Archive for June, 2009



June 30th, 2009

Top Stories of 2Q2009

Posted at 1:00 PM ET

1. Rates up on Tightening Capacity at U.S. 4/1 Prop-Cat Renewal: Reinsurance rates continued to increase for the U.S. property-catastrophe reinsurance market at the April 1, 2009 renewal, extending the trend that began at the beginning of the year. National programs were up 10 percent to 14 percent on a risk-adjusted basis, with those in the Northeast seeing 6 percent to 8 percent increases. This compares to a reinsurance rate increase of 11 percent on average at the January 1, 2009 renewal.

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2. Cat Bond Update: First Quarter 2009*: A strong first quarter has demonstrated that catastrophe bonds are still important tools for risk managers, treasurers, and CFOs. After five months of silence since the last issuance in mid-August 2008, three bonds closed in the first quarter of 2009 bringing USD575 million in fresh capital and confirmation that these instruments are still attractive investments, despite the ongoing the global financial catastrophe. Investor marketing for a fourth catastrophe bond issuance began in the first quarter but is expected close in the early part of the second quarter. Issuance levels are consistent with the first quarter of 2008, a year that seemed likely to be the second-busiest in the history of the catastrophe bond market until the financial crisis accelerated in the fourth quarter of last year.

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3. Where Are We on Solvency II?: Solvency II will require insurers and reinsurers domiciled in the European Economic Area (EEA) to assess their regulatory capital requirements within a forward-looking risk sensitive framework. Solvency II has reached a decisive point in its development, as the focus moves to how the directive will be implemented in practice and how it will shape the competitive landscape of the insurance industry. From a quantitative perspective, the results of the Quantitative Impact Study 4 (QIS 4) were published by the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) in November 2008. From a political perspective, the group support concept was abandoned to avoid further jeopardizing the targeted implementation by 2012.

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June 30th, 2009

Freight Train Explosion, Italy

Posted at 9:26 AM ET

small-train-explosionAn Italian freight train carrying liquefied petroleum gas derailed just before midnight local time (23:00 BST), causing an explosion that engulfed several houses in the Tuscan coastal city of Viareggio, located to the northwest of Pisa in northern Italy. The freight train was en route from the port of La Spezia to its final destination in Pisa.

According to sources, 15 people have so far been killed by the explosion, with a further 50 injured. Italian officials said that 35 of those injured have been hospitalized with severe burns.

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June 30th, 2009

Yemenia Plane Crash, Indian Ocean

Posted at 9:17 AM ET

small-yemenia-plane-crashA Yemenia plane carrying 153 passengers and crew on an international flight crashed into the Indian Ocean as it approached its destination of the Comoros Islands in bad weather, according to airline officials. Reports said the aircraft was carrying 142 passengers and eleven crew members. The Airbus 310-300, operated by Yemenia, was flying the final leg of a flight taking passengers from Paris and Marseille to Comoros via Sanaa in Yemen. The plane was flying to Moroni, capital of Grande Comore, the main island of the archipelago, and reports said the jet went down around 10 kilometers (6 miles) off Comoros. The Paris airports authority said 66 French nationals were on board the plane. Most of the passengers aboard the Airbus A310 were believed to be Comoros residents returning from Paris, reports said.

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June 30th, 2009

Global Terror Update: Belgium

Posted at 1:00 AM ET

global_cover141x141Belgium’s Terrorism Reinsurance & Insurance Pool (TRIP) was created on February 1, 2008. TRIP, a non-profit organization, distributes the loss costs of terrorism cover among all participants according to their market share, and it acts also as a reinsurance buyer.

TRIP guarantees the cover of terrorism claims during a calendar year up to a global annual limit of EUR1 billion USD1.4 billion. This amount will be adjusted every January based on the Consumer Price Index (relative to December 2005). The Belgian government can change the amount based on several factors, including economic developments, the financial capitalization of the (re)insurers, and the development of terror risk. Carriers are not required to participate in the pool, but participant liability is capped at EUR1 billion, while non-participant liability is not capped at all. Membership in TRIP represents more than 90 percent of the market.

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June 29th, 2009

Top 10 Stories: June 2009

Posted at 1:00 PM ET

1. Florida Renewal up 15%, Follows the Global Trend: Property-catastrophe reinsurance rates increased by 15 percent at the Florida-centric June 1, 2009 renewal — compared to a 15 percent decline a year ago. Capacity was more limited than in recent years — however, still adequate to complete renewals. Though the ultimate result was higher than the 10 percent to 14 percent change for U.S. national reinsurers at April 1, 2009, the intricacies of the Florida market render it directionally consistent with the overall rate trend for this year. Constraints on capital have pushed risk-transfer pricing higher, but shortages were not so severe that rates spiked as they did in 2006.

