Advertise here, Reinsurance News

Menu

Reinsurance News

Reinsurers advised caution on casualty catastrophe treaties: Willis Towers Watson

16th June 2017 - Author: Staff Writer

Willis Towers Watson reinsurance risk management specialist, Pete Thomas, has cautioned reinsurers to review casualty catastrophe treaties in light of administration changes.

Willis logoHe said experience has proven that when big changes are evident in society, they have a significant knock-on effect on how effective and comprehensive coverage against political and social risk, duration risk and inflation is, in the context of reinsurance limits.

And proper review of treaties to insure they are still relevant to protecting insurers against risks and an adequate reinsurance limit, “could be the difference between insolvency and solvency further down the track.”

Casualty catastrophe reinsurance – which insurers primarily buy as franchise protection – is unique, Thomas said, in that it’s supposed to cover the insurer against unexpected future losses.

Policies with accident and occurrence loss triggers, for example, could impact an insurer for decades.

In cases where casualty coverage treaties aren’t regularly reviewed and updated, the degree of protection they offer comes into question: “The protection challenge is further compounded by the reality that global, national, state and regional legislation, together with the social, academic, political and legal assumptions that underpinned the underwriters’ decision to write the risk or class of risk, change virtually the moment the policy is bound.”

The Willis risk specialist said that new legal legislation, for instance, would “dilute” software and app manufacturers’ contractual protections and thus enhance injured parties’ ability to collect damages – which would be funded by “today’s casualty insurance policies even though the cases may arise many years into the future.”

Reinsurers and insurers are advised to go over policy wordings with a fine-tooth comb, to identify areas which could now be ambiguous, obsolete, or have been expanded by the latest judicial decisions.

One of the fastest changing sectors of industry, technology underwriting, is an area to take particular note of – where original policies quickly become lost and flawed within their changing context.

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous article:
London re/insurance centre will remain unchallenged by Brexit: Aon Benfield

An Aon Benfield publication on the potential impact of Brexit on re/insurers states the London specialty re/insurance centre will remain...

Close