Cat exposure is a focal point in Taiwan: Guy Carp
Cat exposure is a hot topic for the insurance and reinsurance industry in Taiwan, with clients increasingly calling on Guy Carpenter’s resources to help them deal with cat risk.
That is the view of Danny Yeung, managing director, Taiwan, for Guy Carpenter, commenting on some of the main talking points that occurred during the East Asian Insurance Congress (EAIC), which took place this week in Taiwan.
She said that, in recent years, a number of big cat events in Taiwan caused the market to undergo significant restructuring and there is now far more attention given to cat risk management, with a focus on enhanced data and cat modeling, with some universities developing local cat models.
“Of course there is a lot more to be done going forward but at Guy Carpenter we have been using our resources to help clients understand cat risk and help them to manage their cat exposure,” she said.
She added that faced with a mature, overcapitalized market, insurers are experiencing intense competition and growing pressure to find innovative products to offer to clients.
“Most of the insurance companies belong to financial groups so they have to deliver value to the shareholders and they are striving to do that within the current landscape,” she said.
Reinsurers are seeing client retention increasing over the years, with the major demand being for cat reinsurance due to Taiwan’s exposure to earthquake, typhoon and flood.
“Moving forward, the reinsurance spend will still be on cat risk management: more protection is the major reinsurance requirement,” she said.
She added that talk at this year’s EAIC focused mainly around the abundant supply of reinsurance capacity and the over abundant supply of insurance capacity.
Diversification is a related theme, with insurers discussing how to broaden their portfolio by creating innovative insurance products to offer to the market, and how to broaden their geographical reach.
“A few of the big insurers, including Fubon and Cathay Century, have overseas expansion planned already in China and Vietnam, where they already have subsidiary companies set up.
“These bigger players find themselves being boxed in Taiwan because the market is not growing, so they have already mapped out an international expansion plan.”
She added that as a leading reinsurance broker in the Taiwanese market for a number of years, Guy Carpenter’s major target is to deliver value to its clients, particularly in the current environment, where they are helping clients to explore multiple options.
