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Reinsurance
Jyoti Majumdar, 15 May 2014, Swiss Reinsuarnce Company
Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
Reinsurance
Cat models
4 Box principle
Climate change
Swiss Re, ECA, Sigma
What's on your mind?
Flavour only
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Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
Reinsurance
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Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
• Helps insurers to manage their risks
– Absorbing some of the their losses
• Stabilises insurance company's results
– Enables growth and innovation to continue
• Invest large sum of money in financial markets
– Contributes significantly to the real economy
Reinsurance
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Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
Natural catastrophes (events)1970–2012
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0
20
40
60
80
100
120
140
160
180
200
Source: Swiss Re, Sigma
Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
Insured catastrophe losses 1970–2012
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Source: Swiss Re, Sigma
0
20
40
60
80
100
120
1970 1975 1980 1985 1990 1995 2000 2005 2010
Earthquakes/tsunamis Weather-related natural catastrophes
1992: Hurricane Andrew
1994: Northridge
EQ
1999: Winter storm
Lothar
2004: Hurricanes Ivan, Charley, Frances
2005: Hurricanes Katrina, Rita, Wilma
2008: Hurricanes Ike,
Gustav
USD bn, at 2012 prices
2011: Japan , NZ EQs, Thailand flood
Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
Cat Modelling : 4 Box Principle
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Natural Hazard
Vulnerability
Distribution of property values
What can happen? Example Hurricane “Charley” Aug 2004
How do the exposed values react?
What is affected?
How is the exposure covered? Limit
Deductible
Insurance conditions
Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
Cat Modelling : 4 Box Principle
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Natural Hazard
Vulnerability
Distribution of property values
EQ, wind engineering, hydrologist Example Hurricane “Charley” Aug 2004
Civil, structural engineering
Geoinformatics, cartography
Mathematics, statistics, actuarial science Limit
Deductible
Insurance conditions
Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
• Catastrophe covers are large and complex
• Data is the key
• Multidisciplinary approach is required
• All models are wrong, some of them are useful
Catastrophe models
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Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company 10
Economics of Climate Adaptation
Objectives: n Provide decision makers with methodology to develop an adaptation
strategy
n Unlock global risk transfer markets
Key features: n Total climate risk approach:
- today’s climate risk,
- economic development paths
- climate change trend
Swiss Re’s role: n Lead contributor to the research
Please find the full study at www.swissre.com/climatechange
Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company
Contact Information
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Jyoti Majumdar
Head of Client Market Property & Casualty, India
Swiss Re Services India Private Ltd.
7th Floor, Tower A, Peninsula Corporate Park, Ganpatrao Kadam Marg,
Lower Parel, Mumbai INDIA
Tel ++91 22 6661 2133
Jyoti Majumdar | 15 May 2014 | Swiss Reinsuarnce Company 12