This document summarizes various sovereign and public-private natural catastrophe (NatCat) risk transfer schemes from around the world. It then shows that the global uninsured losses from NatCat events in 2017 were around 69% of overall losses, demonstrating a large protection gap. Finally, it outlines Munich Re's vision to offer the right risk transfer solution for clients' needs, whether through traditional reinsurance, parametric insurance, or catastrophe bonds, depending on the perils and terms required.

1. DRR Financing Workshop
Insurance Markets,
Private Sector Opportunities
Istanbul, 4th October 2018
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2. NatCat-Insurances
Examples of sovereign and public-private NatCat risk transfer schemes
African nations
African Risk Capacity (ARC)
Algeria
Catastrophe Insurance Pool
Caribbean
Catastrophe Risk Insurance
Facility (CCRIF)
New Zealand
Earthquake Commission (EQC)
Norway
Norsk Naturskadepool (NNPP)
Turkey
Catastrophe Insurance
Pool (TCIP)
United Kingdom
Flood Re
St. Lucia, Grenada, Jamaica
Livelihood Protection Policy (LPP)
Iceland
Icelandic Catastrophe
Insurance (ICI)
Pacific Islands
Pacific Catastrophe Risk
Insurance Company (PCRIC)
Philippines
Sovereign Parametric Insurance
(PSPI)
United States
National Flood Insurance
Program (NFIP)
Mexico
Fondo Nacional de Desastres
Naturales (FONDEN)
Switzerland
Swiss Natural Perils Pool (ES-Pool)
Intercantonal Union of Reinsurance (IRV)
Romania
Programul Roman de Asigurare la
Catastrofe (PAID)
Taiwan
Residential Earthquake Insurance Pool
(TREIF)
Indonesian
Catastrophe Reinsurance Pool
(Maipark)
2
StormEQFlood Drought

3. 3
NatCat-Insurances
a dramatic risk protection gap: insured vs. uninsured NatCat losses in 2017
continent
overall losses
US$ bn
insured losses
US$ bn
North America 279 125
South America 4.4 0.54
Europe 16 5
Africa 2.3 0.35
Asia 32 2.9
Australia & Oceania 4 2.3
31%
9%
15%
58%
12%
inflation-adjusted via
country-specific
consumer price index
and consideration of
exchange-rate
fluctuations between
local currency and US$
Uninsured loss share
Insured loss share
losses per continent
as percentage of
overall losses
© 2018 Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE – As of June 2018
http://natcatservice.munichre.com/
Source: Munich Re, NatCatSERVICE, 2018
44%
56%
88%
85%
91%
42%
69%

4. Challenge – identifying the value proposition of risk transfer
4
Timing
Allocation
Ex ante Financing:
▪ Interest payments
Ex-Post Financing:
▪ Volatility in timing & amount
▪ Interest payments
Constraint
Risk transfer can disburse funds in
case of insufficient funds for an
emergency situation
Risk transfer can disburse funds
more rapidly than other sources of
funding
Risk transfer can free up capital for
prevention, preparedness &
resilience building activities
Reserves/Budget Reallocation
▪ Opportunity Costs
AlternativesEconomic Effect
The risk transfer mechanism must
address a constraint to add value
The risk transfer mechanism must be
cost efficient
The risk transfer mechanism must
contribute to longer term cost reduction
Budgetary Support
Crisis Mitigation
Resilience Building
Volume

5. Our Vision: Offer the right solution for your needs
Cat Bond vs traditional parametric insurance
5
Re/InsuranceCat Bond
Depending on return period and spread
Large Capacities available
Parametric Cover
Capacity Qualifies also for smaller capacities
Strongly dependent on underlying
portfolio
Every peril a vendor model is availablePerils
Every peril you can create a trigger for:
Earthquake, wind, flood, rainfall, ….
For natural catastrophes almost all
perils
3-4 yrsTerm 1 to 5 years 1-3 years
• No reinstatement
• Independent capacity
Additional
Aspects
• Quick liquidity
• Decent trigger to be developed
• Claims settlement
▪ Munich Re has a long standing experience with these covers all over the world
▪ We have the capability to cover also non nat cat perils, e.g. cyber and pandemic risks
▪ Let’s get in touch and discuss what solution works best for you

6. Your Contacts
Disclaimer
Munich Re Group is not a legal, tax or accounting advisor and makes no representations as to the accuracy of any data or information gathered or prepared by Munich Re Group or advisors hereunder. Your
company should therefore consult with its own tax, legal or other advisors and make its own independent analysis and investigation of the proposed transaction, as well as the financial, legal, accounting and tax
consequences thereof, the creditworthiness of the parties involved and all other matters to the transaction prior to its own independent decision whether or not to enter into any agreements in connection with the
transaction. This analysis and proposal contains indicative terms for discussion purposes only. Munich Re Group gives no assurance that any transaction will be consummated on the basis of these indicative
terms and no specific issuer is obliged to issue any security or instrument on such indicative terms. This presentation does not constitute an offer to sell or any solicitation of any offer to buy or sell any security or
instrument or to enter into any transaction on such indicative terms. The data and analysis does not assure that securities can be issued at certain terms and conditions. All terms and conditions are subject to a
mutually agreed engagement letter. This presentation is not intended to provide the sole basis for any evaluation by you of a transaction, security or instrument and you agree that the merits or suitability of any
such transaction, security or instrument to your particular situation will be independently determined by you including consideration of the legal, tax accounting, regulatory, financial and other related aspects
thereof. In particular, Munich Re Group owes no duty to you to exercise any judgement on your behalf as to the merits or suitability of any transaction, security or instrument. The information contained herein is
provided to you on a strictly confidential basis and you agree that it may not be copied, reproduced or otherwise distributed by you (other than to your professional advisors) without prior written consent.
Michael Roth
Senior Consultant
+49 89 3891 9925
mroth@munichre.com
Natalie Kraus
Senior Origination Manager
+49 89 3891 9497
nkraus@munichre.com
Rebecca Cichon
Senior Origination Manager
+41 58 22 66 415
rcichon@newre.com