To protect insurers against the accumulation of losses resulting from natural calamities
Munich Reinsurance America has unveiled a reinsurance product for insurance companies impacted by rising insured losses from natural catastrophes.
The Nat Cat Frequency Cover is designed to protect insurers against the accumulation of losses resulting from frequent, local weather events, including thunderstorm hazards such as tornadoes or hail, winter storm hazards and wildfire. It can also be meant for selected other perils.
The difficulty that insurers confront with large accumulated losses from local weather events is that traditional reinsurance catastrophe covers, intended to protect against severe events such as earthquakes and named storms, are not providing the necessary coverage to protect against event frequency.
Munich Re America’s Nat Cat Frequency Cover intends to complement the excess of loss catastrophe covers that protect against event severity. By introducing this cover to a reinsurance portfolio, an insurer can better manage their earnings volatility and create financial stability in light of increased weather-related claims.