Counterparty diversification affects loss level
Friday, 12 08 2017, Category: Insurance and Reinsurance, Country: World
With global re/insurance industry losses from Q3 2017 natural catastrophes estimated at $100 billion, and just $30 billion reported in re/insurers’ losses so far, experts have been speculating on whose pockets could yet be emptied to fill the insured loss gap.
CreditSights has said that reinsurers may have reported fewer losses this year due to a change in primary insurers’ strategy – to one that draws on a broader portfolio of reinsurance programmes to further diversify risk.
“One possible reason for this new phenomenon may be that Primary insurers are spreading risk across multiple reinsurers at different attachment points to reduce counterparty risk,” CreditSight explained.