A new report from Fitch Ratings has suggested that insurance-linked securities (ILS), catastrophe bonds, and parametric insurance solutions can help re/insurers innovate in order to balance the conflicting goals of expanding access to affordable natural catastrophe cover, without impairing underwriting principles.
In the report, the agency highlights how socioeconomic factors such as wealth creation and urbanisation, alongside climate change, have contributed towards higher economic and insured losses due to natural catastrophe events.
The agency said that it expects losses to increase over the medium-to-long term, driven by more frequent and more severe nat cat events linked to wildfires or extreme precipitation.
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