October 26th, 2014

A.M. Best’s New Analytics Will Broaden and Improve P&C Industry Capital Modeling and Benchmarking of Tolerances

Posted at 1:00 AM ET

snyder_jack_100eric-simpson-smallmark-murry-small-1201Jack Snyder, Managing Director, Business Development and Head of the Rating Agency Practice, Strategic Advisory; Eric Simpson, Managing Director in the Rating Agency Practice and Mark Murray, Senior Vice President in the Rating Agency Practice

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A.M. Best’s rating analytics continue to evolve and the pace of change is accelerating as the industry embraces more analytical tools, emerging best practices, and peer benchmarking.

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October 25th, 2014

Hurricane Seasons That Changed The Industry: Landmark 2005 Hurricane Season

Posted at 7:30 AM ET

Guy Carpenter & Company released Part II of the two-part Ten-Year Retrospective of the 2004 and 2005 Atlantic Hurricane Seasons. Part II focuses on the 2005 hurricane season and the cumulative impacts of both the 2004 and 2005 seasons on the (re)insurance industry as well as the changes made in response to these two landmark seasons from both catastrophe model vendors and rating agencies.

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October 24th, 2014

Week’s Top Stories: October 18 — 24, 2014

Posted at 8:00 AM ET

Centralization of Reinsurance Buying: It should come as no surprise that there is a general trend among larger cedents to centralize reinsurance buying decisions and retentions and to bundle homogeneous products. This has become possible with the improvement of available portfolio data. This practice has some obvious advantages for buyers, such as reduced spend, reduced administration, improved control over counter-party credit risks and, possibly, retention of additional profits that would otherwise be ceded to reinsurers.

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Baden-Baden Reinsurance Symposium Assesses Future Impact of Current Market Conditions: Guy Carpenter hosted “The Reinsurance Industry of the Future,” the Reinsurance Symposium held in Baden-Baden, Germany on October 19. A distinguished line-up of industry luminaries expressed their views on whether the current changes impacting the reinsurance sector are permanent and structural in nature, are a tactical response to short-term conditions, or are part of the normal evolutionary process.

Read the article>>

 

Costs of Cyber-Attacks: A cyber-attack can burden companies with substantial costs. For instance, a cyber-incident may result in a business interruption loss as systems are unavailable both internally and externally. Exceptional expenses are incurred and revenues reduced through the loss of business.

Read the article>>

 

Historical Development of Cyber (Re)Insurance: Companies are uncertain of how much coverage to acquire and whether their current policies provide them with protection. One of the roots of the uncertainty stems from the difficulty in quantifying potential losses because of the dearth of historical data for actuaries and underwriters to model cyber-related losses. Furthermore, traditional general liability policies do not always cover cyber risk. In the United States, ISO’s revisions to its general liability policy form consist primarily of a mandatory exclusion of coverage for personal and advertising injury claims arising from the access or disclosure of confidential information.

Read the article>>

 

Capital - Multiple Issues Require Multifaceted Solutions: What drives (re)insurer capital planning? Maybe it is risk appetite, internal dynamic capital modeling or actuarial analysis. Or perhaps it is external pressure from regulators, rating agencies or investors. In reality, it is probably a combination of all of these factors. Faced with conflicting views of what constitutes both the available capital and the assessment of the amount required relative to the risk, optimizing (re)insurer capital adequacy is likely to be a key challenge confronting a company. Rarely will the company be able to fully satisfy all the demands. Developing a management framework to evaluate, analyze and compare these divergent needs is therefore essential to extract the maximum efficiency from (re)insurer corporate capital structure.

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And, You May Have Missed…

GC Videocast - Rendez-Vous Press Briefing 2014, Concluding Remarks (Alex Moczarski): Alex Moczarski, President and CEO, Guy Carpenter and Chairman, Marsh & McLennan Companies International, provides concluding remarks at the Guy Carpenter press briefing at the Monte Carlo Rendez-Vous in this GC Capital Ideas videocast.  He said  “The focus for many in the industry continues to be on the deflationary effect of excess capital. This can lead to negative introspection or just waiting for the ‘big one’ to strike. Such passivity won’t do. We must take the initiative. For a broker, this means constant innovation, anticipation of clients’ needs and delivering the best solutions.

