Insurance Risk Syndication of the Future

EuroDIEM is developing a European platform to industrialize syndication of large and unconventional insurance risks, decreasing the protection gap and doubling the size of the insurance market, combined with a European PPP.

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The Growing Protection Gap

Europe faces a significant and growing protection gap

Across various risk categories, with estimated annual uninsured losses of €200 billion that could be covered by the private market.

Natural Catastrophes

Increasing frequency and severity of natural disasters create significant financial exposure.

Industrial Risks

Complex industrial risks require innovative insurance solutions.

Cyber Risk

Evolving cyber threats pose new challenges for traditional insurance.

Long Term Care

Aging populations create new insurance challenges across Europe.

The Protection Gap Challenge

Which main causes?

Reasons for the protection gap are multiple, involving both supply and demand.

Supply-Side Challenges

  • Limited risk appetite for emerging risks
  • High cost of capital for large and unconventional risks
  • Concentrated capacity, insufficient infrastructures facilitating syndication

Consequences

  • Lower prevention
  • Significant losses and slow recovery
  • Higher government debt, inefficient risk management

Demand-Side Challenges

  • Affordability (high cost of capital, limited prevention, low volumes)
  • Fragmented/lack of clear access
  • Reliance on public support

The Solution

Syndicating Supply, Boosting Demand

Sharing risks via syndication mechanisms (coinsurance or securitization) decreases the cost of capital, igniting the spark that unlocks risk appetite, lowering premium levels, improving affordability, fostering demand.

Risk Syndication

Risk Syndication Made Simple and How to Industrialize it

Rather than finding one carrier matching 100% of the capacity, let’s find more easily multiple carriers to share the capacity thanks to EuroDIEM. Creating a syndication platform will allow undertaking smaller and more numerous risk portions, creating a wider pool at scale, attracting more carriers/investors to access the insurance risk transfer market with a lower cost of capital.

Distributed Risk

Increased Capacity

Lower Capital Requirements

Traditional Approach

Risk Transferor 100%
Single Carrier 100%

EuroDIEM Facilitated Syndication

Risk Transferor 100%
EuroDIEM
Carrier A 25%
Carrier B 20%
Carrier C 15%
Carrier D 20%
Carrier E 10%
Carrier F 10%

Participant Types

Who takes part on the platform

Insurance companies

Insurance companies already underwriting such risks, but also new entrants such as local mutuals and bancassurers now able to test these new waters both on the B2B and B2B+ market with small exposures (%).

Risk Transferors

SMEs, corporates, sponsors, and cedants seeking to transfer risk through the EuroDIEM platform.

Other non-Insurance companies

Other non insurance investors: private equity, pension funds, family offices.

B2B: coinsurance

Matching the customer (SME/corporate) risks with insurance carriers risk appetite.

B2B+: securitization

Matching sponsors/cedants risks with investors risk appetite (of which (re) insurance carriers).

The B2B market is dedicated to commercial risks (corporate and SMEs) and the B2B+ market deals with both commercial and bundled securitized retail individual risks.

EuroDIEM operates at EU+EFTA level, bringing significant geographical capital diversification and risk mutualization.

EU and EFTA member states
€200B
Annual protection gap in Europe
2x
Potential market size increase
30%
Reduction in capital requirements
EU+
Coverage across Europe

Data & Public-Private

EuroDIEM also combines a data sharing module and Public-Private

Data Sharing Module

Data is an essential enabler in the matchmaking capabilities of the platform. It is also a key factor of price reduction boosting demand and prevention as data collection accelerates.

  • Consolidates aggregated and anonymized data
  • Provides valuable insights for risk assessment and pricing
  • Enhances market transparency while protecting confidentiality
  • Data is retrievable at a meaningful granular level by market participants

Public-Private Partnerships

The primary objective is to increase the size of the private insurance market, reducing the burden of national and (supra)national debt, while still keeping PPPs, but at a higher attachment point than today.

  • PPPs comfort the private sector in taking risks
  • Encourage governments in investing in risk-reducing infrastructures
  • Combines private, private & public, and public layers on one platform

The proposed schemes are consistent with the December 2024 ECB/EIOPA joint report proposal, expending though to risks beyond nat cat property risks.

Key Benefits

EuroDIEM delivers significant advantages to all stakeholders

EuroDIEM delivers significant advantages to all stakeholders in the insurance ecosystem.

For Insurance Carriers

  • Reduced capital requirements through risk sharing
  • Access to a wider range of risks for portfolio diversification
  • Enhanced data insights through the data sharing module

For European Economy

  • Reduced protection gap, estimated at €200 billion annually
  • Decreased national and supranational debt burden
  • Support for large industrial innovative projects

For Risk Transferors

  • Lower premiums due to reduced cost of capital
  • Increased access to coverage for previously uninsurable risks
  • Simplified access to a wider range of insurance providers

For Brokers

  • Enhanced ability to place complex and unconventional risks
  • Access to a wider range of carriers and capacity
  • Streamlined processes through technology integration