Archive for February, 2013



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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February 18th, 2013

GC Capital Tip: Use E-mail Alerts Effectively

Posted at 1:00 AM ET

We know that different readers have different needs. So, instead of checking GC Capital Ideas every day, use our e-mail alerts to see when we’ve published an article that may interest you. Every day, a summary of our most recent articles will arrive in your inbox. Click through to the stories that interest you. Skip those that don’t. In this way, e-mail alerts can save you time and ensure that you won’t miss the information that matters most to you.

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February 15th, 2013

Week’s Top Stories: February 9 - 15, 2013

Posted at 10:00 AM ET

The Growing Role of the Reinsurance Broker in the Life Market: Life and non-life reinsurance are different. One of the major differences is the prominence of the role of the reinsurance broker in non-life reinsurance - more than 75 percent of non-life business is transacted through brokers.

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Convergence Trends: Here we present recent GC Capital Ideas stories that have discussed the concept of the convergence of traditional and non-traditional sources of capital.

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Supply Chain Risk:  Here we review the recent GC Capital Ideas stories that have dealt with supply chain risk.

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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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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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Most Popular Keyword:   periodic payment orders

 

And, you may have missed…..

Implications of Emerging Market Growth on the (Re)insurance Sector: As the marketplace becomes increasingly competitive, and economic and socio-political conditions stabilize in many emerging markets, these territories will become more central to carrier companies’ strategies.

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February 14th, 2013

CAT- i Reports in Second Half 2012

Posted at 1:00 AM ET

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

Floods in Eastern Australia, February 1: Ex-tropical cyclone Oswald tracked over parts of Queensland and New South Wales in eastern Australia between January 23 and January 30, resulting in widespread damage from flooding, severe storms and tornadoes. Floodwaters in some areas reached record levels, causing damage to thousands of properties and forcing widespread evacuations.

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Update: Sandy, October 31: The full scope of Sandy’s impacts will still take a day or two to emerge. As storm surge recedes and those affected survey the damage, the last 24 hours have brought new reports of downed trees and power lines, with localized inland flooding, over an incredibly large area from the Mid-Atlantic to the Great Lakes to Atlantic Canada.

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Tropical Storm Isaac, August 30:  Tropical Storm Isaac now carries maximum sustained winds of 40 mph. It continues its slow drift, now to the north-northwest. Storm surge, inland flooding, and inland tornadoes remain as ongoing hazards with Isaac.

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February 13th, 2013

Convergence Trends

Posted at 1:00 AM ET

Here we present recent GC Capital Ideas stories that have discussed the concept of the convergence of traditional and non-traditional sources of capital.

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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GC Videocast - Rendez-Vous Press Briefing 2012 (David Priebe) Capital Markets Expansion:  David Priebe, Vice Chairman, Guy Carpenter, comments on the continuing expansion of the capital markets in the reinsurance arena. He said: “We have been talking for a long time about the convergence of the capital markets. But I believe the reinsurance market has come of age and that the old distinction of traditional and non-traditional sources of capital is redundant. The market has converged.”

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Guy Carpenter Explores Opportunities in a Challenging Market At Monte Carlo Rendez-Vous 2012: In its fifth annual press briefing held at the Reinsurance Rendez-Vous 2012 in Monte Carlo, Guy Carpenter & Company addressed the challenging market conditions currently facing the re/insurance industry and highlighted opportunities for growth.

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Catastrophe Bonds: 2011 Review - Market Dynamics, Outlook: Though primary issuance is likely to be down relative to 2010, 2011 stands as one of the most active, innovative and robust years in the convergence market’s history. Catastrophe loss activity was significant. For the year, current estimates suggest as much as USD100 billion of global insured catastrophe related losses, making 2011 one of the costliest years on record. Notably, 70 percent of this total is associated with catastrophe events outside of the United States.

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February 12th, 2013

The Growing Role of the Reinsurance Broker in the Life Market

Posted at 1:00 AM ET

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Nick Frankland, Chief Executive Officer, EMEA and Franck Pinette, Chief Executive Officer, European Life Business,
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Life and non-life reinsurance are different. One of the major differences is the prominence of the role of the reinsurance broker in non-life reinsurance - more than 75 percent of non-life business is transacted through brokers. This compares with only 5 percent transacted in life reinsurance. Why is there such a pronounced difference? And why is the life market developing a need for more frequent use of brokers?

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February 11th, 2013

Supply Chain Risk

Posted at 1:00 AM ET

Here we review the recent GC Capital Ideas stories that have dealt with supply chain risk. 

