Climate Change, Part I: A Contested Point You Need to Understand: Climate change is happening. Or is it? It is caused by human action. Or is it? The arguments are bantered back and forth in a crossfire of disagreement over an issue that holds political, social, and emotional significance around the world. For every position there are sympathetic experts willing to present supporting evidence, which, in turn, is inevitably skewered by those holding a contrary view.
Shareholders’ Funds Gain Masks Market Conditions: Reinsurers have attained aggregate shareholders’ funds of USD92.8 billion, as measured by the Guy Carpenter Global Reinsurance Composite. This represents an increase of 4.6 percent from the fourth quarter of 2008. Excluding the effects of securities reclassifications and revaluations — and reserve releases — actual growth is a much lower 1.4 percent for the first quarter of 2009.
Lloyd’s 2008 Results — Resilience in a Tough Market: Lloyd’s of London (”Lloyd’s”) competitive position strengthened in 2008, largely because of effective risk management oversight and relatively conservative investment allocation. The capital structure has proved resilient in the face of the worldwide financial catastrophe and financial strength ratings remain strong and stable. As a result, Lloyd’s is well-positioned to benefit from current market dislocation.
CAT-i Update: Severe Weather in Eastern Australia: Parts of eastern Australia have been declared disaster zones after severe storms forced at least 15,000 people to evacuate their homes. The states of Queensland and New South Wales were battered as powerful winds of up to 130 kmph (80 mph) tore roofs from houses and flood waters cut off entire towns, reports said. The Australian Bureau of Meteorology (BoM) said the powerful winds and heavy rain are forecast to continue into the weekend.
Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of Enterprise Risk Management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.
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Solution Spotlight: Financial Intelligence Team: Guy Carpenter’s Financial Intelligence Team (FIT) scours the insurance and reinsurance marketplace for information that affects how risk-bearers manage risk and capital. FIT uses information from financial markets, rating agencies, regulators and other sources to help carriers optimize the deployment of their capital.