Policymakers in Asia-Pacific will increasingly collaborate with reinsurers in an attempt to maintain affordability and necessary protection, as well as spread risk awareness, says S&P Global Ratings.
Ever-rising catastrophe claims are changing reinsurance markets. Higher costs for reinsurance inflate the costs for primary insurers and, ultimately, the buyers of protection.
One form of involvement is catastrophe insurance/reinsurance pools. This is according to a report published by S&P Global Ratings titled, "Asia-Pacific Reinsurers And Governments Fortify Natural Disaster Defenses."
"We see reinsurance demand as accelerating in emerging Asia, supported by factors such as more natural catastrophes and growth prospects in agriculture insurance," said S&P Global Ratings credit analyst WenWen Chen.
"For reinsurers, we expect enhanced collaboration with primary insurers to share and increase knowledge systems," Ms. Chen said.
Increased risk awareness and preemptive risk management for weather events across the chain—from households and companies to insurers, reinsurers and government planners—are a more sustainable way to deal with more frequent weather-related cataclysms.
Given the rise of weather-related disasters in recent years, reinsurers will likely more actively review their retained exposures and recalibrate their risk appetite. They will also test the efficacy of their retrocession programmes.