Archive for September, 2015



September 30th, 2015

Disruptive Forces to M&A Activity: Soft Market Rates Have Had Limited Impact on Company Returns

Posted at 1:00 AM ET

A key tenet of the anti-correlation theory is that the impact of lower (re)insurance rates will eventually be felt within carriers’ return on equity, thereby forcing action.

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September 29th, 2015

Disruptive Forces to Merger & Acquisition Activity: Globalization

Posted at 1:00 AM ET

Globalization in the insurance industry has historically been characterized by North American companies seeking to expand their business models to Europe, with Asia and South America as their secondary focus. European companies have sought to expand into North America, Asia and Latin America (for Spanish and Portuguese speaking companies).

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September 28th, 2015

Capital With Alternative Strategic Interests Competing For Merger & Acquisition Opportunities

Posted at 1:00 AM ET

While the alternative capital entering reinsurance markets has spurred transactions in accordance with the anti-correlation theory, other investors that have entered the market via acquisition of businesses have certainly blurred the theory’s parameter of the required level of underwriting margin.

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September 25th, 2015

Week’s Top Stories: September 19 - 25, 2015

Posted at 7:00 AM ET

Disruptive Forces to M&A Activity: Alternative Capital Directly Supporting Increased Market Competition: The flow of alternative capital into the reinsurance markets has been sustained and substantial. The growth of this capital, coming from a number of sources, including fund managers and sidecars, has been a staggering 22 percent - compounding since 2008 and accelerating to 34 percent during the period 2012 to 2014. There was a consequent rate softening, mostly felt within the reinsurance landscape, particularly in short tail lines. The softening then trickled down into the specialty insurance classes.

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Chart: Private Cat Bond Market, First Half, 2015: Chart shows the private catastrophe bond market with USD 753.1 million of limit placed in rule 4(2) private placement format via fifteen transactions in the first six months of 2015. The 2015 year-to-date volume exceeded total full-year issuance in 2014 of USD 561.5 million.

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Guy Carpenter Examines Emerging Risks Impacting the (Re)insurance Industry: Guy Carpenter published a new report, A Clearer View of Emerging Risks, which examines four key areas where risks continue to emerge or are largely unknown.

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GC Capital Ideas Recent CAT-i Stories: Here are recent CAT-i stories from the period July to mid-September of 2015.

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Solvency II Horizon: Challenges and Strategic Impact: After a long period of discussion and many delays, the new European insurance regulatory regime, Solvency II, will commence in January 2016. The rules will be compulsory for all insurance and reinsurance companies and groups in the European Economic Area. The Solvency II rules were developed over a period of more than 15 years, and there are many reasons for the long delay. Two notable reasons are differing business models from country to country and pressure on long-term guarantee products in the private pension system created by the low interest rate environment.

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And, You May Have Missed…

PA/MGA Program Size: The average size of programs targeted by carriers has changed to reflect economic, rate adequacy and expense factors. Carriers remain more flexible with their program minimum premium requirements, their willingness to consider startup programs, their willingness to front and the territorial scope in which they are willing to write business.

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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.

September 24th, 2015

Chart: 144A P&C Cat Bonds, First Half, 2015

Posted at 1:00 AM ET

Chart shows that as of July 1, 2015, USD 21.559 billion of P&C 144A catastrophe bond risk capital was outstanding.

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September 23rd, 2015

Chart: Private Cat Bond Market, First Half, 2015

Posted at 1:00 AM ET

Chart shows the private catastrophe bond market with USD 753.1 million of limit placed in rule 4(2) private placement format via fifteen transactions in the first six months of 2015. The 2015 year-to-date volume exceeded total full-year issuance in 2014 of USD 561.5 million.

Continue reading…

September 22nd, 2015

GC Capital Ideas Recent CAT-i Stories

Posted at 1:00 AM ET

Here are recent CAT-i stories from the period July to mid-September of 2015.

