Guy Carpenter Report Finds Power of Remedy Laws in Europe Expanding Insurers’ Fields of Exposure: Guy Carpenter & Company, LLC today published the latest installment in its series of updates on key legislative and legal developments impacting insurers and reinsurers in Continental Europe. The briefing, which can be downloaded below, addresses the implications of the ongoing global financial crisis, highlighting the types of legal liability and litigation that may be expected in Continental Europe.
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.
H1N1 Cases up, Lethality Down through June 2009: The lethality of the H1N1 swine flu outbreak has declined over the past month. As of May 6, 2009, H1N1 had a lethality rate of 1.98 percent. This has fallen to 0.61 percent as of June 3, 2009.
Continental European Legislative and Judicial Trends: Introduction: Recent Legislative and Judicial Trends in Continental Europe Affecting the Casualty Insurance Industry is the latest installment in Guy Carpenter & Company Ltd’s (”Guy Carpenter’s”) legislative update series, designed to provide our international clients and markets with a concise overview of key trends in the Continental European legal environment These issues have had an impact on insurers and reinsurers or are expected to have an effect in the near future.
North Atlantic Tropical Cyclone Season Forecast 2009: The Colorado State University tropical storm research team has further lowered its hurricane development forecast for the 2009 North Atlantic season, and now foresees “below-average activity.” Researchers Philip Klotzbach and William Gray decreased their forecast from their April prediction and now expect 11 named tropical storms to develop in the North Atlantic basin between June 1, 2009 and November 30, 2009.
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FIT Intelligence Update: The Financial Accounting Standards Board (FASB) continues to work on the Insurance Contracts project. The FASB has indicated that it will not support current exit value for reserving, but is favoring fulfillment value instead. Fulfillment value represents the amount that will actually be paid as claims become due (essentially the present value of expected losses plus a risk margin). Measurement of fulfillment value would use expected cash flows (i.e., a probability-weighted average of possible cash flow results) rather than a “best estimate.”
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