Solvency II on GC Capital Ideas: Here we review recent GC Capital Ideas stories that have touched on issues relating to the Solvency II regime.

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Andrew Cox, Guy Carpenter’s Head of Advisory, EMEA: Here we highlight recent GC Capital Ideas stories authored by Andrew Cox, Head of Advisory, EMEA, at Guy Carpenter.

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Germany: Breach of Contractual Incidental Obligation Due to Gross Negligence Can Release Insurer from Obligation to Pay: The Insurance Contract Act (Versicherungsvertragsgesetz, VVG) contains provisions about risk exclusions and incidental obligations. A risk exclusion means the insurer does not provide insurance cover for a specified excluded risk, and in cases of an incidental obligation, the policyholder loses insurance cover if he/she does not observe the specified incidental obligation.

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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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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.

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Tony Gallagher Appointed Chief Executive Officer of the Pacific Region for Guy Carpenter: Guy Carpenter announced that Tony Gallagher will be appointed Chief Executive Officer of the firm’s Pacific Region effective March 1, 2013. Mr. Gallagher will be based in Sydney and will report to James Nash, CEO of the firm’s Asia Pacific region.

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According to many insured car holders in Poland, insurers have been underestimating compensation for losses, and the majority of auto insurance cases in Poland have been settled for amounts far below the actual costs of restitution. The most frequent reason is that the value of a loss has been determined based on the prices of used spare parts rather than new ones.

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Here we review recent GC Capital Ideas stories that have touched on issues relating to the Solvency II regime.

Continue reading…

Here we highlight recent GC Capital Ideas stories authored by Andrew Cox, Head of Advisory, EMEA, at Guy Carpenter. 

Continue reading…

The Insurance Contract Act (Versicherungsvertragsgesetz, VVG) contains provisions about risk exclusions and incidental obligations. A risk exclusion means the insurer does not provide insurance cover for a specified excluded risk, and in cases of an incidental obligation, the policyholder loses insurance cover if he/she does not observe the specified incidental obligation.

Continue reading…

Tony Gallagher Appointed Chief Executive Officer of the Pacific Region for Guy Carpenter: Guy Carpenter announced that Tony Gallagher will be appointed Chief Executive Officer of the firm’s Pacific Region effective March 1, 2013. Mr. Gallagher will be based in Sydney and will report to James Nash, CEO of the firm’s Asia Pacific region.

Read the article >>

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 >>

BRIC Countries: Here we bring together recent GC Capital Ideas’ posts that have focused on the BRIC (Brazil, Russia, India and China) countries.

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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 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 >>

Assessing Future Reserve Development: By extrapolating reserving trends, it may be possible to assess the sector’s reserve adequacy. Two cyclical patterns are clear.

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Thinking Differently: Opportunities for Profitable Growth: The macroeconomic environment continues to be top-of-mind among insurance leaders. With growth in global real gross domestic product 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.

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Here we bring together recent GC Capital Ideas’ posts that have focused on the BRIC (Brazil, Russia, India and China) countries. 

Increased Flood Loss Potential:  Making use of all available tools and practicing comprehensive exposure management will both strengthen (re)insurers’ ERM practices and allow them to make informed risk management and reinsurance decisions as they enter new markets. Certainly, flood risk is prevalent and increasing in almost every developing economy.

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Lloyd’s: What Will Success Look Like?  If Lloyd’s is successful in achieving the growth and diversification outlined in its near-term and long-term strategic plans, it can expect to capitalize on business opportunities in emerging market economies such as the BRIC countries (Brazil, Russia, India and China). Growth, however, will not necessarily be limited to these markets. Other countries in Southeast Asia, Eastern Europe and Latin America are experiencing strong growth and increasing insurance penetration, and these territories also present attractive opportunities for Lloyd’s.

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Growth Potential in Developing Markets:  Positive premium growth trends in developing markets are expected to be sustained over the next decade. During this time, emerging markets are expected to drive global economic growth, and foreign direct investment in these emerging regions is likely to increase. In Brazil alone, investment in infrastructure is expected to amount to USD550 billion over the next few years as the country prepares to host the soccer World Cup in 2014 and the summer Olympics in 2016. China and India too are expected to continue to see robust growth in the next ten years.

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State of the Reinsurance Market, Part II: Inflation/Deflation Expectations, Investment Returns:  Expansionary monetary policy has fueled concerns that inflation could increase in the medium term, but the picture is less clear in the near term. While consumer price indices in Brazil, Russia, India and China (BRIC), the United States and the rest of the G7 currently exhibit positive trends, consensus forecasts show borderline disinflationary trends in the nearer term in the United States and many developed markets.

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Guy Carpenter announced that Tony Gallagher will be appointed Chief Executive Officer (CEO) of the firm’s Pacific Region effective March 1, 2013. Mr. Gallagher will be based in Sydney and will report to James Nash, CEO of the firm’s Asia Pacific region.

Continue reading…

1. 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.

Read the article >>

2. Managing Catastrophe Model Uncertainty, Issues and Challenges: 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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3. 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 >>

4. Floods in Eastern Australia: 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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5. 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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6. 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.

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7. 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. 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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8. 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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9. 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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10. Capital Management Developments: Here we review recent GC Capital Ideas’ top stories on capital management.

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Thinking Differently: Opportunities for Profitable Growth: The macroeconomic environment continues to be top-of-mind among insurance leaders. With growth in global real gross domestic product 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.

Read the article >>

Assessing Future Reserve Development: 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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Casualty Lines: Here we highlight recent GC Capital Ideas stories that have focused on casualty lines of business.

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Recent Enterprise Risk Management Stories:  Here we highlight recent GC Capital Ideas stories on enterprise risk management.

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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 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 >>

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And, you may have missed…..

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 >>

Click here to register to receive e-mail updates >>