Nevertheless, we see differences in how practitioners interpret peril dependency: some treat perils as fully dependent while others treat them as fully independent. These different approaches can produce materially different capital and reinstatement outcomes. For example, one cedent may conclude that their programme provides sufficient reinstatements, while another, using a different dependency assumption, may reach the opposite conclusion.
This article summarises the key Nat-Cat risk changes for the Netherlands as part of the Solvency II 2020 review, their impact on the required capital (SCRnatCAT), and practical implications for purchasing reinstatements.
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