Follow the Fortunes: The Case for Aggregation Under a CAT XL
March 24, 2022 | ARIAS-U.S. Quarterly
Across global reinsurance markets, reinsurers and insurance companies are negotiating, and in some cases litigating, the extent to which COVID losses (such as business interruption and travel cancellation) are covered by excess-of-loss reinsurance contracts. A key point of contention is whether COVID losses can be aggregated—that is, pooled together into a single reinsurance claim—across jurisdictional lines. For example: Can an insurance company make a reinsurance claim based on all business interruption losses flowing from the March 2020 closure orders issued by New York, New Jersey, and Connecticut (or the UK, France and Spain)? My new article in ARIAS-U.S. Quarterly, co-authored with reinsurance expert Larry Schiffer, makes the case for multi-jurisdictional aggregation based on the follow-the-fortunes doctrine.
Follow the Fortunes: The Case for Aggregation Under a CAT XL (pdf | 295.72 KB)