Archive for February, 2011



February 28th, 2011

Update: Earthquake in New Zealand

Posted at 2:26 PM ET

nz-eq-3-small1The official death toll from the earthquake that hit New Zealand’s South Island at 23:51 UTC on February 21 (12:51 on February 22 local time) has now reached 148, according to the latest reports. The epicenter of the earthquake, of magnitude 6.3, was located only 3 miles (5 km) from the city of Christchurch on New Zealand’s South Island, at a shallow depth of 2.5 miles (4 km), according to the U.S. Geological Survey(USGS).

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February 28th, 2011

Tropical Cyclone Activity Over Western Pacific and in South China, Korea and Japan

Posted at 1:00 AM ET

This new research brief from Guy Carpenter Asia-Pacific Climate Impact Centre, City University of Hong Kong reports on verifications of forecasts in 2010. Since 2000, City University of Hong Kong has been issuing real-time predictions of the annual number of tropical cyclones (TCs) affecting the western North Pacific (WNP). Verifications of the predictions have shown that the predictions are mostly correct within the error bars. We also began to predict the number of TCs making landfall in South China (SC) and the Korea and Japan region (KJ) in 2009 and 2010 respectively.

Click here to view the full report from the Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC) >>

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February 25th, 2011

Week’s Top Stories: February 19 - 25, 2011

Posted at 9:00 AM ET

Chart: Lloyd’s Market Capacity:  Lloyd’s capacity for 2011 is expected to be broadly flat compared to 2010, as some syndicates lower capacity and others increase or enter the Market. Operating margins will be squeezed in 2011, although the overall Market profitability will remain driven by the catastrophe losses which may or may not be incurred.

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Update: Earthquake in New Zealand:  The official death toll from the earthquake that hit New Zealand’s South Island at 23:51 UTC on February 21 has now reached 102, according to reports from New Zealand’s civil defense authority. The epicenter of the earthquake, of magnitude 6.3, was located only 3 miles (5 km) from the city of Christchurch on New Zealand’s South Island, at a shallow depth of 2.5 miles (4 km), according to the U.S. Geological Survey (USGS).

Read the article >>

Navigating the A.M. Best Supplemental Rating Questionnaire Changes: Recent changes related to the A.M. Best Supplemental Rating Questionnaire (SRQ) will have a sweeping impact on U.S. property and casualty insurers. Respondents are facing new questions regarding enterprise risk management (ERM), new considerations for workers compensation coverage, and the release of the new version 11 of the RMS RiskLink TM model, all of which will factor into a company’s A.M. Best rating.

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Top Enterprise Risk Management Stories of the Last Year

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Chart: Reinsurance Sector Price to Book Multiples and Forward ROE: Low valuation of the reinsurance sector may prove to be a catalyst for change by driving reinsurance sector consolidation. The chart below plots quoted reinsurance companies on price to book ratios and forward consensus returns on equity. The shaded area below 0.9x book value which now comprises the majority of the sector, is where mergers and acquisitions (M&A) have tended to take place in the recent past. Combined with significant share buybacks already taking place in the sector, additional M&A could slow the growth of dedicated reinsurance sector capital, thereby restricting the supply of reinsurance. This, in turn, could eventually drive rates higher.

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The Future of the Florida Property Market:  As U.S. property/casualty insurers begin to focus on their January 1, 2011 catastrophe renewals, they face a number of complex issues. The first challenge is effectively managing exposures in 2011 after an unexpectedly quiet hurricane season, in terms of losses. Following on the heels of the first six months of 2010, which saw significant losses from global catastrophes including higher levels of wind and hail losses in the midwestern United States, the Atlantic hurricane season was forecasted to be an active one.

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February 24th, 2011

GC Securities* Announces Completion of 144A Catastrophe Bond – Foundation Re III Ltd. 2011-1

Posted at 2:55 PM ET

GC Securities, a provider of investment banking services to the (re)insurance industry and affiliate of Guy Carpenter & Company announced the placement of USD135 million of protection through an existing catastrophe bond shelf program, Foundation Re III Ltd., to benefit Hartford Fire Insurance Company. The Series 2011-1 Notes, which represent The Hartford’s fifth utilization of its “Foundation Re” program, provide fully collateralized, multi-year protection for United States hurricanes.

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February 24th, 2011

Update: Earthquake in New Zealand

Posted at 12:34 PM ET

nz-eq-3-smallThe official death toll from the earthquake that hit New Zealand’s South Island at 23:51 UTC on February 21 (12:51 on February 22 local time) has now reached 102, according to reports from New Zealand’s civil defence authority. The epicenter of the earthquake, of magnitude 6.3, was located only 3 miles (5 km) from the city of Christchurch on New Zealand’s South Island, at a shallow depth of 2.5 miles (4 km), according to the U.S. Geological Survey (USGS).

Continue reading…

February 24th, 2011

Chart: Property & Casualty Accident Year Reserve Development

Posted at 10:00 AM ET

Accident year loss experience is beginning to show signs of lower reserve margins. The chart below shows U.S. P&C industry reserve development by accident year since 2000. The reserving cycle is evident in the graph with adverse accident year loss development during the “soft market” years of 2000 and 2001 and favorable development between 2003 and 2007. The orange line in the graph shows the average initial loss ratio pick. The old reserving adage that “good years get better and bad years get worse” appears to be borne out here.

fig-13

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February 23rd, 2011

Update: Earthquake in New Zealand

Posted at 11:24 AM ET

nz-eq-2-smallThe death toll from the earthquake that hit New Zealand’s South Island at 23:51 UTC on February 21(12:51 on February 23 local time) has now reached 75, according to the latest reports. The epicenter of the earthquake, of magnitude 6.3, was located only 3 miles (5 km) from the city of Christchurch on New Zealand’s South Island, at a shallow depth of 2.5 miles (4 km), according to the U.S. Geological Survey (USGS).

Continue reading…

February 23rd, 2011

Chart: Reinsurance Sector Price to Book Multiples and Forward ROE

Posted at 1:00 AM ET

Low valuation of the reinsurance sector may prove to be a catalyst for change by driving reinsurance sector consolidation. The chart below plots quoted reinsurance companies on price to book ratios and forward consensus returns on equity. The shaded area below 0.9x book value which now comprises the majority of the sector, is where mergers and acquisitions (M&A) have tended to take place in the recent past. Combined with significant share buybacks already taking place in the sector, additional M&A could slow the growth of dedicated reinsurance sector capital, thereby restricting the supply of reinsurance. This, in turn, could eventually drive rates higher.

fig-16

Continue reading…

February 22nd, 2011

Earthquake in New Zealand

Posted at 2:18 PM ET

nz-eq-1-smallA deadly earthquake hit New Zealand’s South Island at 23:51 UTC on February 21 (12:51 on February 22 local time) causing at least 65 fatalities and widespread damage, according to latest reports. The epicenter of the earthquake, measuring 6.3 Mw, was located only 3 miles (5 km) from the city of Christchurch on New Zealand’s South Island, at a shallow depth of 2.5 miles (4 km), according to the United States Geological Survey (USGS).

Continue reading…

February 22nd, 2011

Navigating the A.M. Best Supplemental Rating Questionnaire Changes

Posted at 1:00 AM ET

Recent changes related to the A.M. Best Supplemental Rating Questionnaire (SRQ) will have a sweeping impact on U.S. property and casualty insurers. Respondents are facing new questions regarding enterprise risk management (ERM), new considerations for workers compensation coverage, and the release of the new version 11 of the RMS RiskLinkTM model, all of which will factor into a company’s A.M. Best rating.

Continue reading…