Holistic approach needed for rising natural catastrophe risks: Brahin, Swiss Re

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Philippe Brahin, Head Americas for Public Sector Solutions at Swiss Re, emphasises the need for a holistic approach to managing increasing natural catastrophe risks in order to enhance the accessibility and affordability of insurance.

The Swiss Re Institute’s latest report highlights that natural catastrophes in 2023 caused $280 billion in economic losses, with insured losses accounting for 40%. This figure is significantly higher than the previous 10-year average of $89 billion.

The demand for natural catastrophe re/insurance has exceeded supply, creating a protection gap that raises social and economic concerns about the insurability and affordability of insurance for individuals and communities.

Brahin advocates for a holistic strategy to address these issues, incorporating risk modelling, risk transfer, and risk insights. He states, “With public, private sector partnerships, at their heart, such an approach can ensure long-term insurability through active adaptation and risk management.”

He further adds, “The industry also needs to continue to innovate in order to meet increasingly complex needs. Traditional indemnity-based insurance solutions do not always provide the breadth of financial protection and speed of financial support required by States, municipalities or government agencies. That’s why I am delighted that we have seen welcome advancement, particularly with our public sector partners, in the area of parametric insurance cover.”

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For example, Swiss Re recently partnered with New York City, ICEYE, and Guy Carpenter to offer parametric coverage for excess rainfall and storm surge events that can lead to severe flooding. After such an event, the Center for NYC Neighbourhoods receives a parametric payout to provide emergency cash grants to eligible New Yorkers.

Brahin concludes, “We hope to replicate this for populations and for emergency funding that otherwise would not have been available.”

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