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2. Global Reinsurance Composite Net Income, Combined Ratio Improve: The Guy Carpenter Global Reinsurance Composite’s net loss narrowed from the first quarter of 2008 to that of 2009. This year, the group showed an aggregate net loss of USD127 million — an improvement of 86 percent. Declines in unrealized losses and better non-life underwriting results are the primary drivers.

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3. Global Terror Update: 2009 Global Terror Update summarizes terror insurance market developments in 34 countries across six continents. According to the briefing, developments on a country-by-country basis are being shaped largely by events, including new or evolving threats and local developments in the insurance and reinsurance markets. The update also addresses the impact of terror insurance on the aviation market and looks at recent developments in terror modeling.

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June 29th, 2009

Global Terror Update: Austria

Posted at 1:00 AM ET

global_cover141x141Prior to September 11, 2001, terrorism risks were not considered to be a threat to Austria’s population or industries and tended not to be excluded in primary insurance policies. On October 1, 2002, Austrian insurers in the Verband der Versicherungunternehmanen Oesterreichs (VVO, the Austrian insurance association) created Oesterreichischer Versicherungspool zur Deckung von Terrorisiken (The Austrian Terrorpool) in a response to the changing perception of risk following the terrorist events in the United States. The Austrian Terrorpool was created as a mixed co-insurance and reinsurance pool, with the primary object of offering affordable property cover against risks arising from an insured peril triggered by terrorism. The Terrorpool acts as reinsurance, with the direct writing insurer issuing a separate terrorism policy and then ceding the business to the Terrorpool. While terrorism cover and Terrorpool membership are optional, 99 percent of the Austrian Insurance Association (VVO) members belong to the pool. Members’ share of the pool is prorated to their market share in property insurance.

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June 26th, 2009

Flooding in Central Europe

Posted at 12:37 PM ET

small-flooding-in-central-europeHeavy rainfall across the Central European region from June 22, 2009 to June 25, 2009 has caused severe flooding in several countries, including the Czech Republic, Austria, Poland, and Germany. The heavy rainfall is also reported to have prompted flood alerts for the Danube in the Slovak Republic and Hungary and has caused some flooding in Romania.

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June 26th, 2009

Week’s Top Stories: June 20 - 26, 2009

Posted at 1:00 AM ET

Global Terror Update: The 2009 Global Terror Update summarizes terror insurance market developments in 34 countries across six continents. According to the briefing, developments on a country-by-country basis are being shaped largely by events, including new or evolving threats and local developments in the insurance and reinsurance markets. The update also addresses the impact of terror insurance on the aviation market and looks at recent developments in terror modeling.

Read the article >>

Global Reinsurance Composite Net Income, Combined Ratio Improve: The Guy Carpenter Global Reinsurance Composite’s net loss narrowed from the first quarter of 2008 to that of 2009. This year, the group showed an aggregate net loss of USD127 million — an improvement of 86 percent. Declines in unrealized losses and better non-life underwriting results are the primary drivers.

Read the article >>

Florida Renewal up 15%, Follows the Global Trend: Property-catastrophe reinsurance rates increased by 15 percent at the Florida-centric June 1, 2009 renewal — compared to a 15 percent decline a year ago. Capacity was more limited than in recent years — however, still adequate to complete renewals. Though the ultimate result was higher than the 10 percent to 14 percent change for U.S. national reinsurers at April 1, 2009, the intricacies of the Florida market render it directionally consistent with the overall rate trend for this year.

Read the article >>

Continue reading…

June 25th, 2009

Global Terror Update: Canada

Posted at 1:00 AM ET

global_cover141x141Terror risk management has remained relatively unchanged since September 11, 2001. Under current Canadian law terror including fire following may be excluded, though fire following exclusions have not been adopted for personal lines. The fire following aspect is being reviewed in a number of provincial jurisdictions. With respect to commercial property, terror can be excluded and there is a broader view that the practice of excluding fire following is acceptable. Continue reading…

June 25th, 2009

Continental European Legislative and Judicial Trends: Past Articles

Posted at 1:00 AM ET

Introduction >>
(Tuesday, June 9, 2009)

Belgium/European Parliament >>
(Wednesday, June 10, 2009)

France >>
(Thursday, June 11, 2009)

Germany >>
(Tuesday, June 16, 2009)

Netherlands/European Parliament >>
(Wednesday, June 17, 2009)

Spain >>
(Thursday, June 18, 2009)

Sweden >>
(Tuesday, June 22, 2009)

Switzerland >>
(Wednesday, June 23, 2009)

Conclusion >>
(Thursday, June 24, 2009)

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