Risk Management Lessons from the Olympics: Guy Carpenter’s Chief Actuary Offers Some Observations: Winter sports are known for their inherent high levels of riskiness, so it should not be too surprising that some valuable lessons related to “personal risk management behavior” can be drawn from the way the athletes make decisions and how the competitions are conducted and judged. As risk professionals, when we watch the action on the snowy mountains and icy rinks, we can get another view on the choices made in the taking of risk or in mitigating risk. Here are just a few lessons that offer additional insights.
Severe Weather in Melbourne, Australia: A super cell thunderstorm battered Melbourne and its suburbs on March 6, causing severe damage to homes, businesses and vehicles from Flemington to Ferntree Gully. The storm system brought winds of up to 100 kmph (60 mph) to the region and dumped hailstones that measured around 100 mm (4 inches) in diameter, according to the Australian Bureau of Meteorology. Flash flooding was also reported as up to 45 mm (1.8 inches) of rain fell in around 30 minutes. Reports said Melbourne’s entire metropolitan area was hit by the severe weather, with officials saying the city’s eastern and southeastern areas were particularly badly affected.
Workers Compensation Jan 1 Renewal: With both the indemnity and medical severity components continuing to rise, the cost of workers compensation insurance remains a top concern for all employers, despite favorable trends in reduced claim frequency. The recession has further put pressure on wages that are being outpaced by indemnity inflation. Workers compensation medical inflation also continues to grow faster than the Medical Consumer Price Index. Despite these trends, primary workers compensation writers remained competitive by either keeping rates flat or granting reductions up to 5 percent on premium rates. Insurers attempted to write new business to offset lost premium caused by exposure decreases across their portfolios.
Update 2: Windstorm Xynthia: A powerful Atlantic storm named Xynthia battered western Europe with hurricane-force winds, surging seas and driving rain on February 27 and 28, causing widespread property damage and severely disrupting transport networks and infrastructure. The most severe damage was predominantly seen in western France, though disruption was reported across several countries in western Europe. Reports said at least 64 people were killed across France, Germany, Spain, Portugal and Belgium, and more than 1 million households lost power at the height of the storm. At least 53 of the fatalities occurred in France, which was the country worst-affected by the windstorm.
Construction & Engineering Renewals at 1/1: The 2008-2009 global financial crisis had a significant impact on insurers in the engineering and construction sector. Many large and small Contractors All Risk (CAR)/Erection All Risk (EAR) single projects around the world were either cancelled or suspended due to lack of available financing. These developments have caused insurers’ income from construction projects to shrink. Insurers see a need to expand into other classes, such as annuals, power and breakdown.
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Lloyd’s: A Resurgent Market, Part I: Overview, Underwriting and Operating Performance: Lloyd’s, poised to strongly capitalize on opportunities as 2009 began, saw its competitive position continue to strengthen during the year. The resilience of operating performance and capitalization to the very challenging economic environment of the past 18 months, coupled with a continued reduction in the number of legacy issues, has been rewarded. Market share gains, rating affirmations and continued strong investor interest prevailed.