Swiss Re supports independent agency to aggregate European claims

Swiss Re advocates the establishment of an independent agency to aggregate European claims data and provide the insurance industry with an efficient market loss index for natural catastrophe risks, according to a recent report. This industry-wide effort will facilitate the further expansion of the insurance-linked securities (ILS) market in Europe and improve the transparency of natural catastrophe claims data.
Current industry trends indicate that the European insurance industry will benefit from greater access to capital market solutions to cover natural catastrophe risks.
Globally, the insurance-linked securities market has grown significantly in recent years. With the issuance of catastrophe bonds increasing by 130%, 2006 was a record breaking year bringing the total outstanding catastrophe bonds to USD 8.1 billion, according to Swiss Re.
An important recent development was the widespread use of market loss indexes as bond loss triggers for US risks. Also, the market for industry loss warranties (ILW) has grown significantly for US natural catastrophe exposures and currently totals in excess of USD 4 billion.
In Europe, the growth of the ILS and ILW markets remains constrained due to the lack of an independent agency to collect industry-wide data and establish a reliable and effective market loss index.
In addition to the advantages of more robust European ILS and ILW markets, reliable market loss data will benefit the industry by improving benchmarking, underwriting and exposure management.