Reinsurance Renewal July 1, 2010: Capital Cushion Continues to Impact Pricing, Part I: Introduction and US Property: Further erosion of rates was evident at the July 1, 2010 reinsurance renewal. Property rates were down by as much 15 percent despite substantial catastrophe loss activity in the first half of 2010. Heavy losses from the Chilean earthquake were insufficient to turn prices outside the areas immediately affected by the earthquake, despite the announcement of large increases in estimates from the largest European reinsurers. In the energy and casualty sectors, conditions were flat or down, but the Deepwater Horizon rig disaster may exert upwards pressure as more information emerges. Excess capital remains available to absorb losses as evidenced by continuing share buy-backs and the substitution of equity capital with less expensive debt.
The Time Profile of Risk: From the Desk of Guy Carpenter’s Chief Actuary: According to the draft European Union Solvency II 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.
Terrorism Risk Insurance 2010: Marsh survey reveals more than 60 percent of organizations bought coverage in 2009: 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. This report provides a snapshot of the major issues and trends surrounding terrorism insurance in 2010.
Update: Hurricane Alex: Hurricane Alex has made landfall near Soto La Marina and La Pesca in Mexico’s Tamaulipas State as a category 2 hurricane, according to the National Hurricane Center (NHC). The storm made landfall around 02:00 UTC on July 1 with sustained winds of around 105 mph (165 kmph). The NHC said Alex was the first category 2 hurricane to develop in June in the Atlantic since Hurricane Alma in 1966.
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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Accounting and Accountability: Fair Value and Convergence: Fair value accounting - also known as “mark-to-market” - has appeared in the headlines quite frequently, largely because of the ongoing financial catastrophe. Recent statements by the Securities and Exchange Commission (SEC), Financial Accounting Standards Board (FASB), and International Accounting Standards Board (IASB) have fueled the debate, and the U.S. government’s USD700 billion bailout package requires that the SEC perform a study on the impact of fair value accounting on financial institutions … and suspend the practice, if necessary.
GCCapitalIdeas.com has been nominated for membership in the Lexis/Nexis Insurance Law Community (ILC) “Top 50 Insurance Blogs.” When considering blogs for membership, ILC looks for frequent posts, timely topics and quality writing. Guy Carpenter & Company, LLC is proud that GCCapitalIdeas has been nominated.
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