Faced with the possibility of “peak year” insured losses exceeding $300 billion, the Swiss Re Institute has suggested that the well-capitalised reinsurance sector, backed by $500 billion in capital, is pivotal to absorb large shocks.
While secondary perils continue to generate significant losses, Swiss Re’s latest report highlights that primary perils, such as hurricanes and earthquakes, remain the most severe threat, with the potential to push insured losses beyond $300 billion in a peak year.
The reinsurer states that peak years, due to a few primary-peril events or the accumulation of both secondary-peril and primary-peril events, “should not be considered an anomaly”.
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