Archive for April, 2013



April 30th, 2013

Chart: Estimated Reinsurance Premium (Including Life) Growth by Region

Posted at 1:00 AM ET

While reinsurance premiums remained broadly stable in the established markets of the United States, Canada and Western Europe between 2007 and 2011, strong growth has been recorded in emerging market regions, particularly China, India and other countries in South and East Asia.

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April 29th, 2013

GC Securities* Completes Catastrophe Bond Bosphorus 1 Re Ltd. Series 2013-1 Notes for the Turkish Catastrophe Insurance Pool

Posted at 11:00 PM ET

GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/SIPC, today announced the placement of the Series 2013-1 Notes, with notional principal at $400,000,000, through a newly formed catastrophe bond shelf program, Bosphorus 1 Re Ltd., to benefit the Turkish Catastrophe Insurance Pool (TCIP). This is the first time that the TCIP has directly utilized the cat bond market to manage its earthquake risks in the Istanbul region.

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April 28th, 2013

Stephen C. Mathews Joins GC Securities*

Posted at 11:00 PM ET

Guy Carpenter & Company, LLC, the leading global risk and reinsurance specialist, today announced that Stephen C. Mathews has been appointed Managing Director of GC Securities*, effective immediately.  Mr. Mathews is based in New York and reports to Chris Ezbiansky, Head of M&A Advisory - Americas. 

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April 26th, 2013

Week’s Top Stories: April 20 - 26, 2013

Posted at 9:00 AM ET

Reinsurance Pricing Trends:  Here we review recent GC Capital Ideas posts that have focused on 2013 reinsurance pricing trends.

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Chart: Global Flood Risks and Flood Model Coverage by Three Main Modeling Vendors: Flood risk is poorly modeled at a global level, particularly in developing countries where flooding is a regular occurrence.

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April 1 Renewals See Reinsurance Pricing Stabilize amid Dynamic Capital Growth: Guy Carpenter reports that dynamic capital growth and ample reinsurance capacity resulted in a relatively stable renewal at April 1, 2013. In a briefing released today, Guy Carpenter comments that the convergence of traditional and alternative capital sources is changing the marketplace, with non-traditional capacity now making up an estimated 14 percent of global property catastrophe limit.

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Chart: Natural Catastrophe Insured Losses by Region: Thirty-five percent of insured natural catastrophe losses between 2009 and 2011 were located in Asia while only 33 percent were in the United States. Australia and New Zealand also saw a marked increase in natural catastrophe insured losses during this period, with 19 percent of the total. This is in stark contrast to the long-term trend of more than three-quarters of all insured natural catastrophe losses occurring in the United States.

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Chart: Five Most Expensive Earthquakes for Insurers: Over the last two years, several powerful earthquakes have caused widespread damage, leading to significant losses for (re)insurers. Four out of the five most costly earthquakes on record have occurred since the start of 2010, and all four of these events were located outside the United States.

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Chart: Ratio of Insured Loss to Economic Loss from Recent Earthquake Events: Earthquake insurance coverage in developed and emerging economies varies widely, and earthquake coverage can be low, even in certain established markets. Of all the earthquakes that have caused economic losses over USD1 billion over the last three years, only events in New Zealand and Chile saw the (re)insurance sector contribute more than 25 percent of the overall cost.

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April 25th, 2013

Chart: Global Flood Risks and Flood Model Coverage by Three Main Modeling Vendors

Posted at 1:00 AM ET

Flood risk is poorly modeled at a global level, particularly in developing countries where flooding is a regular occurrence. 

Continue reading…

April 24th, 2013

Chart: Natural Catastrophe Insured Losses by Region

Posted at 1:00 AM ET

Thirty-five percent of insured natural catastrophe losses between 2009 and 2011 were located in Asia while only 33 percent were in the United States. Australia and New Zealand also saw a marked increase in natural catastrophe insured losses during this period, with 19 percent of the total. This is in stark contrast to the long-term trend of more than three-quarters of all insured natural catastrophe losses occurring in the United States.

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April 23rd, 2013

Italian Court Decision Encourages Strict Compliance with Industrial Safety Regulations

Posted at 1:00 AM ET

On December 12, 2007, there was a fire in an industrial plant in Turin that was owned and managed by ThyssenKrupp Acciai Speciali Terni S.p.a. (ThyssenKrupp), an Italian subsidiary of ThyssenKrupp Stainless group. The violent fire occurred in a cold annealing and pickling line, called APL5, where there is typically a significant amount of lubricant oil and paper, as well as sparks generated by the plant’s industrial process.

