Natural catastrophes and reinsurance

Each year countless human lives are lost and considerable property damage is caused by natural catastrophes.

Natural catastrophes remain unpredictable in spite of huge technical and scientific advances. Nevertheless, our understanding of the causes and effects of such extreme events has improved dramatically over the past few decades. This knowledge has flowed into hazard maps, construction standards and emergency planning and has helped us to be better prepared to tackle future scenarios.

One of the key responsibilities of re/insurers is to help in the risk mitigation process. The objective is to form a community of insureds whose premium payments will be sufficient to cover the cost of repairing the damage in the wake of natural catastrophes. Demand for insurance against natural catastrophes such as earthquakes, windstorms and floods has steadily increased in the past, as has the willingness of re/insurers to cover such risks.

This publication illustrates systems and methods used by re/insurers to analyse and assess the risk arising from different natural hazards.

Swiss Re offers clients and other interested parties a wide range of information on CatNet. This site includes data on historical events and analyses of various insurance markets.