63: Hedging the Next Pandemic with Parametric Capital Market Solutions - Webcast recording

During a recent Artemis Live webcast, industry experts argued that utilizing technology will be critical in enabling the reinsurance and alternative capital markets, or ILS sector, to help hedge pandemic risk using parametric solutions.

The event was sponsored by Vesttoo, a specialist in risk modeling and alternative risk transfer for the Life and P&C insurance markets, and which was represented by CEO Yaniv Bertele.

Also present on the panel were James Potter, CEO of Rokstone Underwriting, Luca Tres, Head of Strategic Risk & Capital Life Solutions, EMEA at Guy Carpenter, and David Bearman, CEO of Aventum Group.

As a backdrop to this discussion, recent renewals have seen insurance and reinsurance players scramble to exclude pandemic risks from their books, due to the size and systemic nature of the peril, plus the unintended nature of the cover they have in many cases found themselves on the hook for.

But Bertele argued that more sophisticated utilization of technology could help the capital markets to get a handle on pandemic risk, and “bridge the gap” between the now-familiar territory of catastrophe risk and some of the more complex long-tail risks.

The panel discusses the way parametric triggers could be used to construct pandemic hedges for P&C insurance and reinsurance risk, as well as the potential challenges in transacting in this while a global pandemic is ongoing.