Tropical Storm Don, the fourth named storm of the 2011 Atlantic hurricane season, developed at 21:00 UTC on July 27 and is currently located in the Gulf of Mexico, approximately 190 miles (305 kilometers) southeast of Corpus Christi in Texas, according to the National Hurricane Center (NHC). Don packs sustained winds of around 50 mph (85 kmph). The storm is traveling in a west-northwest direction at 14 mph (22 kmph) and this general motion is expected to continue until Texas landfall late today or early Saturday. The NHC said tropical storm-force winds extend 105 miles (165 kilometers) from its center.
Archive for July, 2011
Guy Carpenter Introduces MetaRisk® 6.0 For Enhanced Risk and Capital Management Decision Making: Guy Carpenter & Company announced the release of MetaRisk 6.0, the latest version of the firm’s risk and capital decision tool. MetaRisk gives users the ability to interact with the drivers of risk in order to understand systemic and unique risk sources, reflect correlations among assets and liabilities, allocate capital and the cost of reinsurance, monitor earnings volatility and quantify overall capital adequacy.
Chart: U.S. Property Catastrophe Rate on Line Index Update: Chart presents historical pricing activity through July 1, 2011.
Bombing and Shooting Attacks, Oslo, Norway: Twin bombing and shooting attacks in Norway’s capital of Oslo killed at least 93 people and injured around 100 more on July 22, in western Europe’s deadliest attack since the 2004 Madrid bombings. According to reports, a Norwegian national with rightwing views detonated a car bomb in the government district of Oslo before traveling to an island outside of the city and gunning down youths at a summer camp. The bomb in Oslo targeted buildings connected to Norway’s governing Labor Party, and the youth camp on Utoya Island was also run by the party. According to the police, seven people were killed and 30 wounded in the initial bombing of government buildings in central Oslo, while 86 were killed and 66 wounded during the shooting at Utoya Island, some 20 miles (35 kilometers) northwest of the capital.
Chart: Significant Catastrophic Losses - 2010 to Q2 2011: This chart shows the accumulation of significant losses over the last 18 months. The losses sustained so far in 2011 have already surpassed those recorded in 2010 and 2009 combined.
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 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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TRIA, U.S. Terrorism and International Terrorism: Effect on the Insurance and Reinsurance Markets: Commercial insurers are strongly supportive of the Terrorism Risk Insurance Act of 2002 (TRIA), as it provides them an ultimate safety net for their terrorism exposures. However, the residual risk for terror events retained by insurers below the triggers and retention levels set by the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA), coupled with the relatively high cost of reinsurance in key exposure zones, means that insurers remain cautious about terrorism exposure. As a result, they continue to avoid accumulating high-profile urban exposures.
GC Securities, a division of MMC Securities Corp., announced the placement of USD150 million Principal At-Risk Variable Rate Notes (”Notes”) through catastrophe bond program Queen Street III Capital Limited. The transaction is the first non-U.S. hurricane exposed cat bond issued this year and specifically, since October 2010.
Tropical Storm Don, the fourth named storm of the 2011 Atlantic hurricane season, developed at 21:00 UTC on July 27 and is currently located in the Gulf of Mexico, approximately 635 miles (1,025 kilometers) east-southeast of Corpus Christi in Texas, according to the National Hurricane Center (NHC). Don packs sustained winds of around 40 mph (65 kmph). The storm is traveling in a west-northwest direction and this general motion is expected to continue for the next 24 to 36 hours as the storm approaches the Texas coastline. The NHC said Don is a small storm, with tropical storm-force winds extending 45 miles (75 kilometers) from its center.
Chart presents historical pricing activity through July 1, 2011.
This chart shows the accumulation of significant losses over the last 18 months. The losses sustained so far in 2011 have already surpassed those recorded in 2010 and 2009 combined.
Voting for the inaugural Reinsurance Magazine Awards and Charity Evening is now open with the industry being asked to cast their vote on which of their peers is the best in the business. Guy Carpenter encourages you to take part.
Medical insurance reform remains the strongest driver is this space, with insurers still grappling with concerns around unlimited lifetime maximums and minimum loss ratios. Reinsurers have responded by offering unlimited lifetime excess of loss coverages that have proved popular with some insurers. Pricing for these very high layers, such as unlimited excess of USD10 million per person, is capacity and market-based, as the layers are so far out-of-the money that there is no credible experience. Further, in the short term, many insurers will maintain annual maximums where possible, which will limit observable experience at the highest amounts. Claims and rate-making for the very high reinsurance coverages will be interesting to watch over the next couple of years as the different elements in the healthcare delivery value chain adapt to the new incentives in health care reform.
Guy Carpenter Wins 2011 Reinsurance Power Broker® Awards For Client Service, Market Insights and Creative Solutions
In recognition of their excellence in delivering value-added client service, 17 Guy Carpenter colleagues have been named to Risk & Insurance magazine’s 2011 list of Reinsurance Power Brokers. The distinctions were accompanied by high praise from clients, who applauded the award-winning brokers for their depth of industry knowledge and dedication to addressing client needs.
Focus on Hurricane Season at July 1, 2011 Reinsurance Renewal: International Casualty - Australia & New Zealand
There are a handful of casualty placements in Australia/New Zealand at the July 1 renewal. General casualty rates were flat. Most reinsurers seemed either reluctant or were instructed by their boards to not give up any rate levels. Renewals proceeded on a case by case basis. Where good claims experience and change in exposure mix justified it, reinsurers accepted rate reductions of up to 5 percent.