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October 23rd, 2014

Historical Development of Cyber (Re)Insurance

Posted at 1:00 AM ET

Companies are uncertain of how much coverage to acquire and whether their current policies provide them with protection. One of the roots of the uncertainty stems from the difficulty in quantifying potential losses because of the dearth of historical data for actuaries and underwriters to model cyber-related losses. Furthermore, traditional general liability policies do not always cover cyber risk. In the United States, ISO’s revisions to its general liability policy form consist primarily of a mandatory exclusion of coverage for personal and advertising injury claims arising from the access or disclosure of confidential information.

Continue reading…

October 22nd, 2014

Cyber Insurance

Posted at 1:00 AM ET

Cyber insurance has grown out of recognition that cyber-crime and data privacy are among the most concerning risks facing organizations today. With the increasing severity and frequency of cyber-attacks and data breaches worldwide, the demand for cyber-specific insurance is growing. Cyber-related risk to critical infrastructure and the overlap with cyber-terrorism are also issues that have come to the forefront.

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October 21st, 2014

Hurricane Gonzalo — Update

Posted at 10:32 AM ET

gonzalo-10-20-i-200Hurricane Gonzalo approached Bermuda late Friday as a Category 3 hurricane on the Saffir-Simpson scale, before making direct landfall as a strong Category 2. Maximum sustained winds at landfall were 110 mph according to the U.S. National Hurricane Center (NHC). The hurricane caused widespread structural damage and flooding, with downed trees and power lines. However, damage was less severe than expected, with no reported fatalities or major injuries in Bermuda. After clearing Bermuda, Gonzalo made a close approach to Atlantic Canada, bringing very large waves and storm force winds, but with minimal impacts. Gonzalo is now approaching the northern United Kingdom as a powerful post tropical cyclone, where it is expected to render very heavy rain and gusty winds exceeding 60 mph (100 kilometers per hour) over the next 24 hours.

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October 21st, 2014

Costs of Cyber-Attacks

Posted at 1:00 AM ET

A cyber-attack can burden companies with substantial costs. For instance, a cyber-incident may result in a business interruption loss as systems are unavailable both internally and externally. Exceptional expenses are incurred and revenues reduced through the loss of business.

Continue reading…

October 19th, 2014

Baden-Baden Reinsurance Symposium Assesses Future Impact of Current Market Conditions

Posted at 11:30 PM ET

Guy Carpenter hosted “The Reinsurance Industry of the Future,” the Reinsurance Symposium held in Baden-Baden, Germany on October 19. A distinguished line-up of industry luminaries expressed their views on whether the current changes impacting the reinsurance sector are permanent and structural in nature, are a tactical response to short-term conditions, or are part of the normal evolutionary process.

Continue reading…

October 19th, 2014

Capital – Multiple Issues Require Multifaceted Solutions

Posted at 11:30 PM ET

matt-day-headshot-smMatthew Day, Head of Rating Agency Advisory, Strategic Advisory EMEA - Capital Optimization

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What drives (re)insurer capital planning? Maybe it is risk appetite, internal dynamic capital modeling or actuarial analysis. Or perhaps it is external pressure from regulators, rating agencies or investors. In reality, it is probably a combination of all of these factors. Faced with conflicting views of what constitutes both the available capital and the assessment of the amount required relative to the risk, optimizing (re)insurer capital adequacy is likely to be a key challenge confronting a company. Rarely will the company be able to fully satisfy all the demands. Developing a management framework to evaluate, analyze and compare these divergent needs is therefore essential to extract the maximum efficiency from (re)insurer corporate capital structure.

Continue reading…

October 18th, 2014

Centralization of Reinsurance Buying

Posted at 11:30 PM ET

reina_massimo_-photo-175x175Massimo Reina, CEO, Continental Europe & MENA, Guy Carpenter & Company, LLC

Contact

It should come as no surprise that there is a general trend among larger cedents to centralize reinsurance buying decisions and retentions and to bundle homogeneous products. This has become possible with the improvement of available portfolio data. This practice has some obvious advantages for buyers, such as reduced spend, reduced administration, improved control over counter-party credit risks and, possibly, retention of additional profits that would otherwise be ceded to reinsurers.

Continue reading…