NSW Faces Catastrophic Future
The Importance of Rent Default
Residential Strata Insurance - Fact Sheet
Weather risks imperil 70% of business
THE INCREASE of natural perils has potentially exposed more than 70% of companies in the world to some form of weather risk.
This dire trend was related by Allianz Risk Transfer (ART) head of Insurance Linked Markets, Richard Boyd to big brokers and clients in Australia recently. He was part of a global Allianz team explaining Weather Derivatives and Weather Index Insurance as forms of protection to this exposure. “Weather-related events can have a severe impact on a business’s costs, operations, pricing and profits,” Mr Boyd said.
“Do shareholders expect the business to retain that risk, or is it something that should be transferred away, thereby allowing management to concentrate on running their primary business without the added volatility of weather influences?” Weather risk insurance historically had been a common risk solution for energy companies and nowadays there is a marked growth in the demand for such protection across other industries worldwide. “It is definitely an area of risk protection that is continuing to grow and diversify in line with client demand,” Mr Boyd said.
“In Australia, for example, we’ve received a lot of interest from agriculture, mining, and transport businesses who want to protect themselves against events like severe rain and flood.” He said ART’s Weather Index Insurance offering complemented traditional property insurance by providing insured businesses with an added security in the event of a weather-related trigger event.
In some cases, weather-related events were excluded from traditional insurance products, the price of traditional insurance might be prohibitive or ambiguity might exist around whether an event was covered or not.
“Weather Index Protection is very explicit and provides a very quick payout as there is an independent and pre-defined method for determining a claim payout.
“As one of the few companies in the world to offer Weather Index Protection, Allianz, partnering with dedicated weather and catastrophe risk investment fund, Nephila Capital, gives clients highly flexible and customised solutions for transferring weather risk and reducing business exposure to such risks.”
AGCS Pacific's general manager Holger Schaefer said ART’s weather risk offering was of particular interest to Australia and New Zealand brokers and clients who had been affected by recent weather-related disasters.
“Alternative ways in which businesses can structure and manage weather risks is a topic fast gaining momentum among our brokers and clients,” he added.
Source: Insurance News - 8 April 2011
