In a move some experts are saying has the potential to boost insurance-linked derivatives, a group of insurers and brokers have created PERILS A.G., a Zurich, Switzerland-based company that will provide the European marketplace with aggregated catastrophe insurance data in a subscription service to the European market.
The new company will target insurers, reinsurers, brokers, risk modelers and banks with this aggregated data, along with newly created loss estimates per risk type after natural catastrophes.
PERILS expects the industry exposure data and loss information will have significant value to subscribers by improving the understanding of the potential frequency and severity of natural catastrophes at various magnitudes, said Allianz in a statement. This information will, in turn, aid in the risk management and underwriting of natural catastrophe risk. Overall, the combination of consistent industry exposure portfolio data and corresponding event loss information is likely to enhance the modeling of natural catastrophe risk.
Greater transparency surrounding industry losses is likely to further facilitate the establishment of accurate and robust loss triggers for Catastrophe Bond structures, Industry Loss Warranties (ILWs) and other capital markets products. PERILS's loss estimates will be a welcome addition to the Insurance-Linked Securities (ILS) sector, and will greatly improve insurers' and reinsurers' abilities to seek further capacity for peak European natural catastrophe risk, the company said.
PERILS is an industry-wide initiative with a governance structure established to ensure significant industry independence. Founded by Allianz S.E., AXA S.A., Groupama S.A., Guy Carpenter & Co. LLC, Munich Reinsurance Co., PartnerRe Ltd., Swiss Reinsurance Co. and Zurich Financial Services Group, the new corporation is expected to open its doors the second half of this year. PERILS will focus initially on Belgium, Denmark, France, Germany, Holland, Ireland, Luxembourg, Switzerland and the UK. Expansion to other European countries is anticipated to follow in 2010.
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