Demand for Asia Pacific Catastrophe Reinsurance at a Record High in 2013
- Published in iPMI Magazine Reinsurance News
Total Asia Pacific catastrophe limit purchased in 2013 increased for the tenth year in a row, but once again failed to keep pace with strong GDP growth in the region, according to a new report released by Guy Carpenter & Company, LLC.
With excess capacity returning to the market in 2013, reinsurance buyers in the Asia Pacific region were able to secure greater value at renewal, although with recent losses etched into the collective memory of the market their ability to achieve significant price reductions was limited. Total catastrophe excess of limit in the region continued to grow.
In the Asia Pacific Catastrophe Report 2013, Guy Carpenter discusses some of the key drivers that have fuelled this growth in limit over the past ten years, notably an increasing focus on risk-based capital standards, growing awareness of non-modelled perils and rising insurance penetration in our emerging economies. Despite this strong record of catastrophe limit growth over the past ten years, the fact is that it has failed to keep pace with growth in the rapidly expanding economies of the Asia Pacific region over the same period. In many markets the purchase of insurance is still not a priority. In others the actual product on offer does not satisfy the demand.
With dedicated traditional reinsurance sector capital for Asia Pacific at a record high and with alternative capital seeking peak zone catastrophe opportunities in the region, Guy Carpenter predicts that the conditions are ripe for a broader reinsurance community to respond positively to this growth opportunity with innovative and customised solutions. The full report reviews the catastrophe exposure and reinsurance market conditions of major countries in the Asia Pacific region, helping set the stage for the 2014 renewals.