Wide Range of Outcomes Seen in June 1, 2011, Florida Reinsurance Renewals: The June 1, 2011, renewals took place against the backdrop of record first-half catastrophe losses and uncertainty surrounding the release of version 11 of Risk Management Solutions’ (RMS) U.S. hurricane model. The heavy international natural catastrophe-related losses that occurred during the first quarter of 2011 - combined with the multi-billion dollar losses from tornadoes in the United States in April and May - have added to significant loss activity over the past 16 months, culminating in insured losses of close to USD100 billion.
Summary of 2011 Hurricane Season Forecasts: With the start of the Atlantic hurricane season just a few days away, Guy Carpenter has summarized the various forecasters’ predictions for the 2011 season. AccuWeather, the Colorado State University (CSU), the National Oceanic and Atmospheric Administration (NOAA) and Weather Services International (WSI) have released forecasts for the forthcoming season and there seems to be a general consensus that 2011 will see above-average activity with an increased risk of hurricane landfalls in the United States.
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.
Floods in the United States: Heavy rainfall has triggered severe floods across central and southern regions of the United States since April as the Mississippi River overflowed and flooded thousands of homes and businesses. High levels of precipitation, combined with springtime snowmelt, caused the Mississippi River and many of its tributaries to rise to record levels. Nine states have been affected by major flooding, with Missouri, Kentucky, Tennessee, Arkansas, Mississippi and Louisiana particularly badly hit. President Barack has Obama declared the western counties of Kentucky, Tennessee and Mississippi federal disaster areas.
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