October 20th, 2017

Week’s Top Stories: October 14 -20, 2017

Posted at 10:00 AM ET

Reinsurance Market Poised to Remain Vibrant Following Recent Catastrophe Events: The recent series of catastrophic events - earthquakes in Mexico, Hurricanes Harvey, Irma and Maria - is reminding cedents that reinsurance is one of the most effective ways to protect corporate capital bases; Harvey on its own is likely to be an earnings event that will probably not require an increase of industry capital; the addition of the cumulative effect of the earthquakes in Mexico and Hurricanes Irma and Maria, however, could create a capital event; the earthquakes and hurricanes provide an opportunity to define the viability and effectiveness of the 144A product. We expect that these instruments will demonstrate their effectiveness and serve their intended purpose.

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Flood Insurance: The 2018 Market Opportunity: The U.S. insurance industry is actively seeking new opportunities for growth in a challenging market by identifying untapped customer needs. The potential flood market is over five times the size of the most often mentioned new market, cyber insurance; greater access to flood data and loss results and more reliable exposure modeling are enhancing the flood (re)insurance marketplace; several developments are helping carriers understand and monitor aggregation.

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California Wildfires - October 8-17, 2017: Wildfire activity has rendered especially severe impacts to certain areas of California since October 8, including areas of Napa, Sonoma and Solano Counties. Wildfire activity has also rendered impacts to areas of Orange County east of the Los Angeles Metro area. Rates of extreme fire spread were enabled by especially dry conditions together with offshore gusty winds to burn a total of at least 217,566 acres since October 8. Media reports indicate at least 41 fatalities, making this the deadliest series of fires in California history. At least 5,700 structures have been destroyed and thousands more remain under threat. Containment efforts have made significant progress in the last week, thanks to efforts of at least 10,000 firefighters and reduced winds.

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Guy Carpenter Reports US Insurance Market at a Crossroads but Opportunity Exists: Guy Carpenter today released a study outlining a dynamic insurance industry facing a changing economy and pressure in once-stable lines, but with opportunity for those with management skill and understanding of risk.

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Just Say “Know” to Insurtech: As insurtech offerings proliferate, to gain the advantages promised, companies need to know the opportunities afforded; know their own strengths and capabilities for engagement; and know their clients’ needs and expectations; Insurtech is the evolutionary next step for insurance through the combination of data, analytics and technology in new and innovative ways; capturing information in real time through sensors or mobile devices is the newest process for the collection of data for analytics.

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And, You May Have Missed…

Chart: Source Of Earnings for Guy Carpenter Reinsurance Composite, First Half, 2017: Chart presents source of earnings for the Guy Carpenter Global Reinsurance Composite for first half 2017 compared to first half 2016.

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October 19th, 2017

Little-Used Retirement Option Gets a Big Boost: Part II

Posted at 1:00 AM ET

rains_david-5-2015-sm3mparker-sm3David A. Rains, Managing Director and Healthcare and Life Specialty Leader and Michael R. Parker, Managing Director, Senior Business Development Broker

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In the meantime, this complexity and the difficulty in explaining variable annuities to consumers has heavily slanted sales toward expensive, commission-based channels more comfortable with products that are “sold, not bought.” Yet, as has been the historic trend for other financial products and services, demand for simpler, more transparent annuity products that encourage value shopping will be essential in driving future growth. This should favor easy-to-understand, fee-based product designs that investors buy rather than commission-based products agents must sell.

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October 18th, 2017

Little-Used Retirement Option Gets a Big Boost: Part I

Posted at 1:00 AM ET

rains_david-5-2015-sm2mparker-sm2David A. Rains, Managing Director and Healthcare and Life Specialty Leader and Michael R. Parker, Managing Director, Senior Business Development Broker

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With the erosion of defined benefit pension plans and uncertainty around the future of Social Security, the current workforce must find new ways to responsibly manage their income into and through retirement.

