1. Resilience and Recovery:
A Reinsurance Perspective
Mike Cohen
Vice President, Government Affairs RenaissanceRe
Director, RenaissanceRe Risk Sciences Foundation

2. 2
Reinsurance: “Insurance for Insurance Companies”
Why do you buy insurance? Why does your insurer buy reinsurance?
Protection for catastrophic loss to your family: Protection for catastrophic losses to an insurer:
Share your risk with others insured
by a primary insurance company –
good diversification
Spread catastrophic risks with others
around the world – very significant
diversification

3. 3
Available Reinsurance Capital Is Growing
USD(billions)
E x h i b i t 1: Global R e i n s u r e r C a p i t a l
7 0 0
6 0 0
5 0 0
4 0 0
3 8 5
T r a d it io n a l Capital
A lt e r n a t iv e C a p i t a l
G lo b a l R e in s ur e r C a p i t a l
4 1 0
3 4 0
6% -17% 18%
4 0 0
18%
470 4 5 5
-3%
11%
5 0 5
7 %
5 4 0
5 7 5
6%
511
3 0 0
2 0 0
1 0 0
368 388
321
378
447 428
466
490
0 28 39 50 64
F Y 2006 F Y 2007 F Y 2008 F Y 2009 F Y 2010 F Y 2011 F Y 2012 F Y 2013 F Y 2 0 1 4
S o u r c e : C o m p a n y r e p o r t s , A o n B e n fi e l d A n a ly t i c s

4. 4
What Natural Hazard Mitigation
Looks Like…
What Climate Change
Adaptation Looks Like…
Spot the Difference…

5. 5
Remove the Clouds Masking The Need to Mitigate
“The number one focus of public policy should be reducing risk to human life.”
- Hurricane Risk Mitigation Leadership Forum ‘Key Principles’

6. 6
U.S. Federal Disaster Relief Has Been
Increasing Dramatically Over Time
Number of U.S. Presidential Disaster Declarations – 1953-
2011

7. 7
Role of Federal Government in Covering Disaster
Losses (proportion of total loss paid by
government)
Sources: E. Michel-Kerjan. Have We Entered an Ever-Growing Cycle on Government Disaster Relief? - Testimony before the U.S. Senate (2013).

8. 8
To Put Things in Perspective
Sources: Kousky and Shabman (2013)

9. 9
Does Disaster Aid Affect Insurance
Purchase Decisions?
It DOES.
First empirical study
ever undertaken
We find that a $1,000
increase in the federal
government’s average
individual assistance
grant decreases
average flood
insurance coverage by
about $6,350.

10. 10
“… salt marshes have value for coastal hazard
mitigation and climate change adaptation”
“Monetary value of U.S.
wetlands from the
standpoint of hurricane
protection alone:
$23.3 billion per year”
Costanza et al, 2008
Evaluate the Benefits of Green Infrastructure

11. 11
Special Challenges for Americans of Lesser Means

12. 12
www.mitigationleadership.com

13. 13
Recent Test of Manufactured Home At IBHS Facility