IAIS ponders early warning/ early reaction mechanism for reinsured catastrophes

The International Association of Insurance Supervisors (IAIS) and specifically the Reinsurance Transparency Group (RTG) are considering an early warning/early reaction mechanism for reinsured major catastrophes, especially catastrophes that span multiple jurisdictions.
IAIS’s Global Reinsurance Market Report (GRMR) 2008 notes that some senior (re)insurance supervisors recently considered the introduction of such a mechanism to enable coordination efforts when catastrophes such as hurricanes, storms and typhoons strike.
For example, in the aftermath of a catastrophe, GRMR data would be immediately available to assess the shock absorption capacity of the industry by providing an aggregated estimate of the total exposure.
“Moreover, the IAIS secretariat is well-positioned to approach RTG supervisors immediately after such an event, helping to facilitate mutual trust among market participants in the event’s aftermath,” the report says. “In this respect, such an early warning/ early reaction system has the potential to contribute to financial stability.”