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CatX integrates Perils indices and loss reports into its platform to increase its index-based risk transfer capabilities.
Perils is one of the leading index and event loss providers. The organization provides high-quality data for the insurance industry to settle index-based risk transfer products. Perils supports 21 countries with a strong focus on Europe. The organization covers multiple perils, including earthquake, extratropical windstorm, fire, flood, and hail.
With the integration of PERILS investors can invest in index-based structures such as industry loss warranties to build and shape their investment portfolio. Using index-based solutions offers multiple advantages:
Reduce moral hazard: industry loss thresholds and reporting by an independent party reduces risk of adverse selection of risk exposures
Diversify risk exposure: Indices allow for direct participation in an industry portfolio of specific risk
Increase transparency: Insured losses are compiled and reported transparently by an independent third party
Lower transaction costs: Simple structure and legal language result in lower issuance costs
On CatX, insurers can select the PERILS indices they would like to use for their transaction in the submission builder. By setting the required parameters for the underlying index (i.e. attachment and limit), they are able to obtain quotes from alternative capital providers. Using index-based solutions offers insurers a number of advantages:
Improve rates on-line: Investor interest in simplified, transparent structures means insurers can access capacity at improved rates
Increase speed to market: Using an index as the basis for the protection helps to increase the speed of modeling, pricing and placing the transaction through CatX
Lower transaction costs: Simple structure and legal language result in lower issuance costs
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