiative could kick-start ILS in Asia

ORIGINAL PUBLICATION HERE. INTELLIGENT INSURER OWN WEBSITE PUBLICATION HERE

The countries of China’s Belt and Road Initiative (BRI) are largely unsupported by insurance and would benefit from the introduction of insurance-linked securities (ILS) into the region, according to Kirill Savrassov, chief executive of Phoenix CRetro.

Speaking in an Intelligent Insurer Re/insurance Lounge webinar titled “New domiciles, new risks, new structures: another evolution for ILS”, which took place ahead of SIRC 2020 Re-Mind, Savrassov highlighted how a cat event in one of those countries could cause wider repercussions for the delivery of the BRI.

“Those countries are receiving billions and billions of investment into their transport and critical infrastructure but remain uninsured and uncovered for large natural disasters,” he said.

Governments and institutions bet big on CAT bonds

ORIGINAL PUBLICATION HERE. HARD PAPER VERSION HERE

There is something magical about the word bonds as it is closely linked with all facets of our life. But in the world of business, bonds are financial instruments that are used by governments and institutions to tide over funding difficulties in times of stress. And at no other time has it been more pronounced than at this juncture when businesses all over the world are reeling from the impact of the COVID-19 pandemic.

My interest in the topic was aroused when my old friend T.B.Nair, an independent analyst in the southern Indian city of Bengaluru, told me about how catastrophe bonds are gaining ground in the global marketplace. Nair told me that catastrophe bonds or CAT bonds are now becoming the instrument of choice for several countries to insure big transnational infrastructure projects from natural disasters. He even went on to suggest that CAT bonds would have been of great help for India to overcome the economic hardships arising from cyclones, floods etc.

Press release

Following today’s declaration of Bermuda Monetary Authority (BMA) on Cancellation of registration for Phoenix CRetro Reinsurance Company Limited the Company would like to comment as follows:

 

Despite an important role Bermuda plays in ILS environment, the country is still blacklisted as an offshore destination by regulators and central banks of Eastern European and Central Asian countries as well as Russian Federation, which makes it very hard if not impossible to operate out of this jurisdiction when developing Insurance-Linked Securities as an asset class for investors from the region.

Following recent developments at an ILS space and regulatory endeavors of Asian hubs like Singapore and Hong Kong the company shall be looking for alternative jurisdiction to continue developing its business model.

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Parametric sovereign cat bonds: the way to insure the Belt and Road

ORIGINAL PUBLICATION HERE. PDF VERSION HERE. CHINESE 中文 TRANSLATION HERE .

Countries in Central Asia and Eastern Europe that have been recipients of Chinese investment via projects associated with its Belt and Road Initiative (BRI) should use parametric sovereign cat bonds to insure themselves against the risk of natural disasters.

That is the view of Kirill Savrassov, an insurance-linked securities (ILS) and sovereign risk transfer specialist.

“China’s Belt and Road Initiative has created an even greater need for comprehensive protection solutions in Central Asia and Eastern Europe,” said Savrassov.

“China has spent tens of billions of dollars in infrastructure across the region but practically none of it is properly insured against physical damage, despite the region being at high risk from earthquakes and other natural disasters.

“In countries such as Uzbekistan, Kazakhstan or Tajikistan it is not a question of if an earthquake will hit, but when and how devastating it will be.”

Cat bond sponsors continue to look to Bermuda for listings: Estera

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Foreign sponsors of insurance-linked securities (ILS) transactions such as catastrophe bonds continue to look to Bermuda as the location for listing the resulting notes, with Estera having listed all of the transactions originating in Europe or the UK this year.

The team at Estera, a global provider of corporate, fund, trust and legal services, including to reinsurance and insurance-linked securities (ILS) markets, has now acted on behalf of an impressive 55% of all ILS transactions listed on the Bermuda Stock Exchange (BSX).

The latest deal Estera has acted on and that has listed on the BSX is Covea Group’s recently completed €120 million Hexagon II Reinsurance DAC (Series 2019-1) catastrophe bond transaction.

Belt & Road countries and Insurance Linked Securities

ORIGINAL PUBLICATION HERE

Phoenix CRetro Reinsurance Company chief executive Kirill K Savrassov says as huge investments are being poured into the Belt and Road Initiative (BRI) across Asia and Europe, introduction of catastrophe bonds can take the risk off the government balance sheets and reinforce macro-economic stability while providing access to rapid recovery funding.

The day I was writing this article, an earthquake measuring 5.8 magnitude shook Istanbul, causing panic amongst residents, evacuation of schools and public offices. It also led to the collapse of the minaret of a mosque in Turkey’s most populous city with more than 15m residents.

The Turkish quake happened during the same week in which another 5.8 magnitude quake event in north-eastern Pakistan killed 38 people and injured more than 700. It also caused extensive damage to infrastructure and roads in that region of Pakistan.

Belt and Road’s opportunities

ORIGINAL PUBLICATION HERE

As investments into China’s Belt and Road Initiative (BRI) increase, Kirill Savrassov, CEO of Phoenix CRetro Reinsurance Company, told Baden-Baden Today that it represents big opportunities and challenges for the reinsurance industry, especially from a cat perspective.

He said the project, led by China and sometimes described as a multibillion dollar rebirth of the Silk Road, offers a key opportunity in exponential demand in additional cat capacity from local BRI transit markets.

However, he flagged potential challenges, saying: “I would note state ownership of critical infrastructure, low insurance penetration—below 2 or even 1.5 percent— with general underdevelopment of local markets in BRI transit countries, and existing and potential protectionism in re/insurance.”