Sharing data will not inhibit an individual insurer’s business, but rather will promote business across the entire industry, says Tom Johansmeyer of ISO/Verisk Insurance Solutions and Rachel Anne Carter of Carter Insurance Innovations.
Throughout the run-up to the reinsurance renewal season, the story has been the same: Terror accumulations are growing, but they’re still manageable. After the renewal? Well, that’s a different story. The industry will probably need to take a hard look at its terror accumulations.
It’s tempting, of course, to point to the high-profile terror attacks of the past 12 months, not to mention the concentration of activity that occurred over the summer of 2016. While they’re tragic for those affected—and make the industry take notice—the lack of physical property damage hasn’t driven significant capital management risk. Sure, terror activity of any kind makes you think about what’s in your book, but there’s a difference between a minor event with limited casualties (let alone physical damage) and one that causes massive industry losses.
The real problem is that terror has been creeping its way into global property catastrophe treaties, thanks to soft market conditions. Bit by bit, it may be tolerable, but over time, it can lead to significant exposure that needs to be hedged. And despite the ample capacity in the market and belief that there’s plenty of traditional capacity available, two things are clear.
To continue reading, you need a subscription to Intelligent Insurer. Start a subscription today for £655.
In-house feature articles, the archive and expert comment require a paid subscription. Subscribe now.
Want to give it a try? We are offering a two week free trial to the Intelligent Insurer website – register and select “Two Week Free Trial” to begin access to the full Intelligent Insurer archive and read the latest news, features and expert comment. Begin your free trial here.
Is your 2 week free trial about to end? Upgrade to a 12 month subscription for £655 now.
If you have already subscribed please login.
If you have any technical issues please contact support.
terror, industry, loss, market, global, risk, insurance, aggregation, ILWs, ILS