Archive for June, 2010



June 30th, 2010

Update: Hurricane Alex

Posted at 9:08 AM ET

alex3smallAlex has intensified to become the first hurricane of the 2010 season, making it the first June hurricane in the Atlantic since 1995. The storm is located approximately 175 miles (280 kilometers) east of La Pesca in Mexico and packs sustained winds of around 80 mph (130 kmph), according to the National Hurricane Center (NHC). Alex is traveling in a west-northwest direction and a slow west to west-northwest motion is expected over the next 24 to 48 hours. On this forecast track, Alex will approach the coast of northern Mexico and southern Texas later today and make landfall south of the Texas/Mexico border early on July 1 UTC. The NHC said Alex is expected to strengthen over the next 24 hours and could become a category 2 hurricane prior to landfall. The NHC said hurricane-force winds extend 25 miles (35 kilometers) from the center of the storm while tropical storm-force winds extend 200 miles (235 kilometers). 

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June 30th, 2010

Verification of Guy Carpenter Asia-Pacific Climate Impact Centre Forecasts of Tropical Cyclone Activity in the Australian Region in 2009/2010

Posted at 1:00 AM ET

The Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC) issued forecasts in December of 2009 of the annual number of tropical cyclones affecting the Australian region. A comparison of the actual number of storms that occurred with the forecasts, verifies that eight tropical storms were forecast in the entire Australian region and eight tropical cyclones occurred during the season. Regarding the Western Australia region, five tropical cyclones were forecast and four actually occurred. The GCACIC forecast correctly predicted the number of tropical cyclones in the Australian region and only slightly over-estimated the tropical storm number in the Western Australia region.

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June 29th, 2010

Update: Tropical Storm Alex

Posted at 3:45 PM ET

alexsmall1Tropical Storm Alex is located approximately 460 miles (735 kilometers) southeast of Brownsville in Texas and packs sustained winds of around 70 mph (110 kmph), according to the National Hurricane Center (NHC). Alex is currently traveling in a north-northwest direction and a turn towards the northwest is forecast for later today before shifting to the west-northwest tomorrow. The NHC said Alex is expected to strengthen over the next 48 hours and become the first hurricane of the 2010 Atlantic hurricane season. If Alex follows its forecast path, the NHC said the storm will make landfall just south of the Texas/Mexico border on July 1. The NHC said tropical storm-force winds extend 105 miles (165 kilometers) from the center of the storm.

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June 29th, 2010

Terrorism Risk Insurance 2010: Marsh survey reveals more than 60 percent of organizations bought coverage in 2009

Posted at 1:00 AM ET

Despite an ever-changing terrorism risk insurance market, businesses from every industry sector continue to purchase coverage - more than 60 percent of organizations surveyed by Marsh bought coverage in 2009.

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June 28th, 2010

Tropical Storm Alex

Posted at 8:50 AM ET

alexsmallTropical Storm Alex became the first named storm of the 2010 Atlantic hurricane season when it developed on June 25. Alex subsequently moved across Belize and the Yucatan Peninsula in Mexico as a tropical storm on June 26/27, bringing strong winds and heavy rain to the region. Alex has since re-emerged in the southern Gulf of Mexico and is currently located approximately 75 miles (115 kilometers) west of Campeche in Mexico with sustained winds of around 50 mph (85 kmph), according to the National Hurricane Center (NHC). The storm is traveling in a northwest direction and this general motion is expected to continue for the next 48 hours as the storm strengthens. The NHC said tropical storm-force winds extend 70 miles (110 kilometers) from the center of the storm.

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June 28th, 2010

The Time Profile of Risk: From the Desk of Guy Carpenter’s Chief Actuary

Posted at 1:00 AM ET

mango_smallDon Mango, Chief Actuary
Contact

According to the draft European Union Solvency IIc directives, companies will need to provide an “own risk and solvency assessment” (ORSA). The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) has prepared an issues paper that provides guidance to assist (re)insurers in implementing the ORSA.

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June 25th, 2010

Week’s Top Stories: June 19 - June 25, 2010

Posted at 11:00 AM ET

A National Flood Modeling Solution for Mainland France:   Guy Carpenter has developed a state-of-the-art probabilistic flood model for mainland France in collaboration with hydrological and hydraulic modeling experts, JBA Consulting (JBA) and Intermap Technologies (Intermap), a global provider of high-quality 3D digital elevation models.

