IF the topic of climate change is du jour, so will the topic of Nat Cat coverage be, and with it the slew of issues that accompany Nat Cat insurance, especially in the Philippines. My previous columns touched on the need to adjust the rates of Nat Cat protection to make it sustainable in the face of the ever-hardening reinsurance market and the fact that the local rates have not been reviewed in two decades. What is the point of having a solution that will not be sustainable and will be pulled out after a streak of losses? We also talked about the launch of initiatives that will provide more local Nat Cat capacity and maximize the efficiencies of a pooling arrangement to obtain better terms from the international reinsurance market. Another topic talked about is the launching of a new product especially designed for the underserved portion of the populace who are disproportionately exposed to Nat Cat events and are prey to their dire results.
I am not exactly sure what is keeping us from finalizing these initiatives as well as reviewing the current pricing of Nat Cat coverage. There are some intricacies that need the regulators' nod as the initial steps depend on it; hopefully they will get to see the forest for what it is and not just the trees. In the end, it is the insuring public that will benefit from having access to the appropriate coverage provided by a sustainable industry that will be there when the rubber hits the road.
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