Guy Carpenter & Company, LLC announced publication of its first Industry Risk Benchmarks report, which provides risk benchmarks for loss ratios and reserves, by line of business, for coefficient of variation (standard deviation/mean), correlation and cycles.
The risk benchmarks are based on proprietary analyses of an extensive database of industry information that includes the reported financial results of hundreds of insurance companies over a thirty-year period. Insurers can use the benchmarks to assess the risk parameters that they use in economic capital models.
Developed in conjunction with Risk Lighthouse LLC, a research firm specializing in the development of economic risk intelligence, risk indices and modeling tools for the financial and insurance industries, the report was presented yesterday at the 2011 Risk Benchmarks Conference in New York, hosted by Guy Carpenter and Risk Lighthouse. Speakers included Steve White, Guy Carpenter’s Chief Actuary; Jessica Leong, Guy Carpenter’s Lead Casualty Specialty Actuary; Shaun Wang, Ph.D., Chairman of Risk Lighthouse and Chair of Actuarial Science at Georgia State University; and Don Mango, Guy Carpenter’s Head of Global Advisory.
The report is available upon request exclusively to clients of Guy Carpenter.
Don Mango, Head of Global Advisory, stated “We developed the risk benchmarks as a timely tool to help insurers in their economic capital modeling, with detailed explanations on what they mean and how they can be used. As we update this report annually, we plan to include additional benchmarks that clients would find useful when calculating risks and estimating reserves.”