Leveraging the role of property catastrophe reinsurance markets: The case of India, Indonesia, Myanmar, and the Philippines

Insurance markets play an essential role in the financial management of disaster risks by encouraging proper risk management and providing a source of financing to respond to the damages and losses incurred by households, businesses and governments as a result of catastrophe events. A number of studies have shown the positive impact that insurance coverage for catastrophe risks can have in reducing the economic disruption that normally follows disaster events – by providing a relatively quick source of funding for recovery and reconstruction and reducing the amount of losses that would otherwise need to be absorbed by households, businesses and government.

This report provides an overview of the insurance coverage available for catastrophe perils in India, Indonesia, Myanmar and the Philippines as well as the regulatory and supervisory frameworks in place to govern the use of reinsurance for managing exposure to catastrophe risks.

It examines the approach of insurance regulators and supervisors in each country to overseeing cedants’ transfer of risk to reinsurance markets, including reinsurance programme review, quantitative retention requirements, capital treatment of risks transferred to reinsurance markets and access to alternative risk transfer arrangements. It also examines approaches to the oversight of reinsurance placements, including the authorisation of reinsurers that can assume risk from domestic cedants and the requirements imposed on reinsurance placements