Archive for November, 2008



November 28th, 2008

Week’s Top Stories: Nov 22 - 28, 2008

Posted at 1:00 AM ET

Reinsurer Diversification: The Guy Carpenter Model: Instrat®, Guy Carpenter’s quantitative services unit, has developed a reinsurer credit model.

Read the article >>

Swap Out Risk?: The far-reaching effects of the ongoing global financial catastrophe have led investors and catastrophe bond sponsors to question the status quo.

Read the article >>

Book Value Update, Nov 24, 2008: The Guy Carpenter Global Composite’s combined book value is down 18 percent from the beginning of the year, reflecting the continued pressure that carriers face as third quarter results are released.

Read the article >>

Chart Update: Post-Tax Hurricane Exposures: As third quarter results become available, Guy Carpenter will continue to update the Post-Tax Hurricane Exposures chart.

Read the article >>

FHCF Bonding Capacity Update: The Florida Hurricane Catastrophe Fund (FHCF) has announced changes in bonding capacity.

Read the article >>

Most Popular Keyword: reinsurance composite (Guy Carpenter Global Composite)

And, you may have missed …

Reinsurer Diversification: Case Studies: A hypothetical ceding company contracts for the USD200 million casualty cover from a single Aaa rated reinsurer.

Read the article >>

November 27th, 2008

Chart Update: Shareholders’ Funds Development

Posted at 12:55 AM ET

As third quarter results become available, Guy Carpenter will continue to update the Shareholders’ Funds Development chart. With the latest information, the analysis has not changed, indicating that the latest results are consistent with early insights.

To download this chart, right-click on the image, and select “Save Picture As”. If you have any trouble, please e-mail us.

November 26th, 2008

GC Capital Tip: Talk to the Author

Posted at 12:55 AM ET

Do you have a question about one of our articles? If so, contact us. Longer articles on GC Capital Ideas have a “contact” link right at the top. Clicking it will open your e-mail program and provide the appropriate address and subject line, so we can route your inquiry to the best source. If the e-mail software you use is not configured for this, e-mail us at guy_carpenter[at]guycarp.com.

View all GC Capital Tips >>

Submit your idea for a tip >>

November 26th, 2008

Chart Update: Changes to Shareholders’ Funds by Region

Posted at 12:55 AM ET

As third quarter results become available, Guy Carpenter will continue to update the Changes to Shareholders’ Funds by Region chart. With the latest information, the conclusions have not changed, indicating that the latest results are consistent with early insights.

To download this chart, right-click on the image, and select “Save Picture As”. If you have any trouble, please e-mail us.

November 25th, 2008

Swap Out Risk?

Posted at 1:00 AM ET

By GC Securities, a division of MMC Securities Corp.*

The far-reaching effects of the ongoing global financial catastrophe have led investors and catastrophe bond sponsors to question the status quo. While the (re)insurance industry has persevered (particularly relative to the banking industry) it is evaluating the true extent of the risk that it has assumed. For sponsors of catastrophe bonds, this includes the reliability of the total return swap counterparty used to guarantee the collateral backing the risk transfer protection and the catastrophe bonds—as well as the quality of the collateral itself. While four catastrophe bond issuances have been affected by the bankruptcy of its swap provider, there are several areas on which sponsors and investors can focus to bolster the strength of their collateralization.

Continue reading…

November 25th, 2008

Chart Update: Change in Equity Shareholders Funds

Posted at 12:55 AM ET

As third quarter results become available, Guy Carpenter will continue to update the Change in Equity chart. With the latest information, the analysis has not changed, indicating that the latest results are consistent with early insights.

To download this chart, right-click on the image, and select “Save Picture As”. If you have any trouble, please e-mail us.

November 24th, 2008

Book Value Update, Nov 24, 2008

Posted at 12:07 PM ET

The Guy Carpenter Global Composite’s combined book value is down 18 percent from the beginning of the year, reflecting the continued pressure that carriers face as third quarter results are released. Meanwhile, the S&P 500 Banks Index has recovered slightly, with its year-to-date decline hitting 32 percent, compared to last week’s 37 percent.

Continue reading…

November 24th, 2008

Chart Update: Post-Tax Hurricane Exposures

Posted at 12:55 AM ET

As third quarter results become available, Guy Carpenter will continue to update the Post-Tax Hurricane Exposures chart. With the latest information, the analysis has not changed, indicating that the latest results are consistent with early insights.

To download this chart, right-click on the image, and select “Save Picture As”. If you have any trouble, please e-mail us.

November 21st, 2008

Reinsurer Diversification: Concluding Thoughts

Posted at 1:00 AM ET

Christopher Klein, Global Head of Business Intelligence
Contact

The time-honored principle of diversification used in many areas of financial management applies equally well to reinsurance placements. From the ancient days of river commerce in China, where merchants divided their cargo between barges to avoid total loss, diversification has been a key principle of insurance and later reinsurance markets. Given the current financial turmoil in reinsurance markets, there is a legitimate pressure from investors, top management, and the rating agencies for cedents to seek only the highest rated of reinsuring partners. But this worthy objective needs to be balanced with the diversification principle, so that cedents can reduce their probability of zero recovery, as demonstrated in the above analysis.  

This series is limited to consideration of diversification among a panel of reinsurers. Cedents also have options to diversify to other forms of risk transfer, notably risk securitization. In particular, catastrophe bonds as currently structured may reduce the credit risk practically to zero, because they mandate a full collateralization of the limit at risk.

Continue reading…

November 21st, 2008

Week’s Top Stories: Nov 15 - 21, 2008

Posted at 1:00 AM ET

Reinsurer Diversification: The Guy Carpenter Model: Instrat®, Guy Carpenter’s quantitative services unit, has developed a reinsurer credit model.

Read the article >>

Reinsurer Diversification: Roots and Benefits: Cedents are becoming increasingly concerned about the security of their reinsurers, particularly in light of the global financial catastrophe.

Read the article >>

Chart: GC Reinsurance Composite: Earning Sources at Nine Months: With the majority of Guy Carpenter Reinsurance Composite members’ third quarter results now reported, some clear trends have emerged.

Read the article >>

Get Credit for Your ECM with S&P: S&P has released a new framework for determining whether a carrier’s own ECM can receive partial credit in the S&P capital adequacy evaluation.

Read the article >>

Book Value Update, Nov 17, 2008: As publicly traded (re)insurers continue to report their third quarter results, the impact of the ongoing financial catastrophe is becoming more noticeable.

Read the article >>

Most Popular Keyword: asset impairment

And, you may have missed …

2008 Reinsurance Readers’ Awards: Your vote counts. Click here to participate in the 2008 Reinsurance magazine Readers’ Awards survey.

Read the article >>