Guy Carpenter & Company announced the expansion of its risk management capabilities in the Asia Pacific region with a number of senior-level appointments.
Archive for October, 2011
In our 2010 Asia Pacific Catastrophe report, we described how the Asia Pacific region has significant exposure to a wide variety of catastrophe perils. The events of the past 18 months have demonstrated how real these exposures are: a series of significant catastrophe losses in our region during 2010 and 2011 has turned the world’s focus on the Asia Pacific area.
Update: Floods in Thailand: Thailand has experienced its worst flooding in 50 years over the last few months, leaving more than 360 people dead and causing severe damage across the country, according to reports. Hundreds of thousands of homes have been destroyed or damaged and the floodwaters have severely disrupted manufacturing operations in central regions of the country. The floodwaters are now threatening the capital of Bangkok. Reports said the flooding has affected 61 of Thailand’s 77 provinces, from Chiang Mai in the north to parts of Bangkok.
Update: Hurricane Rina: Hurricane Rina, the seventeenth named storm and sixth hurricane of the 2011 Atlantic hurricane season, is currently located approximately 115 miles (190 kilometers) south of Cozumel in Mexico and around 95 miles (150 kilometers) east-northeast of Chetumal, according to the National Hurricane Center (NHC). The storm has unexpectedly weakened over the last 18 hours and currently packs sustained winds of around 75 mph (120 kmph), equivalent to a weak category 1 hurricane.
Predictive Modeling Where You Need It Most: Taming the “long tail” beast has never been easy, and reinsurance intermediaries - including Guy Carpenter - have long focused on helping cedents quantify these risks. For events that happen only infrequently but come with severe financial consequences, planning, mitigation and measurement of outcomes can be notoriously difficult.
Managing Catastrophe Model Uncertainty: Uncertainty is ever present in the insurance business, and despite relentless enhancements in data gathering and processing power, it is still a large factor in risk modeling and assessment. This fact, driven home by recent model changes and unexpected natural catastrophes, can be disconcerting - even frightening - to industry participants.
Reinsurance Capital, Analytics and Market Intelligence: Three Parts of a Successful Renewal: A year busy with global catastrophe activity will undoubtedly affect the January 1, 2012 reinsurance renewal. Whether high catastrophe losses around the world will counteract the effective management of capital remains to be seen and many factors will be brought forward on both sides of the negotiating table. Cedents are well-positioned to renew at favorable rates and conditions, as long as they bring the right information to bear. The savvy use of analytics and market intelligence can make a significant difference in the cost of cover. It pays to be prepared.
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Micro Risk Management: Risk, if left unmanaged by people with low incomes, may render their attempts to exit poverty more difficult. It may also increase the likelihood of a return or new entrance to poverty for those who hover just above the poverty line, and may increase the chances of personal loan default for the minority of low-income individuals with current access to microcredit (small value loans usually provided to help the entrepreneurial poor to develop microenterprises).
Rina made landfall over the northeastern coast of the Yucatan Peninsula in Mexico as a tropical storm packing sustained winds of around 60 mph (95 kmph) at around 03:00 UTC on October 28, according to the National Hurricane Center (NHC). The NHC said the tourist resorts of Tulum, Playa del Carmen, Cozumel and Cancun were hit by tropical storm force winds as such winds extended 70 miles (110 kilometers) to the north and east of the storm’s center at landfall. The storm is currently located about 15 miles (25 kilometers) west-northwest of Cancun and packs sustained winds of around 50 mph (85 kmph). Rina weakened significantly on its approach to the Yucatan Peninsula due to dry air and increased wind shear, limiting the damage across the Yucatan Peninsula but still causing disruption.
Hurricane Rina, the seventeenth named storm and sixth hurricane of the 2011 Atlantic hurricane season, is currently located approximately 115 miles (190 kilometers) south of Cozumel in Mexico and around 95 miles (150 kilometers) east-northeast of Chetumal, according to the National Hurricane Center (NHC). The storm has unexpectedly weakened over the last 18 hours and currently packs sustained winds of around 75 mph (120 kmph), equivalent to a weak category 1 hurricane. The NHC says there is a 22 percent chance of Rina maintaining its hurricane status over the next 24 hours. The storm is currently approaching Mexico’s Yucatan Peninsula and forecasts indicate it will pass over or near Cozumel Island and Cancun later today.
Hurricane Rina, the seventeenth named storm and sixth hurricane of the 2011 Atlantic hurricane season, remains a strong category 2 hurricane, packing sustained winds of around 110 mph (175 kmph), according to the National Hurricane Center (NHC). The storm has the potential to strengthen into a major category 3 hurricane either later today or tonight. According to the NHC, Rina is located around 230 miles (370 kilometers) south-southeast of Cozumel in Mexico and around 205 miles (330 kilometers) east-southeast of Chetumal in Mexico. The storm is expected to approach Mexico’s Yucatan Peninsula tonight and pass over or near Cozumel Island and Cancun tomorrow.
A powerful earthquake hit eastern Turkey at 10:41 UTC (13:41 local time) on October 23, causing severe shaking in Van Province and surrounding areas. The earthquake was the most powerful to hit Turkey since 1999 and widespread damage has been reported across eastern regions of the country, with more than 2,200 homes destroyed or damaged. The event, measuring 7.2 Mw, was located 16 kilometers (9 miles) north-northeast of the town of Van near the Iranian border. It was also centerd a relatively shallow 20 kilometers (12.4 miles) underground, according to the U.S. Geological Survey (USGS). The USGS added that around 16.7 million people live in areas impacted by a Modified Mercalli Intensity (MMI) or V or higher. Van City (population of 372,000) experienced intensity VIII on the MMI scale, equivalent to severe shaking with the potential to cause moderate to heavy damage to resistant buildings and heavy damage to more vulnerable structures. Elsewhere, the city of Ercis (92,000) and the town of Sarmansuyu (7,000) were hit by MMI intensity VII, very strong shaking that can cause moderate to heavy structural damage. More than 500 aftershocks have hit the region since the main earthquake, the most powerful at 6.0Mw.
Despite several years of discussion and preparation, Solvency II continues to evolve in Europe and influence other regulatory regimes globally. The implementation date for Solvency II is a moving target. The current view is that Solvency II will be delayed another year and become effective January 1, 2014. A transition of key elements of Solvency II is also expected, but the final implementation date and extent of the transition rules will not be ultimately known until the Omnibus II directive is finalized and issued, which is currently believed to be spring of 2012.
The impact of claims inflation on eroding returns is among the most vexing challenges that insurers face. Getting ahead of the reserving cycle would be a significant competitive advantage, but many carriers do not have the right tools at their disposal. As a result, the ability to hit target return on equity (ROE) levels is put at risk, and firm value hangs in the balance.