29 October 2015 News

$2.7 trillion natural cat losses uninsured between 1970-2014: Guy Carp

A total sum of $2.7 trillion, or 73 percent, of natural catastrophe losses globally were uninsured between 1970-2014, according to a new report by reinsurer Guy Carpenter.

The report, Partnerships: The Way to Public Sector Risk Financing, examines the shifting economic and risk landscapes that are driving public sector entities to consider new approaches to risk financing.

It claims that heads of government, international trade organisations and private-sector risk bearers are seeking to re-examine roles and responsibilities through which societies can better manage these complicated risks.

“The impact that catastrophic loss can have on the fiscal position and tax base of government entities across the globe is significant,” said Britt Newhouse, chairman of Guy Carpenter.

The creation of private sector pre-financing options will not only relieve the burden on taxpayers and public finances, but will migrate the management of these catastrophes to insurance and reinsurance companies where claims handling and risk management are at the core of their operations.”

As governments across the globe examine new methods to manage and transfer this risk to the private sector, there are many developments underway to support this changing paradigm, according to the reinsurer. These include public-private-partnerships (PPPs) and an increase in capital entering the re/insurance market, as well as advancements in improving the measurability of risk.

“We have seen significant growth in public sector entities transferring risk to the reinsurance market via traditional risk transfer structures, collateralised reinsurance and catastrophe bonds,” said Jonathan Clark, managing director and North America head of Guy Carpenter’s public sector specialty practice.

“Reinsurance capacity has been instrumental in providing both savings to public sector entities in years with outsized loss activity as well as protections for loss reserve funds/surplus. At Guy Carpenter, we are committed to helping our clients understand the evolving landscape while supporting their efforts to engage and take advantage of promising business opportunities.”

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk