Archive for November, 2016



November 30th, 2016

Sevier County Wildfires

Posted at 3:49 PM ET

sevier_county_wildfires-sm2Wildfire activity has rendered severe impacts to areas of Sevier County, Tennessee including the Gatlinburg and Pigeon Forge areas. The fire activity began late Sunday on Chimney Tops Mountain as a 10 acre fire that grew at an extreme rate Monday evening due to strong, gusty winds. Wind gusts well in excess of 60 mph carried embers a considerable distance to start new fires in extremely dry vegetation from recent drought. Gusty winds also brought trees down onto powerlines sparking new fires in surrounding dry vegetation.

Continue reading…

November 30th, 2016

Chart: What is the Biggest Threat to (Re)insurers’ Plans for Growth?

Posted at 1:00 AM ET

Chart highlights the result of a survey taken of 107 insurance and reinsurance professionals conducted by Guy Carpenter at the 2016 annual meeting of the Property Casualty Insurers Association of America when asked what they see as the biggest threat to their plans for growth.

Continue reading…

November 29th, 2016

Chart: Which Capital Sources Will (Re)insurers Utilize in 2017?

Posted at 1:00 AM ET

Chart highlights the result of a survey taken of 107 insurance and reinsurance professionals conducted by Guy Carpenter at the 2016 annual meeting of the Property Casualty Insurers Association of America when asked which capital sources they will utilize more of in 2017.

Continue reading…

November 28th, 2016

MMC Cyber Risk Handbook 2016: Increasing Resilience in the Digital Economy

Posted at 1:00 AM ET

The Cyber Risk Handbook 2016 presents views from Marsh & McLennan’s cyber leaders and leading third-party experts with whom we collaborate on how companies can assess cyber risks, develop comprehensive strategies and align their people to bolster cyber risk management.

Continue reading…

November 25th, 2016

Week’s Top Stories: November 19 - 25, 2016

Posted at 7:30 AM ET

Measuring Cyber Aggregation Risk: Cyber risk is now an embedded feature of the global risk landscape, and preventative risk management and post-event remediation are gaining importance as shareholders, customers, supply chain partners, and regulators are increasingly focused on how companies are managing for cyber risks. Insurance is becoming an important piece of the strategy for helping businesses address these risks.

Read the article>>


Reserving and Capital Setting: The Crystalization of Emerging Risks: As discussed in the Executive Summary of this report, the term “crystalization of risk” refers to the timescale over which we realize that the risk is manifesting itself and how this view changes until ultimate understanding of quantum is reached and all liabilities are discharged. The “Reserving Risks” section in last year’s report, Ahead of the Curve: Understanding Emerging Risks looked at how information emerges in the presence of reserving cycles. The profit or loss in any particular financial year is made up of not only the profit or loss from the same accident year but also any recognized changes in the reserves on prior years.

Read the article>>


Asia Pacific Catastrophe Report 2016: Executive Summary: Convergence Capital: “Convergence” or “alternative” capital, which first entered the reinsurance market with catastrophe bonds, has grown steadily over the past ten years and now also includes industry loss warranties, sidecars and collateralized reinsurance. Convergence capital now accounts for just under 20 percent of the global catastrophe limit.

Read the article>>


Technology Innovation Identified as Top Growth Opportunity for (Re)insurance Industry in 2017, According to Guy Carpenter Annual Market Pulse Survey: Technology innovation will provide the biggest growth opportunities for (re)insurers in the year ahead, according to a survey released today by Guy Carpenter & Company. Now in its fifth year, the annual survey polled executives from insurance and reinsurance companies during the 2016 Property Casualty Insurers Association of America (PCIAA) Annual Meeting held in Dallas, Texas. The goal of this year’s survey was to identify the top opportunities and threats to profitable growth in the year ahead, as well as examine the most significant disruptive forces impacting the industry.

Read the article>>


Chart: Regional Property Catastrophe ROL Index, 1990 to 2016: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

Read the article>>


And, You May Have Missed…

Increasing Confidence and Transparency in Your Catastrophe Risk Decisions: Could you afford to find that the portfolio you just acquired in North Carolina is more exposed to hurricane than previously assumed? What if next year’s Category 2 hurricane caused a loss in excess of 15 percent of your policyholders’ surplus?  How will the changes in the U.S. Geological Survey National Seismic Hazard Maps impact your exposure to earthquake risk in the central and eastern United States?

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 LLC, 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 LLC, 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.

