Chris McKeown, CEO of Global Analytical and Specialty Practices
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Innovation requires a dedication to research, creativity, resources and foresight. Above all, however, it takes courage to accept the risks — to strive for success rather than cowering in fear of failure. In fact, the best companies learn from occasional mistakes. Learning from failure during the development stages of innovation strengthens a company’s capabilities. It creates an understanding of the issue at hand farther reaching and more in depth than that of the competitors which attach to the idea after it has been accepted as a standard. This understanding fosters a more effective use of that innovation as well as a platform from which to generate new ideas with the practical experience of what works and what does not.

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Rates Retreat as Capital Rebounds: Global Reinsurance Renewals at January 1, 2010: Reinsurance rates for most lines of business decreased at the January 1, 2010 renewal. The Guy Carpenter World Catastrophe Rate on Line (ROL) Index decreased by 6 percent in response to a swift and substantial recovery in the capitalization of the reinsurance sector. The combination of the rally in investment markets, much reduced catastrophe loss activity and recessionary effects on demand resulted in an excess of supply and increased competition. This was reflected in a slow renewal in which many contracts closed very late in the season as buyers sought to gain maximum advantage. The overall movements in pricing have also occurred against a complicated background of exposure adjustments, model revisions, program changes and other market noise.

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Update: Earthquake In Haiti: A powerful earthquake hit Haiti at 21:53 UTC on 12 January (16:53 local time), causing massive destruction across the impoverished Caribbean nation with tens of thousands of people feared dead. The earthquake, measuring 7.0 Mw, was located 15 miles (25 kilometres) west-southwest of Port-au-Prince and 80 miles (130 kilometres) east of Les Cayes, according to the US Geological Survey (USGS). The USGS added that the quake was centred about 8.1 miles (13 kilometres) underground and was felt in the Dominican Republic and eastern Cuba. It was the largest earthquake to hit Haiti for 200 years, according to the USGS. At least 33 aftershocks have hit the region since the main earthquake, the most powerful at 5.7 Mw.

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(Re)Insurance Innovation: Committing to the Leading Edge, Part I: Overview: The threats to which (re)insurers’ capital is exposed seem to multiply with alarming regularity. Today, the industry is contending with risks that were barely imaginable (at best) 20 years ago. In an age when carriers must respond to casualty catastrophes, the possible effects of climate change and financial market calamity - perhaps all on the same earnings call - it’s natural to wonder if the right tools and techniques for the job are available. Risk and capital management have only grown in complexity, a trajectory that is quite likely to continue - and probably accelerate.

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(Re)Insurance Innovation: Committing to the Leading Edge, Part II: The Challenge of Innovation: Innovation can be a source of competitive advantage. A (re)insurer - or service provider (e.g., a reinsurance intermediary) - devises a solution to a particular challenge that the industry faces. It results in improved risk or capital management, for example, leading to enhanced margins, the optimization of capital deployment or expense management. Since the innovator - or early adopter of a service provider’s new idea - has access first, it realizes the benefit ahead of competitors that wait for the trend to crystallize.

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2009 Catastrophe Update: Global Insured Losses in 2009: 2009 has seen an impressive recovery from last year’s financial crisis and the uncertainty caused by losses from Hurricane Gustav and Hurricane Ike. This recovery has been driven by the easing of financial markets and low catastrophe activity. A very quiet hurricane season, coupled with relatively low losses for other weather-related events, meant insured losses reached USD24 billion in 2009(1), the lowest figure since 2006 and a significant fall from USD52.5 billion(2) in 2008.

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2009 Catastrophe Update: Outlook for 2010: Predictions that the El Niño phenomenon is likely to persist through the northern hemisphere winter and into spring could have a significant impact on natural hazards worldwide next year. El Niño events have historically produced floods and drought in the more impoverished regions of the world such as southern Africa and parts of South America. Prolonged dry periods may occur in Southeast Asia, Southern Africa and Northern Australia during an El Niño event, while heavy rainfall and flooding have hit Peru and Ecuador in the past. In the United States, El Niño’s potential impact includes above-average precipitation in the south, with below-average rainfall in the Pacific Northwest and the Ohio and Tennessee Valleys.

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Chris McKeown, CEO of Global Analytical and Specialty Practices
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Innovation must be continual, because of the lifecycle that governs it. If you’re not innovating (or adopting) now, you’re falling behind. The advantages of one innovative solution are quickly outpaced when another is developed or that same solution is adapted to new situations; and if the originator is not doing the work to make those leaps, the reputation of innovation can be quickly lost.

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A powerful earthquake hit Haiti at 21:53 UTC on 12 January (16:53 local time), causing massive destruction across the impoverished Caribbean nation with tens of thousands of people feared dead. The earthquake, measuring 7.0 Mw, was located 15 miles (25 kilometres) west-southwest of Port-au-Prince and 80 miles (130 kilometres) east of Les Cayes, according to the US Geological Survey (USGS). The USGS added that the quake was centred about 8.1 miles (13 kilometres) underground and was felt in the Dominican Republic and eastern Cuba. It was the largest earthquake to hit Haiti for 200 years, according to the USGS. At least 33 aftershocks have hit the region since the main earthquake, the most powerful at 5.7 Mw.

Continue reading…

A powerful earthquake that hit Haiti at 21:53 UTC on 12 January (16:53 local time) has caused massive destruction across the poor Caribbean country and is feared to have killed hundreds or thousands of people. The earthquake, measuring 7.0 Mw, was located 10 miles (15 kilometres) southwest of Port-au-Prince and 90 miles (140 kilometres) east of Les Cayes, according to the US Geological Survey (USGS). The USGS added that the quake was centred about 6.2 miles (10 kilometres) underground and was felt in the Dominican Republic and eastern Cuba. It was the largest earthquake to hit Haiti for 200 years, according to the USGS. At least 33 aftershocks have hit the region since the main earthquake, the most powerful at 5.7 Mw.

