News by sections

News by region
Issue archives
Archive section
Emerging talent
Emerging talent profiles
Domicile guidebook
Guidebook online
Search site
Features
Interviews
Domicile profiles
Generic business image for news article Image: Shutterstock

14 August 2013
Burlington
Reporter Mark Dugdale

Share this article





VCIA 2013: backed for the future

There is no “game changing” natural catastrophe on the horizon for reinsurers, predicted a keynote speaker at the Vermont Captive Insurance Association annual conference.

Frank Nutter, who leads the Reinsurance Association of America, focused his keynote speech on future trends that could affect captive, reinsurance and traditional insurance companies.

He said that reinsurers have dealt with severe natural catastrophes, like they did in 2011 when devastating earthquakes and weather-related catastrophes struck countries including New Zealand and Japan, with relative ease.

The 2011 natural catastrophes—the cost of which was approximately $380 billion, according to Munich Re—registered as “barely a blip” on reinsurers’ balance sheets.

Reinsurers’ enterprise risk management programmes and sensible pricing, among others, are why they can deal with such extreme losses, said Nutter, who concluded that a “game changing” natural catastrophe in the future is unlikely.

He added that a devastating terrorist attack in the future could affect reinsurers, although that too would probably not be “game changing”.

Nutter also warned that the Terrorism Risk Insurance Act (TRIA), signed into US law in 2002 following 9/11, is set to expire at the end of 2014 and will “no longer be of benefit to captive insurers”.

US Congress is considering changing the act ahead of it expiring and plans to hold a hearing on the subject in September.

Nutter urged captives and their service providers to attend or provide comments, but he added that “[US Congress doesn’t] want to hear that it should be extended in its current form”.

Subscribe advert
Advertisement
Get in touch
News
More sections
Black Knight Media