threat woke up live cat market

Severe tropical cyclone Debbie struck northern Queensland in recent hours, with a landfall featuring 260kph wind gusts, storm, surge and torrential rain. A catastrophe has been declared for the region, but in the hours prior to landfall re/insurers were preparing for the impact and sources suggest the live-cat market woke up.To get more news about uplive recharge, you can visit topuplive.com official website.

Cyclone Debbie satellite image via USA TodayThe Insurance Council of Australia (ICA) highlighted the potential for cyclone Debbie to cause an insurance and reinsurance industry loss in the billions of AU dollars.

The ICA noted that Cat 5 Cyclone Yasi, which struck the region in February 2011 in a much less populated area still caused insured losses of $1.4 billion. Since 2006, insurance and reinsurance firms have paid out more than $3.6 billion of cyclone-related claims in Queensland, and more than $3.2 billion due to flooding in the region.

Cyclone Debbie made landfall between Bowen and Airlie Beach with wind gusts as high as 260kph (160mph). The cyclone threatens rainfall amounts of up to 500mm along its path as it moves inland, with the potential for localised inundation and flooding and impacts may be felt up to 100km on shore.

A storm surge is also expected to have cause losses, with some forecasts suggesting a surge of up to 2 metres or higher and the area Debbie came ashore home to many high-value yachting marina’s, as well as high-value coastal homes.

At this time cyclone Debbie remains a Category 3 storm and is beginning to move inland. The cyclone’s winds have declined to gusts of up to 165kph as intensity decreases with land interaction, but extremely heavy rainfall has been reported across the region.

As cyclone Debbie approached yesterday it has been reported to Artemis that the so-called “live cat” market woke up and enquiries were made for last-minute protection.

Sources in the insurance-linked securities (ILS) and reinsurance broking community explained to Artemis that interest in livecat trading only really emerged yesterday, with some enquiries about industry-loss trigger protection from parties looking to acquire a last-minute hedge to protect their exposed book.

It seems more likely that any interest would have been on the retrocessional side, as most primary insurers have ample reinsurance protection to absorb a storm of Debbie’s side. Reinsurance players meanwhile will be expecting the primary market to call on their coverage and so it would make sense if a reinsurer was looking for a last-minute slice of additional retro cover.

While we’re told that there was some interest in getting prices for live cat capacity, it’s not clear whether any deals were actually transacted at this time. It does seem a little unlikely given the uncertainty surrounding the eventual loss from cyclone Debbie, due to the region the storm hit and the fact insurable interest can be quite broadly dispersed into localised hotspots there.