Don’t rely on ambiguous triggers in ILS
Saturday, 03 24 2018, Category: Insurance and Reinsurance, Country: World
The reinsurance and ILS market places itself at risk of arbitration by their use of ambiguous and unreliable industry loss trigger data sources, which can be as random and varied as “any credible source”, according to Property Claim Services (PCS), a Verisk Analytics business.
Use of sometimes random, unofficial and rudimentary data sources as components of triggers on industry loss based transactions dates back more than a decade in reinsurance markets.
The problems can arise when an unofficial source of loss data is used as a determining factor in deciding whether a transaction has been triggered.