Archive for June, 2012



June 29th, 2012

Week’s Top Stories: June 23 - 29, 2012

Posted at 10:30 AM ET

Managing Catastrophe Model Uncertainty, Issues and Challenges: Here we bring together the segments of the popular series authored by John Major, which focuses on the issues and challenges in managing catastrophe model uncertainty.

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Top Solvency II Stories in GC Capital Ideas: Here we highlight GC Capital Ideas’ recent top stories covering the evolving Solvency II capital requirements regime.

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Emerging Markets Trends: Here we review recent GC Capital Ideas stories that have referenced (re)insurers doing business in emerging markets.

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Stories from Guy Carpenter’s Chief Casualty Specialty Actuary: Here we highlight recent GC Capital Ideas’ stories from Guy Carpenter’s Chief Casualty Specialty Actuary, Jessica Leong.

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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.

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Most Popular Keyword:  solvency ii

 

And, you may have missed…..

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.

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June 28th, 2012

Wildfires in Colorado, United States

Posted at 1:00 AM ET

colo-wild-smallDozens of wildfires, fueled by hot temperatures, strong winds, and low humidity have been affecting parts of Colorado in what has been described as the worst fire season in the history of the state. Of particular concern is the Waldo Canyon Fire, which has doubled in size from 6,200 acres to over 15,000 acres within the last 24 hours. The blaze has spread into the city limits of Colorado Springs, the second-most populated city of Colorado. More than 32,000 residents have been forced to evacuate their homes. Authorities have been unable to assess the amount of homes damaged from the blaze due to the intensity of the flames, but stated that structures and residences in the northwest corner of Colorado Springs are burning. Colorado Springs Fire Chief, Rich Brown, stated that the fire is one of epic proportions and that the blaze is “not even remotely close to being contained.” In northern Colorado, the High Park Fire has already consumed 257 homes and produced one fatality, however, the fire is reported as being nearly contained. A new wildfire near the city of Boulder is also causing concern. While there is no immediate danger to city residents, nearly 2,500 pre-evacuation notices have been sent to residences.

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June 28th, 2012

Stories from Guy Carpenter’s Chief Casualty Specialty Actuary

Posted at 1:00 AM ET

leong_jessica_gcciHere we highlight recent GC Capital Ideas’ stories from Guy Carpenter’s Chief Casualty Specialty Actuary, Jessica Leong.

Continue reading…

June 27th, 2012

Emerging Markets Trends

Posted at 1:00 AM ET

Here we review recent GC Capital Ideas stories that have referenced (re)insurers doing business in emerging markets.

Continue reading…

June 26th, 2012

Top Solvency II Stories in GC Capital Ideas

Posted at 1:00 AM ET

Here we highlight GC Capital Ideas’ recent top stories covering the evolving Solvency II capital requirements regime.

Continue reading…

June 25th, 2012

Managing Catastrophe Model Uncertainty, Issues and Challenges

Posted at 1:00 AM ET

major_john_gcciJohn Major, Director of Actuarial Research, GC Analytics®
Contact

Here we bring together the segments of the popular series authored by John Major, which focuses on the issues and challenges in managing catastrophe model uncertainty.

Continue reading…

June 22nd, 2012

Week’s Top Stories: June 16 - 22, 2012

Posted at 10:32 AM ET

Insights in Insurance from Marsh & McLennan:  Here we highlight recent insurance thought leadership from Guy Carpenter’s sister companies.

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Spring Conditions Suggest Tempered Atlantic Hurricane Season:  As the 2012 Atlantic Hurricane season kicks off, we present our multi-part review of hurricane forecasts.

Read the article >>

Alternative Risk Transfer:  Here we review GC Capital Ideas’ recent series on alternative risk transfer.

Read the article >>

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.

Read the article >>

Chart: June 1 Florida Renewal Reinsurer Quoting Behavior:  Analysis of June 1, 2012, leading markets’ quoting behavior reveals a continued shift in the once cohesive view of Florida pricing, reflecting markets’ more precise focus on individual company characteristics and variation in risk measurement as a result of customized use of model output. However, this year’s renewal does not reflect the degree of variation that was evident a year ago when reinsurers had to respond in a very shortened timeframe to conditions impacting their view of risk and capacity deployment tolerance.

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Most Popular Keyword:   Guy Carpenter reserve

 

And, you may have missed…

Solvency II: Changing the Game:  Market consensus holds that Solvency II will ultimately benefit reinsurers, as primary insurers faced with higher risk-adjusted capital requirements will turn to the reinsurance market as a relatively inexpensive source of additional capital and risk transfer. This assumption, however, conceals numerous challenges - and several opportunities - that Solvency II presents.

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June 21st, 2012

Alternative Risk Transfer

Posted at 1:00 AM ET

Here we review GC Capital Ideas’ recent series on alternative risk transfer.

Alternative Risk Transfer: Part I, Adverse Development Cover, Aggregate Stop Loss:  Alternative risk solutions are used to address the following client motivations: rating agency issues, adverse development, earnings stability, reserve and premium leverage issues, reinsurance recoverables, terrorism risk, capital optimization constraints, mergers and acquisitions, discontinued lines of business, provide coverage for gaps in traditional placements and optimizing costs. The structured risk team designs customized solutions to achieve a particular client’s goals. An optimal reinsurance structure is determined by capacity needs, risk tolerances, capital management, cost of risk and degree of confidence in results. A cedent will need to balance the cost of transferring sources of risk with not only its own capital management strategies but also capital requirements imposed by rating agencies.

Alternative Risk Transfer: Part II, BCAR Impact, Quota Share and Working Layer Excess of Loss Covers: Purchasing an aggregate stop loss provides a positive impact to the BCAR score by decreasing the capital charge. In year one, the benefit of the purchase is applied to the premium risk charge for the current accident year with benefit to the reserve risk charge in future years. In the first year, the accident year stop loss may reduce the premium risk charge significantly. The biggest reduction in the premium risk charge will occur when the stop loss provides protection between A.M. Best’s estimate of the expected loss ratio and 35 percent to 45 percent above that estimate. The decrease in the capital factor is equal to the limit purchased net of the AP that must be paid in the event of a loss. Surplus is reduced by the after-tax margin paid. For the second year, the reduction in capital charge is applied against the loss reserves. This reduces the benefit in the second year from that achieved in the first year, as the reserves are net of loss payments made in year one.

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June 20th, 2012

Insights in Insurance from Marsh & McLennan

Posted at 1:00 AM ET

Here we highlight recent insurance thought leadership from Guy Carpenter’s sister companies.

Continue reading…

June 19th, 2012

Spring Conditions Suggest Tempered Atlantic Hurricane Season

Posted at 1:00 AM ET

As the 2012 Atlantic Hurricane season kicks off, we present our multi-part review of hurricane forecasts.

Continue reading…