Continue reading…

Chris McKeown, CEO of Global Analytical and Specialty Practices
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Those who invest in and prioritize research and development — and introduce new tools and ideas — benefit from more than just the prestige of being first. Early movers define the standard to which others will have to adapt later. They shape the development of innovation, and thus its evolution, as it moves from a radically new idea to an accepted marketplace practice. In possessing this control, they hold the upper hand over their competitors, which become weighted with the burdens of the catch-up clamor.

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A powerful earthquake struck off the coast of northern California at 0:27 UTC on 10 January (04:27 on 9 January local time), cutting power to towns in the region and causing minor damage to homes and business. The earthquake, measuring 6.5 Mw, was located 27 miles (43 kilometres) west of Ferndale and 33 miles (53 kilometres) west-southwest of Eureka, according to the US Geological Survey (USGS). The USGS added that the quake was centred about 13.5 miles (21.7 kilometres) underground and was felt as far north as central Oregon, as far south as Santa Cruz and as far east as Reno. It was the largest earthquake to hit northern California since June 2005, according to the USGS. At least 14 aftershocks have hit the region since the main earthquake, the most powerful at 4.4Mw. There have been no reports of serious injuries and damage is reported to be minor but widespread.

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Chris McKeown, CEO of Global Analytical and Specialty Practices
Contact

Innovation can be a source of competitive advantage. A (re)insurer — or service provider (e.g., a reinsurance intermediary) — devises a solution to a particular challenge that the industry faces. It results in improved risk or capital management, for example, leading to enhanced margins, the optimization of capital deployment or expense management. Since the innovator — or early adopter of a service provider’s new idea — has access first, it realizes the benefit ahead of competitors that wait for the trend to crystallize.

Continue reading…

Chris McKeown, CEO of Global Analytical and Specialty Practices                                                                                    Contact      

The threats to which (re)insurers’ capital is exposed seem to multiply with alarming regularity. Today, the industry is contending with risks that were barely imaginable (at best) 20 years ago. In an age when carriers must respond to casualty catastrophes, the possible effects of climate change and financial market calamity - perhaps all on the same earnings call - it’s natural to wonder if the right tools and techniques for the job are available. Risk and capital management have only grown in complexity, a trajectory that is quite likely to continue - and probably accelerate.

Continue reading…

Rates Retreat as Capital Rebounds:  Global Reinsurance Renewals at January 1, 2010:  Reinsurance rates for most lines of business decreased at the January 1, 2010 renewal. The Guy Carpenter World Catastrophe Rate on Line (ROL) Index decreased by 6 percent in response to a swift and substantial recovery in the capitalization of the reinsurance sector. The combination of the rally in investment markets, much reduced catastrophe loss activity and recessionary effects on demand resulted in an excess of supply and increased competition. This was reflected in a slow renewal in which many contracts closed very late in the season as buyers sought to gain maximum advantage. The overall movements in pricing have also occurred against a complicated background of exposure adjustments, model revisions, program changes and other market noise.

Read the article >>

 
2009 Catastrophe Update: Global Insured Losses in 2009:  2009 has seen an impressive recovery from last year’s financial crisis and the uncertainty caused by losses from Hurricane Gustav and Hurricane Ike. This recovery has been driven by the easing of financial markets and low catastrophe activity. A very quiet hurricane season, coupled with relatively low losses for other weather-related events, meant insured losses reached USD24 billion in 2009, the lowest figure since 2006 and a significant fall from USD52.5 billion in 2008.

Read the article >>

 
2009 Catastrophe Update: Outlook for 2010:  Predictions that the El Niño phenomenon is likely to persist through the northern hemisphere winter and into spring could have a significant impact on natural hazards worldwide next year. El Niño events have historically produced floods and drought in the more impoverished regions of the world such as southern Africa and parts of South America. Prolonged dry periods may occur in Southeast Asia, Southern Africa and Northern Australia during an El Niño event, while heavy rainfall and flooding have hit Peru and Ecuador in the past. In the United States, El Niño’s potential impact includes above-average precipitation in the south, with below-average rainfall in the Pacific Northwest and the Ohio and Tennessee Valleys.

Read the article >>

 
2009 Catastrophe Update: Other Significant Events of 2009:  In 2009, there were frequent reminders of the risks posed by earthquakes, and it was Asia again that suffered the most when two massive earthquakes struck Indonesia and the Samoa region in the space of a day. The most deadly earthquake of the year hit southern Sumatra in Indonesia on September 30, killing more than 1,100 people. The earthquake, measuring 7.6Mw, left around 500,000 people homeless after 250,000 homes were damaged, half of them completely destroyed.

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Nine Months 2009: Guy Carpenter Global Reinsurance Composite:   The members of the Guy Carpenter Global Reinsurance Composite (GCGRC) saw their total net income more than double to almost $10 billion thanks to strong underwriting results and a substantial recovery in asset values.

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Most Popular Keyword:  significant events in 2009

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2009 Catastrophe Update: Tropical Cyclone Activity in 2009:  In direct contrast to 2008, no significant insured losses arose from tropical cyclones in 2009. In fact the 2009 hurricane season in the Atlantic was notable only for its below-average activity. For the first time in three years, no hurricanes made landfall in the United States, which explains why insured losses were substantially down in the country compared to the pervious year.  

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