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October 17th, 2017

California Wildfires – October 8-17, 2017 - Update

Posted at 6:52 PM ET

calif-wildfires-10-8-17-smWildfire activity has rendered especially severe impacts to certain areas of California since October 8, including areas of Napa, Sonoma and Solano Counties. Wildfire activity has also rendered impacts to areas of Orange County east of the Los Angeles Metro area. Rates of extreme fire spread were enabled by especially dry conditions together with offshore gusty winds to burn a total of at least 217,566 acres since October 8. Media reports indicate at least 41 fatalities, making this the deadliest series of fires in California history. At least 5,700 structures have been destroyed and thousands more remain under threat. Containment efforts have made significant progress in the last week, thanks to efforts of at least 10,000 firefighters and reduced winds. Cooler conditions with an increase in moisture are expected this week with a chance for some precipitation over Northern California, according to the U.S. National Weather Service (NWS); this should support containment efforts. It will take some time to fully ascertain the full scope and severity of this event, and our first thoughts and concerns are with those lost and directly affected.

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October 17th, 2017

Understanding Systemic Cyber Risk; Insights Through Pandemic Behavior - GC@PCI Commentary

Posted at 11:30 AM ET

platt-jeremybhamory-crop-smshafer-chris-sm1

Jeremy S. Platt, U.S. Cyber Specialty Practice Leader, Guy Carpenter; Bruce Hamory M.D., Chief Medical Officer for Health and Life Sciences at Oliver Wyman Consulting and Christopher Shafer, Assistant Vice President, Guy Carpenter

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  • Jeremy S. Platt is Managing Director and U.S. Cyber Specialty Practice Leader at Guy Carpenter; Bruce Hamory, M.D. is a Partner and Chief Medical Officer for Health and Life Sciences at Oliver Wyman Consulting. They represent operating companies of Marsh & McLennan Companies.

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October 17th, 2017

Integrating Growth and Enterprise Risk Management - GC@PCI Commentary

Posted at 8:30 AM ET

hettinger_cropped-smThomas Hettinger, Managing Director, Strategic Advisory

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  • There are indications that new A.M. Best Stochastic Based BCAR factor assignments may require more capital for companies entering a new line of business than for established writers growing in that line
  • Companies will be under extra pressure to choose growth strategies carefully because of potential capital pressures from A.M. Best and their potential for low returns due to the extended soft positions of many markets
  • With current capital positions evaluated, robust and current market insight is critical to accurately assess potential growth areas

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October 16th, 2017

New Vehicle Matches The Right Capital To Risk – GC@PCI Commentary

Posted at 1:30 PM ET

anger_cory-mngt-bio-largepriebe_david_photo-sm2Cory Anger, Global Head of ILS Origination and Structuring, GC Securities and David Priebe, Vice Chairman

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  • A new Marsh & McLennan vehicle provides unparalleled support in accessing long-term capital markets-based protection
  • A broader and more diverse range of capital sources brings better matching, more efficient solutions customized to the unique risk profile of clients
  • Provides a standardized documentation process and single point of access, in an efficient and cost effective manner

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October 16th, 2017

Interoperability: A Case For Open Source - GC@PCI Commentary

Posted at 11:30 AM ET

peter-hearn-2-smPeter Hearn, President & CEO

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  • Industry-wide call for increased transparency in cat modeling
  • Interoperability facilitates collaboration of multiple data sources
  • Open source models allow insurers to develop own view of risk

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October 16th, 2017

Flood Insurance: The 2018 Market Opportunity - GC@PCI Commentary

Posted at 8:30 AM ET

hayes_j_bio-sm1kulik-john-sm3Jonathan Hayes, Managing Director and John Kulik, Senior Vice President

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  • The U.S. insurance industry is actively seeking new opportunities for growth in a challenging market by identifying untapped customer needs. The potential flood market is over five times the size of the most often mentioned new market, cyber insurance
  • Greater access to flood data and loss results and more reliable exposure modeling are enhancing the flood (re)insurance marketplace
  • Several developments are helping carriers understand and monitor aggregation

Continue reading…

October 16th, 2017

Guy Carpenter Reports US Insurance Market at a Crossroads but Opportunity Exists

Posted at 8:20 AM ET

303405_guy-carpenter_cover-2-sm1Guy Carpenter today released a study outlining a dynamic insurance industry facing a changing economy and pressure in once-stable lines, but with opportunity for those with management skill and understanding of risk.

Continue reading…