World Catastrophe Reinsurance Market 2009: Executive Summary: Reinsurance rates increased by 8 percent through the 2009 reinsurance renewals, as measured by the Guy Carpenter World Catastrophe Rate on Line (ROL) Index. Upward pressure came largely from the impact of the 2008 financial catastrophe on reinsurers’ balance sheets, which was exacerbated by the effects of Hurricanes Gustav and Ike. At the January 1, 2010 renewal, reinsurance rates are likely to show little movement, unless a major property catastrophe or financial shock occurs.
A Stable Market Prepares for 2010: At this time last year, the reinsurance market was vastly different. A financial catastrophe and major hurricane occurred and changed the way (re)insurers viewed risk. As both events receded, our industry was left with profound uncertainty. More than being concerned about the direction of reinsurance rates at the January 1, 2009 renewal, carriers worried that a widespread capital shortage was imminent, impairing their abilities to assume and transfer risk. Despite the severity of the financial and natural catastrophes the reinsurance market proceeded in an orderly fashion, with property-catastrophe rates up 10 percent to 15 percent on average and other segments not significantly impacted.
GC Podcast 09 — Inflation (David Lewin): David Lewin, Head of the European Casualty Specialty, discusses the impact of monetary and non-monetary inflation in this new GC Capital Ideas podcast. Click the audio player below to listen to the interview, or download the interview in a file that will work with your iPod.
Guy Carpenter Addresses the Return of Capital to the Reinsurance Industry at Monte Carlo Rendez-Vous: Guy Carpenter & Company, LLC hosted a press briefing at Rendez-Vous in Monte-Carlo on September 5, 2009, focusing on the return of capital to the reinsurance market. Brian Duperreault, President and Chief Executive Officer of Marsh & McLennan Companies, Inc., opened the briefing. Peter Zaffino, President and CEO of Guy Carpenter, then led a panel of Guy Carpenter executives that included Vice Chairman Richard Booth, Henry Keeling, President and CEO of International Operations, Chris Klein, Global Head of Business Intelligence and David Priebe, Chairman of Global Client Development.
Strategy Should Drive Solvency II Compliance: Lately, discussion about the use of capital models in Europe has been driven by Solvency II. A major regulation is on the horizon and is progressively introducing considerable change in the how the insurance industry will manage risk. Important investment has already begun and will continue, as companies have to integrate this new regulatory regime in their management approaches. With Solvency II compliance driving the adoption of economic capital models, though, many (re)insurers could miss an opportunity to secure a competitive advantage. Instead of using compliance as the impetus for capital modeling, strategy should come first.
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Environmental Insurance in Asia — A Profound Opportunity: The environmental liability insurance market in Asia is poised for growth. Limited resources support a large and rapidly growing population, which has resulted in a considerable environmental toll. In China and Japan in particular, the effects of pollution are potent and proliferating. Some legal measures are emerging in an effort to reduce behaviors that cause environmental damage. With the establishment of liability, there is a salient role for (re)insurers in these markets. Despite challenges around data availability and a small existing market for environmental liability insurance, the long-term opportunity is profound, especially for early market entrants.