NEWS
More cat events in Asia illustrate need for reliable cat info
The frequency and severity of cat events in the Asia-Pacific region has highlighted the importance of the availability of independent, reliable and timely industry cat information, Darryl Pidcock, head of PERILS Asia-Pacific, told SIRC Today.
“The Asia-Pacific region is highly exposed to a range of natural perils and has experienced a number of cat events during 2020,” he said. “Each event poses particular challenges for the industry, such as managing large volumes of claims, producing reliable market loss estimates, and reporting losses in a timely manner.
“In such a dynamic loss environment, access to reliable data in a timely fashion from an independent source is essential, and PERILS has been working closely with the markets across the region and participating in various industry initiatives designed to enhance data availability.”
Pidcock said PERILS is working with local and international practitioners in South East Asia focusing in particular on Indonesia, the Philippines and Thailand. A common theme in discussions is the continued challenge of sourcing reliable exposure and loss information, he noted.
“We are participating in numerous initiatives involving industry participants and regulators, and our hope is that in the near future given this level of cooperation we will be able to establish industry exposure databases for these three countries.”
He added that the recent launch of the CLIX event loss database on the CRESTA platform is another way PERILS is working to boost data availability for the region. This index, launched in October, provides loss estimates and other event-related data on cat events with an insured loss of in excess of $1 billion since 2000. This includes numerous major nat cat events which occurred in the Asia-Pacific region during this period.
“In such a dynamic loss environment, access to reliable data in a timely fashion from an independent source is essential.”
Darryl Pidcock, PERILS
Facilitating growth
Against this backdrop, Pidcock said, there is strong demand from international capacity providers including reinsurers, retrocession markets and insurance-linked securities (ILS) funds for more granular exposure data across Asia-Pacific, particularly given increasing exposure levels and the growing impact from nat cat events.
“The lack of data and the limitations it creates for producing reliable loss estimates have been starkly highlighted by a number of recent major events,” he said.
“Our experience has shown that the availability of independent exposure and loss data can increase market confidence and boost capacity inflows into exposed regions.
“The ability to provide reliable data is also vital for facilitating the renewals process, and given the backdrop of the current evolving market conditions it is more important than ever. Such independent information also provides a means of benchmarking performance in what are increasingly competitive market environments.”
Pidcock added that, working with local markets, PERILS has observed an increasing focus on retrocession and alternative capital markets in the region, as demonstrated by the recent ILS initiative undertaken by the Hong Kong and Singapore governments.
“Such initiatives add further impetus to the need for more granular loss data to support the growth of the ILS sector and facilitate the flow of new capital into the region,” he explained.
“The demand for timely access to comprehensive exposure data across the Asia-Pacific region is increasing in tandem with the frequency and potential severity of nat cat events.
“Such data is vital to the expansion of capacity and the growth of alternative capital across the region, and by working with local and international insurance companies as well as regulators, PERILS will continue to play its part in creating a more exposure data-rich environment that will support this,” he concluded.
Main image: shutterstock.com / ymphotos