Contingent Business Interruption: Life Support for Industry:  the insurance industry contemplates the concept of supply chain risk, questioning whether it is a threat or an opportunity. The industry is undecided whether CBI coverage should be enthusiastically marketed as a positive differentiator or consigned to the “accommodation business” category. 

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Global Losses of 2011 Changed the Perception of Risk: Over the last few years, the global (re)insurance sector has seen significant increases in cold spot catastrophe losses. This growing trend refers to exposures in territories that have historically been considered non-peak zones and are unmodeled or inadequately modeled. It is also a by-product of the increasingly global economy in which (re)insurers operate and the growing demand for (re)insurance in emerging and developing territories.

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Thailand Flood 2011: Executive Summary: In 2011, Thailand experienced its worst flooding in years, leaving more than 800 people dead and causing severe damage across northern and central regions of the country. The floods, lasting a few months, severely damaged and disrupted manufacturing operations in Thailand.

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Guy Carpenter Asia Pacific Catastrophe Report 2012; Executive Summary: The Thai floods emphasized the need not only to understand asset concentrations better but also the fragility of global supply chains. Not only were these property damage losses modeled on a rudimentary basis if at all, but business interruption losses and supply chain disruption were completely unmodeled.

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Global Perils: The Tohoku earthquake/tsunami and the Thai floods revealed risks that (re)insurers had not previously considered, with CBI claims - resulting from supply chain failure - accounting for a large share of insured losses.

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February 8th, 2013

Week’s Top Stories: February 2 - 8, 2013

Posted at 10:00 AM ET

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

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Flood Risks and Flood Events in Asia Pacific:  Here we gather recent GC Capital Ideas posts that focus on flood risk and flood events in the Asia Pacific region. 

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Capital Management Developments: Here we review recent GC Capital Ideas’ top stories on capital management. 

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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.

Read the article >>

 

Capital Model Trends: Here we highlight recent stories that have appeared on GC Capital Ideas discussing trends around capital models.

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Most Popular Keyword:   risk profile

 

And, you may have missed…..

Evolving Risk and Changing Nature of Coverage; Terrorism Coverage and Related Wordings: Since the devastating terrorist attacks of September 11, 2001, the (re)insurance sector has focused primarily on the potential for similar attacks in major metropolitan areas around the world. The threat posed by transnational terrorists, and al-Qaeda in particular, has dominated (re)insurers’ approach to terrorism risks.

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February 7th, 2013

Managing Catastrophe Model Uncertainty, Issues and Challenges

Posted at 1:00 AM ET

major_john_gcciJohn Major, Director of Actuarial Research, GC Analytics®
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Here we repeat our popular series authored by John Major, which focuses on the issues and challenges in managing catastrophe model uncertainty.

Managing Catastrophe Model Uncertainty, Issues and Challenges: Part I, Executive Summary: 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 realization, driven home by model changes and recent unexpected natural catastrophes, can be disconcerting - even frightening - to industry participants. But companies that understand the vagaries of model uncertainty and take a disciplined, holistic approach to managing the catastrophe modeling process are well positioned to adapt and outperform the competition.

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Managing Catastrophe Model Uncertainty, Issues and Challenges: Part II, Natural Cat Modeling, Uncertainty in Cat Model Results: Computerized simulation modeling of the potential impact and risk of natural disasters - from multiple perils - was pioneered by Dr. Don G. Friedman at the Travelers Insurance Company in the 1960s. Figure 2, below, is an example of one of his simulated wind speed maps, circa 1974. In 1987, Karen Clark founded the first cat modeling firm, AIR, and three more firms, RMS, EQECAT and ARA, came on the scene in 1988, 1994 and 1999, respectively. By the early 1990s Guy Carpenter had become a “power user” of cat models and augmented its capabilities by acquiring the intellectual property - and hiring some colleagues of the retiring Dr. Friedman.

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Managing Catastrophe Model Uncertainty, Issues and Challenges: Part III, Using Cat Models: Scenario analysis has a long history in risk management. By examining a set of hypothetical extreme events and asking “what if this were to happen?” management can begin to get a sense of vulnerabilities in the business. But it is hard to assess how realistic a particular scenario might be. Using historical events as the basis for scenarios incorporates the fact that those events did, in fact, occur. They are realistic by definition. And their relative occurrence over time gives a sense of probability.

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Managing Catastrophe Model Uncertainty, Issues and Challenges: Part IV, How Guy Carpenter Can Help: As Karen Clark, founder of AIR and now an independent consultant, has said, “the black box started out as a useful tool for decision making, but then it grew to be very big and very powerful; the black box now makes the decisions.” While somewhat hyperbolic, there is also much truth to this aphorism. Models are tools, and a good tool user understands the strengths and limitations of the tool.

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Click here to view other GC Capital Ideas stories authored by John Major >>