Resolute Global Partners (Resolute), an investment advisory firm, has launched a new type of reinsurance contract focused on US natural catastrophes.
The contract, named Footprint, has been created in collaboration with reinsurer Gallagher Re and catastrophe modelling firm Karen Clark & Company (KCC).
Footprint can be used on any type of catastrophic event, from wildfires to earthquakes. However, the first Footprint transaction is focused on severe convective storms — the most common and damaging natural catastrophes in the US.
Severe convective storms have been costly for insurance companies. As a result, insurancers are demanding more coverage whilst reinsurers are limiting supply, says Resolute.
The transaction was enabled by KCC’s catastrophe modelling technology.
Resolute Global Partners says Footprint’s structure solves long-standing problems in the reinsurance industry including trapped capital, extended settlement times, and economic inflation. It will address these problems by offering rapid claim settlement (within 30 days of an event); automatic commutation (within 30 days of contract maturity) and fixed exposure risk.
Commenting on the launch, Tom Libassi, co-founder and managing partner of Resolute Global, says: “Footprint gives investors the opportunity to capitalise on the current attractive rate market.”
