Archive for February, 2014



February 28th, 2014

Week’s Top Stories: February 22 - 28, 2014

Posted at 8:00 AM ET

Global Catastrophe Review, 2013: 2013 provided a respite for the (re)insurance industry following above-average losses in 2011 and 2012, with insured losses from natural catastrophes and man-made disasters estimated at around USD40 billion, according to Guy Carpenter & Company. This is considerably less than the ten-year average loss of approximately USD60 billion and well below the most significant years of 2005 and 2011. This can be partly attributed to the unusually quiet 2013 Atlantic tropical season. About 47 percent of insured losses in 2013 were reported in the Americas, 31 percent in Europe and 20 percent in Asia and Australasia.

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Americas Catastrophe Review, 2013: As with Europe, 2013 was a year of flood in the Americas, with notable events in Alberta, Toronto and Colorado. The flood event in the Calgary, Alberta area of Canada resulted in estimated insured losses of around USD2 billion, with economic losses of USD4.8 billion. This event, combined with flash-flooding in Toronto, Ontario in July, meant Canada experienced its most expensive insured catastrophe loss year on record.

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Deployment of Collateralized Property Catastrophe Capacity: The impact the capital markets have had on the property catastrophe reinsurance space is undeniable. Analyzing 2013 market activity, it is also undeniable that much of the movement the market witnessed is as much driven by traditional reinsurers’ changing behaviors. While companies buying catastrophe coverage benefitted, across product type and geography, from collateralized capacity in the market, deployment of this capacity has been targeted.

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Guy Carpenter Launches Satellite-based Catastrophe Evaluation Service: Guy Carpenter has launched its new satellite-based catastrophe evaluation service, GC CAT-VIEW (SM), with the announcement that it has started using the service to provide clients affected by the recent UK floods with initial insured loss estimates.

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January 2014 Renewal Report: Capacity: Evolution, Innovation and Opportunity: The January 1, 2014 renewal saw rates on line fall significantly in nearly all regions and business segments as relatively low loss experiences, strong balance sheets and an influx of capital spurred competition and innovation in the reinsurance market. This culminated in a marketplace focused on meeting individual client needs as reinsurers reacted to the challenge posed by alternative markets and alternative markets, in turn, sought to deliver unique solutions. Insurers also looked to capitalize by adapting their buying strategies and prioritizing their risk transfer goals.

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And You May Have Missed

Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

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February 26th, 2014

2013 Closes with Near Record Catastrophe Bond Issuance According to GC Securities*

Posted at 11:30 PM ET

GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member of FINRA/SIPC, today released an analysis of activity and trends within the catastrophe risk market from the fourth quarter of 2013, also including the outlook for 2014. According to the report, influence from direct capital markets’ participation in reinsurance programs, coupled with catastrophic insured losses well below historical averages in 2013, put significant pressure on global catastrophic reinsurance pricing. As a result of significantly reduced pricing, relative to recent years, approximately $7.1 billion worth of new property and casualty (P&C) catastrophe bonds were issued in 2013 - the second highest  record year for P&C issuance.

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February 26th, 2014

Chart: Significant Insured Losses

Posted at 1:00 AM ET

Reports insured losses from natural disasters and man-made disasters, 2011 to 2013.

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February 26th, 2014

Chart: Global Catastrophe Insured Losses

Posted at 1:00 AM ET

Chart presents individual measures for natural catastrophes versus man-made catastrophes, 1970 to 2013.

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February 25th, 2014

Deployment of Collateralized Property Catastrophe Capacity

Posted at 1:00 AM ET

mowery_lara_bioLara Mowery, Global Head of Property
Contact

The impact the capital markets have had on the property catastrophe reinsurance space is undeniable. Analyzing 2013 market activity, it is also undeniable that much of the movement the market witnessed is as much driven by traditional reinsurers’ changing behaviors. While companies buying catastrophe coverage benefitted, across product type and geography, from collateralized capacity in the market, deployment of this capacity has been targeted.

