There are two new strategies being considered for catastrophe risk transfers. First, H.R. 1101, recently introduced in the House of Representatives, provides for a pre-funded public-private cat risk insurance “backstop” through privately funded reinsurance through state approved plans. The bill includes requirements for reinsurance coverages to be provided by the program. The goals of this program include the stabilization of the cat risk reinsurance market, the expansion of market capacity and the reduction of the dependence on the federal government for funding for responding to disasters.

Second, five Pacific island nations, Marshall Islands, Samoa, Solomon Islands, Tonga and Vanuatu have become members of the Pacific Catastrophe Risk Insurance Pilot. Sponsored by the World Bank, with funding from Japan, the two year pilot program features cat risk modeling by AIR and parametric trigger coverage from four insurance companies, Swiss Re, Mitsui Sumitomo Insurance, Sompo Japan and Tokio Marine Nichido. The objective of the program appears to be to assess whether catastrophe insurance for hurricane, earthquake and tsunami risks might be workable feasible to provide immediate post-event liquidity to member countries. Although details are not presently available, this pilot may envision a program similar to that of the Caribbean Catastrophe Risk Insurance Facility.