The International Association of Insurance Supervisors (IAIS) published its second global reinsurance market report, reviewing the overall financial health of the sector during 2004. The report states that reinsurers' participation in credit risk transfer remains modest and that, more generally, reinsurers' involvement in derivatives continues to be primarily for hedging rather than speculative purposes. It outlines how regulatory authorities in each of the reporting jurisdictions deal with stress and scenario testing as well as giving examples of how individual reinsurers deal with this subject.
The report also discusses 2005 loss-causing events. 2005 was a year that included several natural catastrophes ranging from the Asian tsunami in the early days of the New Year to the US hurricanes in September and October.
The reinsurance sector showed resilience in the face of such losses, helped by the fact that the past few years have been characterised by a hard market which had enabled reinsurance companies to rebuild balance sheets depleted by the WTC tragedy. Indeed, to date only a handful of companies have gone into run off as a result of the US hurricanes and substantial additional capital has been raised, much of which has gone into the creation of new companies, principally in Bermuda.
Press release
Report
© IAIS - International Association of Insurance Supervisors
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