Guy Carpenter today announced the launch of the Public Sector Specialty Practice. This global team is focused exclusively on the unique risk management needs of governmental agencies and entities.
Approximately 73 percent, or USD2.7 trillion of natural catastrophe losses globally between 1970 and 2014 were uninsured.(1) Unfunded exposure to uninsured property, health, life and employment losses extends well beyond natural catastrophes and includes disasters stemming from man-made and other emerging risks. Cyber-attacks, infectious disease, and environmental accidents are just some of the areas in which public entities are expected to respond despite fiscal constraints.
The creation of private sector pre-financing options will not only relieve the burden on taxpayers and in turn, public finances, but will migrate the management of these catastrophes to insurance and reinsurance companies where claims handling and risk management is core to their operations.
Guy Carpenter’s Public Sector Specialty Practice currently advises approximately 100 public sector engagements that entail pre-event reinsurance mechanisms around the world that address a variety of loss causes including earthquake, hurricane, flood, and terrorism. The Company has engagements that also address a variety of segments in the public sector arena including property, workers compensation, credit, healthcare, and micro-reinsurance. The newly launched Practice was created to address the issue of unfunded liabilities by delivering reinsurance and capital market solutions* and supporting risk analytics that focus on this gap for governments and other public entities.
“Given the increasing challenges associated with risk management and the impact that catastrophic loss can have on the fiscal position and tax base of government entities across the globe, we believe greater coordination is required to manage this risk across the public and private sectors,” commented Britt Newhouse, Chairman of Guy Carpenter and Chair of the Public Sector Specialty Practice. “With our extensive experience, global resources and market insight we are uniquely positioned to help public entities identify the best solutions to transfer this risk to the private sector,” Mr. Newhouse said.
“Public sector entities are grappling with a host of challenging societal pressures that are being exacerbated by changing demographics, such as aging populations and growing exposure to natural and man-made catastrophes,” said Jake Clark, Managing Director and leader of the firm’s Public Sector Practice in North America. “Guy Carpenter believes there is a growing need to build and expand effective public-private partnerships to more effectively manage the challenges associated with catastrophic loss because of the fiscal constraints brought on by unprecedented economic and budgetary burdens, including expanding public sector debt. In many cases these represent unfunded loss exposures that fall on the backs of taxpayers or communities that lack the fiscal resources to efficiently manage them.”
“This unique initiative demonstrates our commitment to the strategic development of public-private partnerships and to increasing the availability of insurance and reinsurance worldwide to tackle this issue through a range of all market solutions,” said Charles Whitmore, the leader of the Property Solutions Group, where Guy Carpenter’s Public Sector Specialty Practice resides in EMEA.
Peter Book, Head of Agriculture Practice for the Asia Pacific Region, will lead this effort in Asia Pacific and Aidan Pope, CEO of Latin America and Caribbean (LAC) Operations, will oversee the team for the LAC region.
Guy Carpenter’s broad global experience makes it uniquely positioned to help governments and other public entities find innovative solutions to unfunded liabilities. Guy Carpenter has the expertise and tools to identify, quantify and help predict the magnitude of risk different parties take whether they are reinsurers, consumers, governments or the financial markets. The Public Sector Specialty Practice will provide unparalleled insights and strategies to help governments and public entities meet the pressing challenges facing them now and in the future.
The global team consists of multi-disciplinary resources from broking, including the Workers Compensation Specialty Practice, the Residual Markets team and GC Analytics. Dedicated resources from GC Securities*, which has pioneered some of the industry’s most innovative catastrophe bonds on behalf of public entities, will also join the practice. In addition to these resources and solutions, Guy Carpenter will harness expertise from other operating companies within Marsh & McLennan: Marsh, Mercer and Oliver Wyman.
1. Swiss Re
*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.