Continue reading…

September 21st, 2015

Disruptive Forces to M&A Activity: Alternative Capital Directly Supporting Increased Market Competition

Posted at 1:00 AM ET

The flow of alternative capital into the reinsurance markets has been sustained and substantial. The growth of this capital, coming from a number of sources, including fund managers and sidecars, has been a staggering 22 percent - compounding since 2008 and accelerating to 34 percent during the period 2012 to 2014. There was a consequent rate softening, mostly felt within the reinsurance landscape, particularly in short tail lines. The softening then trickled down into the specialty insurance classes.

Continue reading…

September 18th, 2015

Week’s Top Stories: September 12 - 18, 2015

Posted at 7:00 AM ET

Guy Carpenter Examines Emerging Risks Impacting the (Re)insurance Industry: Guy Carpenter published a new report, A Clearer View of Emerging Risks, which examines four key areas where risks continue to emerge or are largely unknown.

Read the article>> 

 

Solvency II Horizon: Challenges and Strategic Impact: After a long period of discussion and many delays, the new European insurance regulatory regime, Solvency II, will commence in January 2016. The rules will be compulsory for all insurance and reinsurance companies and groups in the European Economic Area. The Solvency II rules were developed over a period of more than 15 years, and there are many reasons for the long delay. Two notable reasons are differing business models from country to country and pressure on long-term guarantee products in the private pension system created by the low interest rate environment.

Read the article>> 

 

Guy Carpenter Assesses Implications of Current Market Dynamics on Pricing Environment: Challenging market conditions due to abundant capacity, the ongoing influx of new capital and limited loss experience, continue to put pressure on the reinsurance sector, while recent M&A activity is adding a new dynamic to the mix. This is according to the panel of speakers at the eighth annual press briefing held at the Reinsurance Rendez-Vous 2015 in Monte Carlo, by Guy Carpenter & Company, LLC, a leading global risk and reinsurance specialist and a wholly owned subsidiary of Marsh & McLennan Companies.

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Mergers and Acquisitions Developments: New capital inflows, excess capacity and benign catastrophe loss activity have contributed to falling (re)insurance prices and a challenging environment for specialty (re)insurers. These combined factors have been the rationale for predictions of a wave of market consolidation, which appear to have become a reality during 2015 as a series of rumors and announcements grabbed the headlines.

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Transferring Public-Held Risk to the Private Sector Markets: Fiscal constraints are increasing across many developed and emerging economies amid growing catastrophic loss potential brought on by the geopolitical climate, demographic trends and global climate change. As a result, heads of government, international trade organizations and private sector risk bearers are increasing their calls to reexamine the roles and responsibilities of society to better manage these complicated risks.

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And, You May Have Missed… 

Dynamic Cat Bond Environment in First Half of 2015: A high-volume of maturities coupled with a diverse and steady stream of new issuances created a dynamic catastrophe bond environment in the first six months of 2015. 

Read the article>> 

 

Click here to register to receive e-mail updates>> 

 

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.

September 17th, 2015

8.3 Mw Earthquake near Illapel, Chile

Posted at 2:40 PM ET

83eq-illapel-chile-smChile experienced an 8.3-magnitude earthquake on September 16, followed by dozens of aftershocks, including one at magnitude 7.0 and seven at magnitude 6.0 or above. According to the U.S. Geological Survey (USGS), the earthquake occurred near the coast of Coquimbo, about 46 kilometers (29 miles) west of Illapel at 19:54 local time. A tsunami warning was issued for the entire coast of Chile but has since been lifted. Initial media reports indicate at least 11 fatalities, although emergency crews are still accessing affected areas. The earthquake has forced more than one million people to evacuate from their homes and electrical power was cut off to 240,000 households. Heavy waves following the earthquake caused flooding in coastal towns although most buildings were reported to hold up well. The USGS pager service estimates most probable economic losses between USD 100 million and USD 1 billion. Our first thoughts and concerns are with those directly affected by this event.

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