Reinsurance Protection: Aggregate covers - Reinsurance remains the best form of protection against catastrophe losses. Following the increased frequency of major catastrophic events witnessed in 2010 and 2011, many companies are revisiting the benefits of aggregate coverage. Aggregate coverage has long been offered in the reinsurance market because it is a solution that focuses on mitigating the impact of the frequency of loss. While much of the focus for catastrophe coverage is around severe shock losses, aggregates are also useful for horizontal coverage needs or a combination of frequency and severity.
Taking Control of Quantifying Your Natural Catastrophe Risk: Amidst the fast pace and frequent trends and changes in the market, a single business conversation can stand out. With the passage of time, one sees that it was a precursor to what would become a consistently held view - a sort of drumbeat of the times.
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.
Superstorm Sandy: Initial Impacts and Implications: Guy Carpenter has published a new briefing: Superstorm Sandy: Initial Impacts and Implications. As documented by the National Hurricane Center, Superstorm Sandy made landfall as a post-tropical cyclone at 8PM EDT, Monday, Oct 29, 2012, with maximum sustained winds of 80 miles per hour.
Guy Carpenter Publishes Second Annual Insurance Risk Benchmarks Report: Guy Carpenter has published its second annual Insurance Risk Benchmarks, a resource designed to help insurers assess risk parameters and improve economic capital modeling. The report provides benchmarks for underwriting and reserve risk by line of business and by industry segment for U.S. exposures, and can be used by insurers when benchmarking their economic capital models.
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Chart: Reinsurance Valuations at a Long-Term Low: The challenging macroeconomic environment of subdued growth and low interest rates meant the reinsurance sector ended 2011 trading near 20-year lows. As the chart below illustrates, the average price to book ratio for the sector of 0.893 is just greater than one and a half standard deviations down from the 20-year average of 1.32.