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April 22nd, 2013

Reinsurance Pricing Trends

Posted at 1:00 AM ET

Here we review recent GC Capital Ideas posts that have focused on 2013 reinsurance pricing trends.

April 1 Renewals See Reinsurance Pricing Stabilize Amid Dynamic Capital Growth: Guy Carpenter reports that dynamic capital growth and ample reinsurance capacity resulted in a relatively stable renewal at April 1, 2013. In a briefing released today, Guy Carpenter comments that the convergence of traditional and alternative capital sources is changing the marketplace, with non-traditional capacity now making up an estimated 14 percent of global property catastrophe limit.

Read the article >>

 

Japan Values Long-Term Continuity: As in every past year, Japanese (re)insurers look to the January 1, 2013, reinsurance renewal for guidance as to the likely state of the market for their renewals at April 1. This year they will have been encouraged with a market characterized by excess capital, overcapacity and easing prices for loss-free business. This scenario is evidenced by the Guy Carpenter Global Property Catastrophe Reinsurance Rate on Line index, which fell at renewal, albeit marginally. This environment will come as a welcome change to Japanese buyers, who have fought their way through the last two renewals against adverse market conditions caused by a series of significant losses in the Asia Pacific region.

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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.

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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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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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April 19th, 2013

Week’s Top Stories: April 13 - 19, 2013

Posted at 8:00 AM ET

Chart: Five Most Expensive Earthquakes for Insurers: Over the last two years, several powerful earthquakes have caused widespread damage, leading to significant losses for (re)insurers. Four out of the five most costly earthquakes on record have occurred since the start of 2010, and all four of these events were located outside the United States.

Read the article >>

 

Chart: Ratio of Insured Loss to Economic Loss from Recent Earthquake Events:  Earthquake insurance coverage in developed and emerging economies varies widely, and earthquake coverage can be low, even in certain established markets. Of all the earthquakes that have caused economic losses over USD1 billion over the last three years, only events in New Zealand and Chile saw the (re)insurance sector contribute more than 25 percent of the overall cost.

Read the article >>

 

Chart: Countries Operating Compulsory or Optional Terrorism Pools: A summary of the compulsory and optional terrorism pools that operate around the globe.

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April 1 Renewals See Reinsurance Pricing Stabilize Amid Dynamic Capital Growth: Guy Carpenter reports that dynamic capital growth and ample reinsurance capacity resulted in a relatively stable renewal at April 1, 2013. In a briefing released today, Guy Carpenter comments that the convergence of traditional and alternative capital sources is changing the marketplace, with non-traditional capacity now making up an estimated 14 percent of global property catastrophe limit.

Read the article >>

 

Update: Explosions - Boston Back Bay Area: Two explosions in Boston, Massachusetts killed at least three people and injured more than 140 on Monday, April 15. Both explosions occurred in the Boston Back Bay area at about 2:50 PM EDT. The blasts occurred near the finishing line of the Boston Marathon, some four hours into the race. One blast occurred near a sports store and the other close to a viewing stand, near 673 Boylston Street at the intersection of Boylston and Exeter. Details around the explosions are still incomplete but the Federal Bureau of Investigation (FBI) has launched a “criminal investigation that is a potential terrorist investigation.”

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Legislation Surrounding Insurance Covering Terrorist Acts: Here we review past GC Capital Ideas stories that have focused on legislation surrounding insurance covering terrorist acts.

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April 18th, 2013

Texas Fertilizer Plant Explosion

Posted at 12:52 PM ET

west-tx-smallA fire at a fertilizer plant in West, Texas (about 80 miles southeast of Dallas) sparked a deadly explosion that killed an estimated five to 15 people and injured more than 160 on Wednesday April 17. According to reports, the explosion occurred at approximately 8:00 PM CDT (01:00 UTC). Prior to the blast, a fire was reported at the plant. A reported 50 to 75 homes were destroyed, as well as a 50-unit apartment complex. A nursing home and middle school were also reported to have severe damage. While officials have not determined a cause for the explosion, they do not believe that foul play was involved.

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