Continue reading…

February 24th, 2014

Guy Carpenter Launches Satellite-based Catastrophe Evaluation Service

Posted at 11:30 PM ET

Guy Carpenter today launched its new satellite-based catastrophe evaluation service, GC CAT-VIEWSM, with the announcement that it has started using the service to provide clients affected by the recent UK floods with initial insured loss estimates.

Continue reading…

February 24th, 2014

Americas Catastrophe Review, 2013

Posted at 1:00 AM ET

As with Europe, 2013 was a year of flood in the Americas, with notable events in Alberta, Toronto and Colorado. The flood event in the Calgary, Alberta area of Canada resulted in estimated insured losses of around USD2 billion, with economic losses of USD4.8 billion (1).  This event, combined with flash-flooding in Toronto, Ontario in July, meant Canada experienced its most expensive insured catastrophe loss year on record.

Continue reading…

February 21st, 2014

Week’s Top Stories: February 15 - 21, 2014

Posted at 8:00 AM ET

Global Catastrophe Review, 2013:  2013 provided a respite for the (re)insurance industry following above-average losses in 2011 and 2012, with insured losses from natural catastrophes and man-made disasters estimated at around USD40 billion, according to Guy Carpenter.  This is considerably less than the ten-year average loss of approximately USD60 billion and well below the most significant years of 2005 and 2011. This can be partly attributed to the unusually quiet 2013 Atlantic tropical season.

Read the article >>

 

Chart: Top Ten Catastrophe Bond Transactions: The chart ranks deals in 2013, as compiled by GC Securities*, a division of MMC Securities Corporation.

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January 2014 Renewal Report: Capacity: Evolution, Innovation and Opportunity:  The January 1, 2014 renewal saw rates on line fall significantly in nearly all regions and business segments as relatively low loss experiences, strong balance sheets and an influx of capital spurred competition and innovation in the reinsurance market. This culminated in a marketplace focused on meeting individual client needs as reinsurers reacted to the challenge posed by alternative markets and alternative markets, in turn, sought to deliver unique solutions. Insurers also looked to capitalize by adapting their buying strategies and prioritizing their risk transfer goals.

Read the article >>

 

Chart: Rate Movements by Business Segment:  Reports rate movements at January 1, 2014.

Read the article >>

 

Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for 1990 through 2014.  The index fell by 11 percent at January 1, 2014.

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And, you may have missed

Convergence Capital’s Impact on the Reinsurance Market: The growth in convergence capital has resulted in ILS catastrophe risk pricing decoupling from price expectations in the traditional reinsurance market, with some ILS products now offering the most competitive terms for reinsurance buyers. Strong appetite for U.S. hurricane catastrophe bonds, for example, has tightened spreads in the secondary market by an average of approximately 45 percent on a weighted notional basis since issuance in 2012. Despite the significant decrease in ILS pricing over the last 12 months, investor demand continues to be robust. Indeed, projections by GC Securities indicate that the catastrophe bond market alone could reach USD23 billion by the end of 2016.

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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

February 20th, 2014

Guy Carpenter Launches Cyber Solutions Specialty Practice

Posted at 6:00 AM ET

Guy Carpenter & Company has announced the launch of its Cyber Solutions Specialty Practice, which focuses on the development and delivery of innovative cyber reinsurance solutions to address the rapidly increasing risks associated with cyber security. The practice builds upon Guy Carpenter’s market leadership position and years of experience and market intelligence in this area, and through its team of highly seasoned professionals, helps clients effectively manage their cyber portfolios and grow profitably.

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February 20th, 2014

Asia/Australasia Catastrophe Review, 2013

Posted at 1:00 AM ET

Asia and Australasia also received their share of both natural and man-made catastrophes in 2013. One of the most costly man-made events occurred in China after a major fire hit a large microchip factory in September. The blaze caused significant damage to the SK Hynix-owned facility in the city of Wuxi, with reports saying the cost to the (re)insurance sector is expected to range between USD900 million and USD1 billion. The incident represents the most expensive single-risk loss on record to occur in China.

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