Archive for September, 2013



September 30th, 2013

Capital Growth

Posted at 1:00 AM ET

thumbnail-midGuy Carpenter is pleased to present our mid-year report on the reinsurance market at a time of dynamic capital growth in the sector. The reinsurance marketplace has undergone significant change since early 2012 as investors continue to supply capacity through a convergence of alternative and traditional vehicles. This new supply has changed the nature of the sector’s capital structure. It has also exerted downward pressure on reinsurance pricing, thereby delivering a more cost efficient source of risk transfer.

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September 27th, 2013

Week’s Top Stories: September 21 - 27, 2013

Posted at 8:00 AM ET

Changing Hazard Landscape: Severe Convective Storms: No observable trends have been detected in the United States with either tornado or hail climatology, according to the scientific literature at large and the IPCC. The tornado events of the very active 2011 season are not unprecedented in history. Such outbreaks have occurred before - in 1974, for example, and such outbreaks will occur again.

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Global Warming: Losses: Economic losses resulting from natural disasters increased from USD75.5 billion in the 1960s to USD659.9 billion in the 1990s. Insured losses have also increased, and “the dominant signal is of significant increase in the values of exposure.” Furthermore, the IPCC states that “failure to adjust for time-variant economic factors yields loss amounts that are not directly comparable and a pronounced upward trend for purely economic reasons.” As an example, the recent “trend” in hurricane losses for the coastal United States becomes indistinguishable when normalized by inflation and population density.

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Guy Carpenter Mid-Year Report Highlights Catalysts for Growth in the (Re)insurance Industry: Guy Carpenter released its mid-year market report, highlighting a time of dynamic capital growth in the reinsurance industry. As investors supply capacity through a convergence of alternative and traditional vehicles, the report details the ways in which this new supply of capital and excess capacity has changed the nature of the sector’s capital structure.

Read the article >>

 

Effective Enterprise Risk Management: With Solvency II and similar regimes in place and still on the horizon in some countries, and the continuing evolution of rating agency requirements, the last decade has seen the (re)insurance industry fully embrace the practice of enterprise risk management (ERM). As a trusted advisor to (re)insurers globally, Guy Carpenter has observed firsthand what it takes to implement ERM successfully. An ERM program’s effectiveness may be enhanced with the benefit of adherence to a set of simple tenets.

Read the article >>

 

July 1 Renewals Indicate Downward Pressure on Reinsurance Rates Likely to Continue through 2013: Guy Carpenter & Company reports that reinsurance market rates on line (ROLs) continued to be driven by an influx of capital from third-party investors at the July 1 renewals, in spite of catastrophe losses reaching approximately USD20 billion during the first six months of 2013 (above the ten-year average for the period). In a briefing released today, Guy Carpenter comments that robust catastrophe bond, sidecar and collateralized reinsurance activity throughout the year has for the first time pushed pricing in the capital markets to “decouple” or breakaway from levels set by the traditional market. This has in turn prompted downward pressure on overall traditional market pricing.

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Most Popular Keyword:  storm surge France

 

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Floods in Colorado, United States: A period of excessive rainfall between September 10 and 15 has triggered excessive flooding in Northeastern Colorado. Rainfall has exceeded five inches over a very large area, and some local rainfall amounts have exceeded 15 inches. Damage has occurred as a result of rushing water and inundation, affecting homes, businesses and infrastructure over a large area.

Read the article >>

 

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September 27th, 2013

Global Warming: Adaptation Measures

Posted at 1:00 AM ET

The Intergovernmental Panel on Climate Change (IPCC) publications represent scientific consensus among many of the world’s top scientists (and scientific consensus is difficult to achieve). Their findings are generally consistent with the broader scientific literature.

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September 26th, 2013

Global Warming: Losses

Posted at 1:00 AM ET

Economic losses resulting from natural disasters increased from USD75.5 Billion in the 1960s to USD659.9 Billion in the 1990s (IPCC AR4, 2007 - Working Group II, Section 1.2.8.4). Insured losses have also increased, and “the dominant signal is of significant increase in the values of exposure” (IPCC AR4, 2007 - Working Group II, Section 1.3.8.4). Furthermore, the IPCC states that “failure to adjust for time-variant economic factors yields loss amounts that are not directly comparable and a pronounced upward trend for purely economic reasons.” As an example,the recent “trend” in hurricane losses for the coastal United States becomes indistinguishable when normalized by inflation and population density (Pielke et al., 2008).

