Archive for February, 2013



February 28th, 2013

Assessing Future Reserve Development

Posted at 1:00 AM ET

leong_jessica_gcciJessica Leong, Lead Casualty Specialty Actuary
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By extrapolating reserving trends, it may be possible to assess the sector’s reserve adequacy. Two cyclical patterns are clear.

  • The cycle turned on an accident year basis in 2004. Industry-wide accident year deterioration now appears imminent.
  • Guy Carpenter’s view of the cycle shows that over the last 30 years, accident years that begin to show deteriorating results continue to deteriorate.

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February 27th, 2013

Casualty Lines

Posted at 1:00 AM ET

Here we highlight recent GC Capital Ideas stories that have focused on casualty lines of business. 

Contingent Business Interruption: Life Support for Industry: Traditional insurance products are insufficient to address these increasingly complex challenges. The standard business interruption policy only indemnifies an insured for a reduction in revenue following damage at its own premises. Contingent business interruption is a generic term for extensions to the standard cover that provide for reduction in revenue as a result of damage at locations other than the insured’s own premises, whether it be suppliers or customers. In some cases insurers are providing cover on a “non-damage” basis, which protects against insolvency or political risk among an array of contingencies that might disturb the supply chain.

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Criminal Liability of Companies Under Spanish Law: What is the Real Impact on Directors & Officers Coverage? The financial crisis has triggered a number of criminal investigations against companies and their directors. In light of these developments, this section provides an overview of the recently introduced Spanish regulation concerning criminal liability of companies and the real impact this reform will have on directors and officers policies.

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Swiss Supreme Court: Scope of Ban on Retroactive Insurance: The current Swiss Insurance Contract Act (Versicherungsvertragsgesetz, VVG) prohibits retroactive insurance. Therefore, an insurance contract is usually void if the risk no longer exists or the feared event has already occurred before the contract is concluded (Article 9 VVG).

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February 26th, 2013

Recent Enterprise Risk Management Stories

Posted at 1:00 AM ET

Here we highlight recent GC Capital Ideas stories on enterprise risk management. 

Guy Carpenter Launches MetaRisk® 7.1: Guy Carpenter today announced the release of MetaRisk® 7.1, the latest version of the firm’s premier risk and capital management decision making tool. The platform offers access to a variety of new features and enhancements that will improve usability, increase overall functionality and enable the development of more accurate and efficient risk and capital models.

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Risk Preference Function - Embedding Risk-Reward in Capital Allocation: Capital allocation decisions are among the most important decisions made by company management. Through our own research and thought leadership and our observance of best practices at clients around the world, Guy Carpenter’s Enterprise Risk Management Advisory practice has compiled a set of leading practices around capital allocation for (re)insurers.

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February 25th, 2013

Thinking Differently: Opportunities for Profitable Growth

Posted at 1:00 AM ET

lamm-tennant_joan_bioJoan Lamm-Tennant, PhD, Chief Economist and Risk Strategist
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The macroeconomic environment continues to be top-of-mind among insurance leaders. With growth in global real gross domestic product (GDP) slowing from 4.1 percent in 2010 to 3 percent in 2011, insurance leaders continue to experience significant headwinds challenging profitable growth. As reported by Swiss Re, insurance overall direct premiums declined 0.8 percent in real terms in 2011. Nevertheless, pockets of opportunities do exist and will continue in the near term. Stabilizing social/political conditions, investments in infrastructure and demographic progression continue to fuel strong positive GDP growth and increasing insurance penetration in emerging economies. In these economies, overall direct premiums increased 1.3 percent in real terms in 2011, with non-life premiums increasing 9.1 percent.

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February 22nd, 2013

Week’s Top Stories: February 16 - 22, 2013

Posted at 7:47 AM ET

Guy Carpenter Launches MetaRisk® 7.1: Guy Carpenter today announced the release of MetaRisk® 7.1, the latest version of the firm’s premier risk and capital management decision making tool. The platform offers access to a variety of new features and enhancements that will improve usability, increase overall functionality and enable the development of more accurate and efficient risk and capital models.

Read the article >>

 

Chart Room Top Entries on GC Capital Ideas: Here we rank the most viewed GC Capital Ideas Chart Room entries of the last half year.

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Adapting to an Evolving Market of More Permanent Capital Market Capacity:  A new capital management paradigm is challenging the traditional reinsurance model. Historically, significant market losses from major catastrophic events and low investment yields were a catalyst for an improved rate environment.

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Powerful Portfolio Planning and Point-of-Sale Capabilities Help Insurers Set Strategy and Drive Profitability:  Guy Carpenter’s GC ProfitPoint+ SM, delivers powerful portfolio planning and point-of-sale capabilities allowing insurers to set, calibrate and monitor risk management strategy. A single, easy-to-use solution, it enables line underwriters and agents to make informed decisions about individual policies by drawing on the robust analytical capabilities and insurance industry insight of Guy Carpenter. It crystallizes the business results of portfolio strategy that would otherwise take insurers weeks to analyze.

