PERILS IED 2024 underlines continued effect of inflation on insurance industry

Zurich-based catastrophe insurance data provider PERILS AG has released its Industry Exposure Database (IED) for 2024, highlighting the continued impact of inflationary developments, with exposure growth at 11.7% year-on-year in USD terms across all markets.

This new instalment of the PERILS IED 2024 includes detailed sums insured exposed to natural perils of USD 111 trillion of property assets.

According to the firm, the impact of inflationary developments on exposures “continues to be visible”, with sums insured for European windstorm increasing by 10.1% year-on-year at constant EUR exchange rates.

Meanwhile, the PERILS IED for Wind Japan remains remarkably stable in JPY with year-on-year growth in the low single digits, reflecting a more moderate inflationary environment in Japan in 2023.

However, in USD the sums insured represent a decline of 5.1% year-on-year due to an appreciating dollar.

Christoph Oehy, CEO of PERILS, commented, “In the IED 2024, the effects of the inflationary environment of the past few years faced by the insurance industry were still very evident. This is because inflation adjustments take time to be fully reflected in the individual portfolios of insurers.

“In addition, real growth and reassessment of exposures after loss events have clearly had an impact. Furthermore, we observe a general increase in insurance penetration in countries affected by major loss events, for example for flood coverage in Germany following the 2022 Bernd flood event or earthquake coverage in Turkey following last year’s Kahramanmaras Earthquake Sequence.”

Oehy continued, “Each year, our global team produces the market portfolios afresh, based on the Cat-exposed sums insured information provided by insurers. Improving the understanding of catastrophe risk is PERILS’ mission from day one and our annual IED update contributes to that mission.

“IEDs are instrumental datasets for a better understanding of Cat risk and can be analysed using Cat risk models to determine potential market losses, as well as for benchmarking an insurance company’s market position or in combination with our event loss data to provide insights into the vulnerability of insured assets.

“We are particularly grateful to our data providers for their ongoing commitment to providing us with their data and making such valuable learnings possible for the industry as a whole.”

Dalida Bachmann, Head of Client Relationship at PERILS, added, “The availability of high-quality market exposure and loss data based on identical sources and methodology is much valued by users of our database.

“This consistency not only supports a range of model validation activities but also facilitates more effective risk transfer when PERILS loss data are used for triggers in insurance-linked securities and industry loss warranty transactions.

“Our exposure data enables users to assess the expected loss costs of such transactions and to define tailor-made, structured industry loss triggers resulting in reduced basis risk for protection buyers.”

The IED 2024 is produced from the ground up by collecting sums of insured information from the
majority of the insurance market across all territories covered by PERILS.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.