PERILS , the Zurich-based firm offering industrywide European catastrophe insurance data, today reported that the total limits placed based on the PERILS industry loss index since the start of 2010 is now over $2.5 billion.
In the first 20 months of being operational, a total of $2.79 billion of PERILS-based capacity was placed in the capital and reinsurance markets. According to PERILS, $1.07 billion of this capacity was in the form of insurance-linked securities or ILS while $1.72 billion was in private deals.
Over half of this capacity used PERILS data to structure bespoke industry loss triggers, a trend that is expected to continue.
Such triggers result in a considerably lower basis risk versus conventional industry loss triggered protection.
“More than half of the limits placed with PERILS-based triggers use the high-resolution data," said Edi Held, head of sales and products at PERILS. "Applying weighting factors by CRESTA zone, country or property lines of business significantly reduces the basis risk for industry-loss-based risk transfer. At the same time, disclosure requirements for the risk ceding party remain at a tolerable level. This makes risk transfer using tailor-made PERILS triggers a highly effective and efficient risk management technique.”