POWERED BY: BADENBADEN
Industry must get
better grip on flood
risk across Europe
THE RE/INSURANCE INDUSTRY MUST GET A
better handle on flood risk in Europe, which
remains underestimated and underinsured,
Michael Pickel, member of the executive board
of Hannover Re responsible for target markets
in P&C reinsurance, told Baden-Baden Today.
Floods in 2013 caused around €10 billion
worth of damage in Bavaria, Saxony and
Saxony-Anhalt, as well as in neighbouring
countries, and many affected people lacked
suitable insurance coverage.
“Flood remains an underestimated and
underinsured risk, as we have seen in the US with
hurricanes Harvey and Florence,” Pickel said.
In 2017, Harvey unleashed an unprecedented
amount of accumulated rain in the US, causing
catastrophic flooding in some of the most
populated areas of the Gulf Coast. Around
200,000 homes were flooded, and 500,000
vehicles damaged. Total economic losses
resulting from Harvey are estimated at $85
billion; around $30 billion of this was insured.
Pickel suggested that flood models for
Europe need to be improved to provide better
transparency on existing risks and improve
mitigation strategies.
“We should support existing and new
initiatives in risk assessment and risk
modelling, and align forces to help close this
protection gap,” he said.
Researchers are predicting a significant
increase in storms in Europe, and climate
change is believed to be a driver for this. This
has motivated some re/insurers to redesign
their risk models to calculate potential losses.
Floods are among the most costly natural
disasters in Europe, according to a publication
on the European Commission’s online
science and knowledge service. Their impact
has grown steadily in the past decades due to
population growth and more development in
areas prone to flooding.
A study by the EU, Multi-model projections
In association with:
of river flood (continued on top of page 4) >> Michael Pickel
DAY 2
UnipolSai shuns offers of private deal on placement
ITALIAN INSURER UNIPOLSAI ASSICURAZIONI
has been approached by a number of reinsurers
looking to complete a private placement for
the additional €200 million of coverage it is
seeking this year—but it will remain loyal to
its existing panel of 17 reinsurers, its buyer
told Baden-Baden Today.
Marco Sordoni, head of reinsurance
buying for the Italian insurer, said the
company plans to increase the €1.5 billion of
property-catastrophe reinsurance coverage it
bought last year to some €1.7 to €1.8 billion.
The increase is due to organic growth
within the insurer’s underlying book of
business; its overall mix remains roughly the
same as in previous years.
The insurer plans to leverage capacity within
its existing panel of reinsurers, as long as the
rate remains comparable with the rest of the
placement, Sordoni said. He added that using
the existing panel is also more compatible with
the internal solvency model it uses.
TODAY
TUESDAY OCTOBER 23 2018
Cedants reduce
size of panels
Jörg Bruniecki
6>>
Protection gap
can be solved
Claudia Cordioli
9>>
“We are increasing the size of the placement
but the composition of the business remains
stable and, in my view, that means the price
should also remain stable,” he said. “If it is, I
would prefer to deal with our existing panel of
17 reinsurers.
“We have had a number of offers to do a
private deal at very favourable terms. The appetite
of the market is very healthy at that level. But
we also have to take into account the impact
that would (continued on bottom of page 4) >>