International Insurance Supervisors Hear From U.S.RE Europe Exec
Mark Lucas, Managing Director of U.S. RE-Europe, recently addressed the 2nd Annual International Insurance Supervision Seminar on Core Supervisory Issues in Beatenberg, Switzerland. Regulators from 28 countries in Europe, Asia, and Africa were in attendance.
Lucas explained the critical role of reinsurance with special emphasis on Catastrophe Excess-of-Loss protections. To underline the importance of buying adequate catastrophe reinsurance, Lucas focused on two extreme losses: Winter Storm Anatol in December, 1999, which produced winds of hurricane force causing all the larger Danish insurers to blow through their reinsurance limits; and the September 11, 2001 attack on the World Trade Center.
These events caught the insurance market off guard and caused insurers and regulators to reexamine the adequacy of reinsurance programs, Lucas observed. He said the regulators were concerned about how to ensure that insurers are adequately protected in case of major losses. The decision on how much reinsurance to buy is up to insurance company managements. However, Lucas noted that in some countries, regulatory authorities provide certain guidelines for companies to follow. "The regulator's interest is to protect the policyholders and ensuring that the companies buy sufficient reinsurance is an important step in that direction," Lucas said.