Industry Loss Warranties (ILW) are a form of insurance-linked security used to finance not recurring very often insurance risks such as hurricanes, tropical storms and earthquakes. The signatures of ILW’s are the use of an industry loss index, that is, the pay-out is dependent on loss suffered by all insurers in connection with a catastrophe event and not just the loss of the insured.
The threshold amount is pre-determined and specified as agreed index in the contract. When triggered, a specified payment of the full contract limit is made to the warranty holder.
We agreed with PERILS AG to be the reporting agency for our new Turkey EQ ILW product.
There are two structure options of contract trigger:
Occurrence ILW- in this case the index will be used to show the amount for a single event industry loss
Aggregate ILW – in this case the index will be used to consolidate a set number of industry loss events
Turker Capital Solutions division has launched a new product offering Turkish earthquake ILW as an effective hedging tool for any company with property exposure in the region.
Introduction of our product:
• First-of-its-kind Binary Industry Loss Warranty product in CEE, SEE and MENA region
• To create a new market for insurers, reinsures and ILS companies
• An effective hedging tool for insurance and reinsurance companies to write Turkey EQ risks
• Brings additional and alternative capacity for Turkey EQ exposure
• A good complementary to the existing reinsurance and retro programs
The Turker Re ILW product has been designed to create a combined industry event loss table (ELT) and associated Occurrence Exceedance Probability (OEP) curve from the Turkey EQ Industry Loss Curves based on PERILS Industry Exposure Data and Loss Index.