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2010 Hurricane Season Begins: Knowing, Understanding and Better Managing the Risks:   The 2010 hurricane season kicked-off on June 1 and the meteorological forces wasted no time in getting down to business. Tropical storm Agatha slammed into Central America, killing at least 101 people. The hurricane season kick-off and the storm occurred as backdrops to the wrap up of the June 1, 2010 reinsurance renewals, traditionally centered on the Florida property marketplace.

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Terrorism - Reinsurers Standing By:   As we approach the ninth anniversary of the September 11, 2001 attacks, the threat from terrorism continues to pose a risk to the (re)insurance industry. The nature of the threat has changed since 2001, but terrorism remains a constant and serious risk with global recorded terror incidents at historic highs. Terrorist organizations operating in unstable countries present a danger to the world, and the recent flurry of terrorist activity serves as a reminder that individuals and groups remain a serious threat.

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Floods in Southeast France:   Heavy rain on June 15-16 has triggered severe flash floods in southeastern France, killing at least 22 people according to the latest estimates from local authorities. The damage and disruption has been widespread, with hundreds of homes inundated and thousands reported to be without electricity or phone lines. Officials said around 10 people remain missing and they fear the death toll could rise. The southeastern province of Alpes Cote d’Azur has been particularly badly affected, with officials in the Var department saying that damage is severe. Reports said that between 1,500 and 2,500 people were forced to evacuate their homes and spend the night in schools or other temporary shelters, and some 104,000 houses remain without electricity in the aftermath of the flooding.

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Risk Profile, Appetite, and Tolerance:   Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of Enterprise Risk Management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

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Impact of Earnings Volatility on Price/Book Ratios:   The link between a company’s earnings and its share price is intuitive and well documented. Equally logical, although far less studied, is the correlation between the volatility of earnings and share price. The favorable impact of stable earnings on market valuation is intuitive considering market capitalization represents a view of future discounted cash flows and unexpected earnings volatility reduces the predictability of those cash flows.

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June 24th, 2010

Terrorism - Reinsurers Standing By: Index

Posted at 1:00 AM ET

David Flandro, Head of Global Business Intelligence and Julian Alovisi, Senior Vice President
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As the terrorism threat has evolved, the (re)insurance industry has reacted and adapted. Certainly, the terror reinsurance market has changed significantly since 2001. Activity and pricing levels have generally fallen since the peak that occurred following the attacks of September 11, 2001 due to the absence of a major loss and supply/ demand imbalances. Regional differences exist, however, with activity in the United States clearly down while other markets have remained steady.

A recent Guy Carpenter & Company, LLC survey of reinsurance underwriters improved our understanding of the terrorism reinsurance market. The findings were consistent with our beliefs and offered additional insights that are significant and encouraging. 

The dynamic nature of terrorism requires a different underwriting approach, and Guy Carpenter will continue to offer advice and solutions to help insurers manage their terrorism exposure.

Link to PDF of full report >>

Terrorism - Reinsurers Standing By, Part I: Introduction »

Terrorism - Reinsurers Standing By, Part II:  Risks, Threats and Exposures »

Terrorism - Reinsurers Standing By, Part III: Terror Reinsurance Market»

Terrorism - Reinsurers Standing By, Part IV: Terrorism Analytics and Rating Agency Requirements »

Terrorism - Reinsurers Standing By, Part V: Conclusion

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Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/SIPC. Main Office:  1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd., which is authorized and regulated by the Financial Services Authority. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC.  MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies.  This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.   

June 23rd, 2010

Terrorism - Reinsurers Standing By, Part V: Conclusion

Posted at 1:00 AM ET

David Flandro, Head of Global Business Intelligence and Julian Alovisi, Senior Vice President
Contact

This series has shown that terrorism remains a constant and real risk. Although more
effective counter-terrorism measures have frustrated al-Qaeda’s ability to plan largescale attacks since the events of September 11, 2001, global recorded terror incidents are at historic highs. The emergence of individuals or autonomous groups aligned to the aims of al-Qaeda continues to threaten the developed world, especially as insurgents are able to operate in unstable countries such as Pakistan and Yemen.

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June 22nd, 2010

Terrorism - Reinsurers Standing By, Part IV: Terrorism Analytics and Rating Agency Requirements

Posted at 1:00 AM ET

David Flandro, Head of Global Business Intelligence and Julian Alovisi, Senior Vice President
Contact

To support the process of managing and underwriting the terrorism peril, (re)insurers
are increasingly using tools to analyze the risk. The dynamic nature of terrorism, and
the uncertainty in identifying the targets and frequency of attacks, requires a different
approach to manage the risk.

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