Georg H. Fülles, Head of European Casualty Strategy and Morley Speed, Managing Director
Reinsurance buyers in Continental Europe have complained for decades about an imbalance between property lines and casualty lines in the depth of knowledge and services offered by brokers. Reinsurance broking has predominately been driven by expertise in property lines and, particularly, in the natural catastrophe area. Guy Carpenter has recently closed this gap with its new Casualty Solutions Group (CSG).
The key drivers of the changing risk landscape in casualty lines of business include new economic, technological, socio-political and environmental developments and the growing interdependencies between them. But are we able to control and monitor potential results that may lead to increases in exposure, incurred but not reported reserves, incurred but not enough reported reserves or accumulation of risk within a casualty book? Can we simultaneously define and structure appropriate reinsurance solutions? There is also a changing business environment to consider: liability and regulatory regimes continue to evolve, stakeholder expectations are strengthening and risk perception is shifting.
Insurers and reinsurers may be concerned about lack of awareness of issues and developments that experts are discussing that may affect their books of business. Some of these developments may involve emerging risks, such as new drug side-effects, allergies to chemicals, nanotechnology introducing nano-scale materials into human bodies, bodily injury exposure to radio frequency waves, genetically modified plants and the unforeseeable environmental impact of hydraulic fracturing in natural gas drilling. A new financial crisis or unforeseen changes in legislation may also have a similar bearing. Will your balance sheet survive the potential impact of major tail losses from liability exposures?
Guy Carpenter can assist in development of risk management processes through independent high quality advisory and reinsurance casualty solutions with our new “CSG.” The CSG team is comprised of technical and highly experienced casualty and long tail experts. The group of dedicated casualty practitioners has contacts and representatives in all territories of Continental Europe. The aim has been to create a matrix-structured alignment of client and market-facing broking and actuarial analytics with a strategic vision based on knowledge sharing. The advantage for clients is that they can maintain their personal local contact at Guy Carpenter but also receive additional, enhanced service. CSG experts support the direct broking contact.
The CSG network has the capability to tap into additional or alternative capacity. This feature may be appropriate when clients are concerned about being overly dependent on their leading reinsurer(s). Although in some cases such dependencies may be unavoidable because of the needs associated with other lines of business. Overall, the CSG service helps preserve existing relationships while clients also benefit from the evolving risk appetite of global reinsurers.
CSG brokers and CSG broker support provide know-how in all casualty lines and reinsurance, from private householders liability portfolios to financial lines (directors and officers and errors and omissions) to heavy industrial liability insurance business such as pharmaceutical exposures.
Existing conditions that manifest themselves in new ways or where legal judgments potentially can change liability at a later date are particularly problematic for insurers and reinsurers. CSG provides support regarding reinsurance wordings and reinsurance claims administration in this context.
A dedicated casualty actuarial service from CSG, delivered by our GC Analytics®* team, assesses clients’ existing reinsurance limits, prices and structures. Careful portfolio analysis support is provided to help tailor the client’s reinsurance structure to align with cost forecasts. Also, client facultative needs are addressed via CSG’s direct connection to GC Fac expertise.
The Guy Carpenter CSG team service approach helps clients meet objectives with a focus on underwriting, risk management and structuring tailor-made casualty reinsurance buying, delivering an appropriate program that provides value to the cedent.
*GC Analytics is a registered mark with the U.S. Patent and Trademark Office.