Correlations between perils not substantial for reinsurers
Saturday, 11 26 2016, Category: Nature, Country: World
The majority of perils are not substantially correlated enough to warrant changes to the amount of capital held to cover extreme weather claims, according to a study from Lloyd’s.
The report built upon Met Office research and the links between extreme weather events occurring in separate regions of the world that can take place over a range of timescales from days to years, known as teleconnections.
The report found that extreme weather events are not linked by teleconnections and can therefore be considered independent by global reinsurers when asserting many of their key aggregate risks around the world.
Source: Intelligent Insurer