The heavy rain that hit Dubai in April 2024 were a major talking point in one-to-one meetings at this year’s DWIC.

One of those who gave their time to GR was Henri Labat, senior executive officer, IGI Dubai. He said the floods would have a major impact on treaty reinsurance business.

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“But what we really expect are some changes to the treaty structures and on the treaty prices,” he said. “Many local treaties are still placed on proportional basis with very small margins for reinsurers and this should change”.

There will be major effects on the primary market of local insurers of business that has borne the brunt of local losses, such as property and motor business.

“The local insurance market is very dependant on the reinsurance and mainly on the treaty side,” he said.

“Local companies buy proportional treaties. We think this is going to change after this event, because insurers are going to be heavily impacted by it and there will be also accumulations for reinsurers”.

One of the great misconceptions around the Middle East, he emphasised, is that it is not prone to natural catastrophe risk, disproven by recent events.

“That’s a difficult thing to assess for the market and for the reinsurers,” said Labat.

“Most of the models are based on historical data. If you look at Dubai 25 years ago, it was mostly sand with limited insured values. Historical data is not there.

“These kind of events are becoming more frequent and more intense, probably because of climate change. The current models are not sufficiently accurate, and that’s a big, big lesson for all of us,” he added.