Reinsurance

Question 1

Define and Explain ‘Reinsurance’

Answer 1

Insurance for insurers companies

Covers their losses to free up an insurers capital, reduce volatility of loses, and write more business

Reinsurers provide capital to the global economy by investing their premium

Question 2

When is the first evidence of reinsurance?

Answer 2

14th century

First professional reinsurer: Colgne Re in 1842

Two largest reinsurer today: Swiss Re in 1863 and Munich Re in 1880

Question 3

What countries are the costliest insurance industrys?

Answer 3

Germany
Belgium
Austria
Luxembourg
China

Question 4

2021 Weather Climate Report: APAC: $ _ B economic loss was only _ % covered

Answer 4

78 B economic loss
9.4 B insured loss
12 %

Question 5

What is the Model of Extreme Weather Risk? (Framework)

Answer 5

Catastrophe Loss Modelling

Risk = f (Hazard, Exposure, Vulnerability) = Financial Loss

Question 6

What is ‘Probability’ ARI?

Answer 6

The probability of exceedance of the given loss level from the catastrophe loss modelling

Question 7

Australia is a…

Answer 7

Multi peril environment

Cyclone, Flood, Hail, Windstorm and Convective Thunderstorms, Bushfire, and Earthquake

Question 8

What is the top 3 insured economic loss events in Australia?

Answer 8

Eastern Sydney Hailstorm (1999): $5.57B
SE Qld and NSW Floods (2022): $5.28B
Cyclone Tracey (1974): $5.04B

Question 9

Where is most of the high exposure felt in Australia?

Answer 9

East coast, QLD
The concentration is the key

Question 10

HARD: What are the main modes (6) of climate variability that drives loss volatility?

Answer 10

ENSO: El Nino Southern Oscillation
IOD: Indian Ocean Dipole
SAM: Southern Annular Mode
MJO: Madden Julian Oscillation (sub seasonal)
STR: Sub-tropical Ridge
PDO: Pacific Decadal Oscillation

Question 11

What ENSO cycle causes more floods?
What ENSO cycle causes more cyclone?
What ENSO cycle causes more bushfires?

Answer 11

La Nina: 76 % proportion of historical losses
La Nina: 66 % proportion of historical losses
El Nino: 44 % proportion of historical losses

Question 12

In terms of the lecture, the rate of Co2 rise was up how much?

Answer 12

10 ppm / century

Question 13

In terms of the lecture, the Co2 level at Cape Grim reached… and increased by…

Answer 13

407 ppm in 2019
2 - 3 ppm / year

Question 14

What are the three related increases on a normal distribution?

Answer 14

Increase in the MEAN
Increase in the VARIANCE
Increase in the MEAN AND VARIANCE

Question 15

How much has Australia warmed since 1900?

Answer 15

1.4 C
Faster than 1.2 C average

Question 16

What is the long term mean loss since 1967?

Answer 16

$1.72B (no inflationary trend)

Question 17

What are the 6 factors of Climate Risk?

Answer 17

Confluence of:
Exposure
Attribution
Hazard
People
Uncertainty
Non-physical

Question 18

A 1 in 50 year heatwave event will occur roughly:

Answer 18

1.5 = 6 years
2.0 = 3 - 4 years
4.0 = nearly every year

Question 19

A 1 in 10 year daily rain event will be roughly:

Answer 19

1.5 = 10% heavier
2.0 = 14% heavier
4.0 = 30% heavier