The Reinsurance Association of America has issued a reassuring bulletin that the industry can not only cope with the recent losses from the earthquake and tsunami that struck Japan, but will also remain prepared to handle future disasters as well.
“The reinsurance industry has helped global economies recover from every major catastrophe over the past century,” said the RAA. “With a capital position that stood at $470 billion at the end of the third quarter in 2010, the global reinsurance industry once again stands ready to pay a significant share of the insured loss from the March 11 Japan earthquake and tsunami.”
The bulletin also pointed out that “60 percent of the losses related to the events of September 11, 2001, were absorbed by the global reinsurance industry; in 2005, 61 percent of Hurricanes Katrina, Rita and Wilma losses were ultimately borne by reinsurers; and in 2008, approximately one-third of insured losses from Hurricanes Ike and Gustav were reinsured.”
It also reaffirmed that “reinsurance is critical to primary insurance markets as a risk management tool to improve their capacity and financial performance, enhance financial security, and reduce financial volatility because it diversifies and spreads risk around the globe. Reinsurance is the most efficient capital management tool available to insurers.”
Source: Reinsurance Association of America
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