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January 1, 2013 Renewals Bring Stable Reinsurance Pricing: Guy Carpenter reports that the reinsurance sector enters 2013 equipped with ample dedicated capital and stable pricing. In its 2013 global renewal report, The Route to Profitable Growth, Guy Carpenter finds that the January 1, 2013, renewals took place against a stable backdrop, with only loss-affected lines and select regions experiencing price volatility. The market was supported by a combination of factors including lower than normal catastrophe losses during the first nine months of 2012, new reinsurance capacity and record-high levels of capital.

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Most Popular Keyword:  european d&o market

 

And, you may have missed…..

CAT- i Reports in Second Half 2012: Here we review all of the CAT-i report events that appeared on GC Capital Ideas in the second half of 2012.

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February 21st, 2013

Powerful Portfolio Planning and Point-of-Sale Capabilities Help Insurers Set Strategy and Drive Profitability

Posted at 1:00 AM ET

Subhashish Dutta, Head of Global Research and Development and Thomas Clift, Managing Director
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Guy Carpenter’s GC ProfitPoint+ SM, delivers powerful portfolio planning and point-of-sale capabilities allowing insurers to set, calibrate and monitor risk management strategy. A single, easy-to-use solution, it enables line underwriters and agents to make informed decisions about individual policies by drawing on the robust analytical capabilities and insurance industry insight of Guy Carpenter. It crystallizes the business results of portfolio strategy that would otherwise take insurers weeks to analyze.

Continue reading…

February 20th, 2013

Guy Carpenter Launches MetaRisk® 7.1

Posted at 6:00 AM ET

Guy Carpenter today announced the release of MetaRisk® 7.1, the latest version of the firm’s premier risk and capital management decision making tool. The platform offers access to a variety of new features and enhancements that will improve usability, increase overall functionality and enable the development of more accurate and efficient risk and capital models.

Continue reading…

February 20th, 2013

Adapting to an Evolving Market of More Permanent Capital Market Capacity

Posted at 1:00 AM ET

ezbiansky_chris_biopotter_des_photograph1Christopher Ezbiansky, Mergers and Acquisitions Advisory - Americas and Des Potter, Mergers and Acquisitions Advisory - Europe, GC Securities*

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A new capital management paradigm is challenging the traditional reinsurance model. Historically, significant market losses from major catastrophic events and low investment yields were a catalyst for an improved rate environment. Faced with current economic conditions, reinsurers are finding it more difficult to generate adequate returns in excess of their cost of capital, and are seeing an increased competitive threat from alternative capacity from the capital markets. New money appears to be more permanent and therefore limits the firmness and duration of any improved rate environment. Catastrophe bonds, sidecars, structured industry-loss warranties and collateralized reinsurance vehicles are among the alternative market options. Hedge funds are also playing a more active role, with a couple of major names setting up reinsurance operations in Bermuda.

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February 19th, 2013

Chart Room Top Entries on GC Capital Ideas

Posted at 1:00 AM ET

Here we rank the most viewed GC Capital Ideas Chart Room entries of the last half year. 

1. Chart: Guy Carpenter Global Rate on Line Index, January 2013: The Guy Carpenter Global Property Catastrophe Reinsurance Rate on Line (ROL) index fell marginally at the January 1, 2013, renewal. This is the seventh consecutive annual renewal in which changes to the index have equaled 10 percent or less, indicating a global market with capacity appropriate to meet demand.

View the chart >>

 

2. Chart: Guy Carpenter Regional Rate on Line Index, January 2013: There was variation regionally in the Guy Carpenter Regional Property Catastrophe Reinsurance Rate on Line (ROL) index. U.S. property catastrophe pricing was most affected by the landfall of Superstorm Sandy while other regions were flat to down.

View the chart >>

 

3. Chart: Global Significant Insured Losses, 2011 to Q4 2012: 2012 insured losses in aggregate were “normal.”

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4. Chart: U.S. and Bermuda Property-Casualty M&A Activity, 2004 to 2012: For the property and casualty sector, market consolidation was at the periphery.

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5. Chart: Long-Term Evolution of Shareholders’ Funds, 1998 to Q3 2012: Dedicated reinsurance capital was at a record high immediately prior to Superstorm Sandy.

View the chart >>

 

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* Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd., which is authorized and regulated by the Financial Services Authority. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of an offer to buy any security, financial instrument, reinsurance or insurance product. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

February 18th, 2013

GC Capital Tip: Get Specific with Search

Posted at 1:00 AM ET

Looking for specific information? If the tag cloud is bringing back too many results, use the “search” feature. It’s at the top of the right column on every page. Enter the terms that you want to find and click the button. You will be brought to a results page that lists article headlines and brief summaries. Click the headline that interests you.

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