Hannover Re doubles commitment to Natural Disaster Fund

By Henry Gale, Rebecca Delaney

June 27 - (The Insurer) - Hannover Re is set to double the capacity it provides to the Natural Disaster Fund (NDF), a government-backed parametric risk capacity pool, to $100 million.

Henning Ludolphs, managing director for capital markets and retrocession, made the announcement on Friday at the NDF event during London Climate Action Week.

The reinsurer currently provides up to $50 million of capacity in a risk-sharing arrangement with the NDF, which is managed by Global Parametrics, part of CelsiusPro Group.

The fund was launched in 2018 with capital committed by the UK and German governments, with a focus on backing parametric risk transfer arrangements in the Global South.

The NDF wrote a total of $94 million in limit in 2024, including through its risk-sharing arrangement with Hannover Re, Parametric Insurer first reported earlier on Friday. Its 2024 transactions covered 36.3 million poor and vulnerable beneficiaries.

Ludolphs said Hannover Re was a “long-term believer” in the NDF.

The additional capacity “increases the leverage from public to private money”, he added. “Instead of 50/50 before, now it is more 30/70.”

CelsiusPro's head of climate resilience solutions Kay Tuschen said in December that the paid-in capital sitting in the NDF was 50/50 matched by Hannover Re.