Continue reading…

September 25th, 2013

Changing Hazard Landscape: Extratropical Cyclones

Posted at 1:00 AM ET

Extratropical cyclones pose a hazard primarily due to wind and flooding. They can also bring storm surge impacts in coastal regions. Portions of Europe are particularly prone to extratropical cyclone occurrence and these higher counts will naturally include some stronger events by nature of their underlying intensity distributions.

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September 24th, 2013

Changing Hazard Landscape: Tropical Cyclones

Posted at 1:00 AM ET

One of the more controversial discussions of the climate change question has been the subject of tropical cyclones, historical trends and expected shifts under global warming. The questions cannot be easily answered with either observations or climate models, and the subject has been one of heated debate in both scientific and political arenas.

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September 23rd, 2013

Changing Hazard Landscape: Severe Convective Storms

Posted at 1:00 AM ET

No observable trends have been detected in the United States with either tornado or hail climatology, according to the scientific literature at large and the IPCC. The tornado events of the very active 2011 season are not unprecedented in history (Doswell et al., 2012). Such outbreaks have occurred before - in 1974, for example, and such outbreaks will occur again.

Continue reading…

September 20th, 2013

Week’s Top Stories: September 14 - 20, 2013

Posted at 8:00 AM ET

Global Warming: The Evolving Risk Landscape: Global warming is an established scientific fact, and one that cannot be explained by statistical “noise” or natural variability alone. The single greatest threat under global warming is that of sea-level rise, which is expected to increase coastal flood frequency and severity under tropical cyclone, extratropical cyclone and tsunami events. The growing urban footprint and population density in coastal areas amplifies the financial and societal implications of such events. Changing weather patterns will lead to increased risk under flood and drought, with implications for agricultural, wildfire and water resources management.

Read the article >>

 

Effective Enterprise Risk Management: With Solvency II and similar regimes in place and still on the horizon in some countries, and the continuing evolution of rating agency requirements, the last decade has seen the (re)insurance industry fully embrace the practice of enterprise risk management (ERM). As a trusted advisor to (re)insurers globally, Guy Carpenter has observed firsthand what it takes to implement ERM successfully. An ERM program’s effectiveness may be enhanced with the benefit of adherence to a set of simple tenets.

Read the article >>

 

Guy Carpenter Mid-Year Report Highlights Catalysts for Growth in (Re)Insurance Industry: Guy Carpenter released its mid-year market report, highlighting a time of dynamic capital growth in the reinsurance industry. As investors supply capacity through a convergence of alternative and traditional vehicles, the report details the ways in which this new supply of capital and excess capacity has changed the nature of the sector’s capital structure.

Read the article >>

 

Floods in Colorado, United States: A period of excessive rainfall between September 10 and 15 has triggered excessive flooding in Northeastern Colorado. Rainfall has exceeded five inches over a very large area, and some local rainfall amounts have exceeded 15 inches. Damage has occurred as a result of rushing water and inundation, affecting homes, businesses and infrastructure over a large area.

Read the article >>

 

Cyber, Climate Change and Space Highlighted as Critical Emerging Risks in Guy Carpenter Report: Guy Carpenter published a new report highlighting emerging risks facing the (re)insurance sector, including cyber risk, climate change and space risk. The report seeks to identify pressing emerging risks confronting the sector, as well as analyze their implications on businesses and (re)insurers.

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Most Popular Keyword:  adverse development cover on reserves

 

And, you may have missed…..

Guy Carpenter Addresses Market Impact of New Capacity: In its sixth annual press briefing held at the Reinsurance Rendez-Vous 2013 in Monte Carlo, Guy Carpenter & Company, LLC, the leading global risk and reinsurance specialist and member of Marsh & McLennan Companies (NYSE: MMC), considered the impact of new capacity on current market conditions and explored where the opportunities exist for profitable growth in such an environment.

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September 20th, 2013

Changing Weather Patterns - Flood

Posted at 1:00 AM ET

Under global warming, weather patterns will change, leading to increased precipitation for some areas. Even for some areas that see less precipitation on an annual basis, the rainfall may come in more intense bursts. According to the IPCC, “there is limited to medium evidence available to assess climate-driven observed changes in the magnitude and frequency of floods at regional scales because the available instrumental records of floods at gauge stations are limited in space and time, and because of confounding effects of changes in land use and engineering.”

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September 19th, 2013

Changing Weather Patterns - Drought

Posted at 1:00 AM ET

Changing weather patterns will cause changes to precipitation characteristics worldwide. According to the IPCC (IPCC SREX, 2012), “there is medium confidence that some regions of the world have experienced more intense and longer droughts, in particular in southern Europe and West Africa, but in some regions, droughts have become less frequent, less intense, or shorter, for example, in central North America and northwestern Australia.”

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