XL Catlin’s Brendan Plessis tells GR that capital has to move from mature markets to assist emerging economies

Closing the protection gap will mean fresh thinking on analytics, but should be a focus for deploying capital away from competitive peak catastrophe zones, XL Catlin’s head of emerging markets Brendan Plessis tells GR. That means working with government and intergovernmental bodies.

XL Catlin has been working with the World Bank through the Insurance Development Forum (IDF), along with other re/insurers and brokers, on pre- and post-event disaster mitigation to reduce the gap between losses covered by insurance and total economic losses.

“The World Bank is massive in this space to reduce the gap between economic and insured losses,” said Plessis. “It’s increasingly important for the industry to understand what the multilateral institutions. We mustn’t dictate but try to urge nations at risk of natural disaster to embrace the benefits insurance can bring and its role in shifting the needle on GDP.”

The World Bank has acted as an intermediary and arranger in catastrophe risk transactions. It connects capital and insurance markets with the risks faced by the multilateral institutions its treasury funds: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

As a World Bank-approved swap counterparty, XL Catlin is positioned to support the IBRD and IDA, as well as the International Finance Corporation, which works with business in developing economies, to provide reinsurance cover in developing countries. 

Plessis also lists the Asian Development Bank (ADB), the UK’s Department for International Development (DFID) and Germany’s KFW development bank as important institutions to with which to engage.

“It’s increasingly clear that capital attracted to mature markets needs to move to assist emerging economies,” he said. “It might be unpopular from an analytics perspective because of lack of data granularity, requiring assumptions to be made. As a consequence, we’ve also been working with academic institutions such as the Cambridge Centre for Risk Studies, to try to bring fresh thinking to analytics to close protection gap.”