Protectionism creates risk concentrations
Friday, 10 27 2017, Category: Insurance and Reinsurance, Country: World
The European insurance federation, Insurance Europe, highlighted the dangers protectionist policies – widespread across a range of African, South American and Asian countries – pose to the jurisdictions they aim to protect in a recent briefing on protectionism.
Regions with protectionist measures in insurance and reinsurance can concentrate risk in the very jurisdictions they seek to remove risk from; rampant compulsory cessions, or “rights of first refusal” require local insurers to cede their risks to local, often state-owned, reinsurers.
Cristina Mihai, head of prudential regulation and international affairs at Insurance Europe, commented; “these kinds of protectionist measures remain a major risk for the jurisdictions that implement them”.