Inaugural cat bond a clear vote of confidence in Hong Kong: Regulator

The inaugural catastrophe bond issuance in Hong Kong is a clear vote of confidence in the Special Administrative Region (SAR) and a sign of the exciting opportunities that lie ahead, according to regulator the Insurance Authority (IA).

The implementation of Hong Kong’s insurance-linked securities (ILS) regulatory regime and the legislation necessary to establish special purpose insurance or reinsurance vehicles for securitisations and issuance of catastrophe bond notes, is an initiative that has been portrayed as having close ties to mainland China.

This work culminated in the successful issuance of the first catastrophe bond in Hong Kong last month, with the $30 million Greater Bay Re Ltd. (Series 2021-1) cat bond sponsored by mainland and state supported reinsurance giant, China Re Group.

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Catastrophe bonds broaden China’s risk diversification channels: China Re

The issuance of the first catastrophe bond through Hong Kong has helped to open up a new channel for risk diversification for the domestic catastrophe insurance market, according to the sponsor of the Greater Bay Re Ltd. (Series 2021-1), China Re Group.

Last week we reported that China Re had successfully secured the issuance of a $30 million catastrophe bond covering Chinese typhoon risks for its subsidiary China Re P&C, when the anticipated Greater Bay Re transaction was completed.

It’s a landmark cat bond transaction, being the first to be issued out of a new domicile, Hong Kong, while also being the first to cover a new peril from China, in typhoon risk.

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First Hong Kong cat bond, Greater Bay Re gets China Re $30m of typhoon cover

The very first catastrophe bond to be issued out of Hong Kong has now been completed, with a $30 million Greater Bay Re Ltd. (Series 2021-1) cat bond coming to market on behalf of sponsoring reinsurer China Re.

The transaction actually completed in September, but has only come to light this morning as it was relatively privately marketed by Aon we understand, with only a handful of specialist cat bond funds or investors privy to the deal.

The Greater Bay Re Ltd. cat bond was issued as a zero-coupon deal and only provides its sponsor with a single year of retro reinsurance protection we understand.

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UNDP launches Insurance & Risk Finance Facility, ILS support anticipated

The United Nations Development Programme (UNDP) has today launched the Insurance and Risk Finance Facility (IRFF), a new initiative that aims to build financial resilience and bridge a $1.4 trillion global health, mortality, and disaster protection gap, with support from the insurance-linked securities (ILS) market expected in future.

Importantly, this Insurance and Risk Finance Facility (IRFF) will work to channel risk to private insurance, reinsurance and capital markets over-time, and aims to significantly increase the role of insurance and risk-financing in development.

The German Government has contributed €35 million in funding to the Facility, which will be used for technical work and capacity building on the ground, as well as for the development of new insurance products.

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Weather disasters drive US $ 3.64 trillion in losses in 50 years: WMO data

The high costs of weather disasters around the globe is truly laid bare by the latest data from the World Meteorological Organization (WMO), which estimates that weather, climate and water related disasters drove some US$ 3.64 trillion in losses over the last 50 years.

The WMO’s latest Atlas of Mortality and Economic Losses from Weather, Climate and Water Extremes covers the period from 1970 to 2019, during which over 2 million lives were lost to these disasters.

That is from more than 11,000 reported disasters recorded, and during the period the research found that weather, climate and water hazards accounted for 50% of all disasters, 45% of all reported deaths and 74% of all reported economic losses, while more than 91% of these deaths occurred in developing countries.

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Catastrophe bonds marked down on hurricane Ida threat

A number of catastrophe bonds have been marked down in end of month secondary market pricing sheets, with some of the anticipated names suffering declines of between 25% and 35% in value.

After hurricane Ida’s devastating landfall with 150 mph winds in Louisiana on Sunday it was always anticipated that there would be a mark-to-market reaction in catastrophe bonds.

The majority of insurance-linked securities (ILS) fund managers seem relatively comfortable that cat bond losses will be largely mark-to-market from the hurricane, as long as the industry loss remains in the current estimated range of around $15 billion to as high as $25 billion.

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Indonesia launches US $500m risk pooling facility. Risk transfer a goal

The government of Indonesia has launched a new disaster risk pooling facility that will initially have more than US $500 million of capacity available to help pay for the economic costs of natural catastrophes and severe weather events, but with a future goal of transferring some or all of the risk to private insurance or capital market sources.

Indonesia’s move to create a disaster risk pool comes after a number of year’s of work with the World Bank and other organisations to better understand its exposure to disaster risks and the costs it suffers from them.

It’s estimated that Indonesia suffers somewhere between US $1.3 billion and US $1.5 billion of economic damages from natural disasters on average each year.

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Agricultural Impacts of Flooding in Henan, China

The record rainfall that hit the province of Henan in China the week of July 19 caused extensive flooding that led to mass displacement and casualties. Some reports provided estimated impacts to the agricultural sector.  Here, we put those estimates into context for the agricultural insurance market in China.

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Российские аграрии потеряли миллиарды из-за погоды

В российских регионах, в которых был объявлен режим чрезвычайной ситуации (ЧС) из-за потерь в сельском хозяйстве, было застраховано более полутора миллионов гектаров посевов, пишет «Коммерсантъ» со ссылкой на данные Национального союза агростраховщиков (НСА). Всего с ЧС на фоне экстремальных погодных условий, засух и других природных бедствий к моменту подготовки оценок столкнулись 13 субъектов, в девяти из них аграрии заключали договоры на страхование урожая.

С начала года по 11 августа представители сельского хозяйства заявили об ущербе в 19 миллиардов рублей. Однако, как объяснил глава НСА Корней Биждов, сумма может быть меньше. «Практика предыдущих лет показывает, что по мере подтверждения экспертизой оценка уменьшается приблизительно в два раза», — рассказал он. Комиссии по ЧС, которые в регионах создают местные минсельхозы, только начали свою работу. Министерство сельского хозяйства России получит точные подтвержденные сведения к осени.

Глава страхового брокера «Ростеха» — «РТ-Страхование» Николай Галушин при этом пояснил, что в сельском хозяйстве страхуется не более 10 процентов посевов. Общие убытки российских страховщиков от чрезвычайных ситуаций в 2021 году он оценивает в размере до трех миллиардов рублей. В сегменте страхования имущества физических и юридических лиц страховщики вряд ли потеряют из-за ЧС существенные деньги. Скорее всего, больше всего выплат придется на юридические лица, например, из-за ущерба железнодорожным объектам или имуществу энергетиков.

ПОЛНАЯ ОРИГИНАЛЬНАЯ ПУБЛИКАЦИЯ ЗДЕСЬ

Germany & China see costliest disaster losses ever from July flooding: Aon

Both Germany and China have experienced their most costly insured natural disaster loss events in history in July, with both largely related to the impacts of devastating flooding, according to insurance and reinsurance broker Aon.

Germany is expected to face around US $20 billion in economic losses, while across Europe the July flood event is estimated to have cost more than $25 billion.

Of this, Germany is estimated to be facing $5.3 to $6.5 billion of insurance and reinsurance market losses from the flooding, while the rest of Europe is anticipated to be facing at least another US $1.2 billion of insured losses as well.

FULL ORIGINAL PUBLICATION HERE