1. Floods in Thailand: Thailand has experienced its worst flooding in decades over the last couple of months, leaving more than 300 people dead and causing severe damage across the country. Hundreds of thousands of homes have been destroyed or damaged and the floodwaters have severely disrupted manufacturing operations in central regions of the country. Reports said the flooding has affected 61 of Thailand’s 77 provinces, from Chiang Mai in the north to parts of the capital city of Bangkok.
2. 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.
3. Uncertain Market Ahead for Reinsurance Industry, Finds Guy Carpenter’s 2011 World Catastrophe Report: A number of developments in 2011 have created an uncertain market for the reinsurance industry as it begins to focus on next year’s renewals, according to 2011 World Catastrophe Reinsurance Market Report, released by Guy Carpenter & Company. These developments range from elevated global catastrophe activity to catastrophe model changes that have altered risk perceptions and changed expected loss amounts.
4. Impact of Solvency II on Primary Insurance Companies: Challenges and Opportunities, Part I: It is clear that Solvency II presents a host of challenges to (re)insurers. Below we explore in detail some of the key considerations, challenges and opportunities associated with Solvency II: Reducing risk and required capital levels through reinsurance solutions; other risk mitigation techniques, diversification and market risk. Also discusses changes in focus for companies and boards and the Standard Formula versus the internal model.
5. Timeline: Transitioning to Solvency II: As is often the case with pan-European legislation, the implementation timeframe for Solvency II has generated a great deal of debate and discussion - and what had been a firm January 2013 go-live date now looks increasingly unlikely. It appears at this point that the new regulations will be phased in, and enforcement is likely to be postponed by a year. Such a delay would buy some welcome time for companies that are behind in their Solvency II preparations - but is being opposed by others who say it will add more costs to an already expensive preparation process.
6. Hurricane Jova: Hurricane Jova is now a major category 3 hurricane following rapid strengthening since it formed in the Northeast Pacific Ocean on October 6. According to the National Hurricane Centre (NHC) the eye of hurricane Jova is currently located around 265 miles (430 kilometers) to the southwest of the busy port city of Manzanillo in Colima state, Mexico.
7. Impact of Solvency II on Primary Insurance Companies: Cost Considerations: Implementation costs are a major additional expense in an environment where insurers are already struggling to maintain profitability during an inopportune time in the underwriting cycle. The ultimate goal of the Solvency II initiative is to create a more secure and safe environment for policyholders. However, the substantial costs to the industry as a whole are such that the more immediate impact may be the exact opposite of what was intended.
8. 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.
9. Update: Oil Refinery Fire, Bukom Island, Singapore: A large fire broke out at Royal Dutch Shell’s massive Pulau Bukom refinery near Singapore on September 28, damaging parts of the plant and prompting the closure of the entire facility. Reports said the fire at the 500,000 barrels-a-day refinery in Pulau Bukom, an island 5 kilometers (3 miles) off Singapore, started at about 13:15 local time (05:15 UTC) and burned for around 36 hours. Eyewitnesses also reportedly heard three large explosions at the facility. Shell has stated it is in the process of shutting down the whole refinery. Reports said the fire is the worst to affect the plant in 23 years.
10. Update: Hurricane Rina: Rina is now a category 2 hurricane after rapid strengthening occurred during the evening of October 24. According to the National Hurricane Center (NHC), Hurricane Rina is now located around 210 miles (335 kilometers) southwest of Grand Cayman and around 320 miles (515 kilometers) east-southeast of Chetumal in Mexico. Rina is forecast to strengthen during the next 24 hours and could become a major hurricane by this evening or early Wednesday.