November 24th, 2016

GC Capital Tip: Talk to the Author

Posted at 1:00 AM ET

Do you have a question about one of our articles? If so, contact us. Longer articles on GC Capital Ideas have a “contact” link right at the top. Clicking it will open your e-mail program and provide the appropriate address and subject line, so we can route your inquiry to the best source. If the e-mail software you use is not configured for this, e-mail us at: guy_carpenter@guycarp.com.

Continue reading…

November 23rd, 2016

Measuring Cyber Aggregation Risk

Posted at 1:00 AM ET

Julia Chu, Managing Director, Guy Carpenter and Ashwin Kashyap, Director of Product Management, Symantec Corporation

Contact

Cyber risk is now an embedded feature of the global risk landscape, and preventative risk management and post-event remediation are gaining importance as shareholders, customers, supply chain partners, and regulators are increasingly focused on how companies are managing for cyber risks. Insurance is becoming an important piece of the strategy for helping businesses address these risks.

Continue reading…

November 22nd, 2016

Reserving and Capital Setting: Conclusion

Posted at 1:00 AM ET

The obvious response to the issues emerging risks provide is to make sure reserves and capital position are more than robust enough for any eventuality - however remote - and then release them when the risks fail to materialize. But, there are many arguments against this as a practical strategy:

Continue reading…

November 21st, 2016

Reserving and Capital Setting: The Crystalization of Emerging Risks, Part II

Posted at 1:00 AM ET

The chart below attempts to illustrate the solvency calculation issue. Suppose the best estimate is 20 and the assessment from modeling is that the 1-in-200-year ultimate loss is 100. If all else stays the same and with the simplifying assumption that the yield curve stays flat, one can say that the sum of the 1-year solvency capital requirements (SCRs) approximated the difference between 100 and 20 (i.e. 80). Yet, because of the discounting, when in time the change in own funds is recognized, is important. The black line represents a linear recognition pattern so the 1-year SCRs are all equal with increments of 10. The blue line represents a Binary Fast recognition so the first year SCR is 80 and the remaining years’ SCR are zero. This means that the deterioration is recognized quickly. The red line again shows binary recognition but with a slow pattern as the movement is only occurring toward the end of the liabilities’ life. The two curves in light blue and light red represent less severe versions of the binary forms.

Continue reading…

November 18th, 2016

Week’s Top Stories: November 12 - 18, 2016

Posted at 7:30 AM ET

7.8 Mw Earthquake in New Zealand: A magnitude (Mw) 7.8 earthquake struck central New Zealand on November 13, according to the U.S. Geological Survey (USGS). The quake occurred at 11:02 PM local time (11:02 UTC) about 93 kilometers (57 miles) north-northeast of Christchurch and about 215 kilometers (133 miles) southwest of Wellington.

Read the article>>


Asia Pacific Catastrophe Report 2016: Executive Summary: Volcano Potential in Asia Pacific: Later in 2016, Guy Carpenter plans to release a report on the potential for losses caused by volcanic eruption across the region and the implications from an insurance point of view.

Read the article>>


Technology Innovation Identified as Top Growth Opportunity for (Re)insurance Industry in 2017, According to Guy Carpenter Annual Market Pulse Survey: Technology innovation will provide the biggest growth opportunities for (re)insurers in the year ahead, according to a survey released by Guy Carpenter & Company. Now in its fifth year, the annual survey polled executives from insurance and reinsurance companies during the 2016 Property Casualty Insurers Association of America (PCIAA) Annual Meeting held in Dallas, Texas. The goal of this year’s survey was to identify the top opportunities and threats to profitable growth in the year ahead, as well as examine the most significant disruptive forces impacting the industry.

Read the article>>


Reserving and Capital Setting: The Crystalization of Emerging Risks: As discussed in the Executive Summary of this report, the term “crystalization of risk” refers to the timescale over which we realize that the risk is manifesting itself and how this view changes until ultimate understanding of quantum is reached and all liabilities are discharged. The “Reserving Risks” section in last year’s report, Ahead of the Curve: Understanding Emerging Risks looked at how information emerges in the presence of reserving cycles. The profit or loss in any particular financial year is made up of not only the profit or loss from the same accident year but also any recognized changes in the reserves on prior years.

Read the article>>


Managing Catastrophe Model Uncertainty, Issues and Challenges: Here we repeat our series authored by John Major, which focuses on the issues and challenges in managing catastrophe model uncertainty.

Read the article>>


And, You May Have Missed…

Strategic Growth Analysis - The Guy Carpenter Approach: The changes in today’s property and casualty (P&C) insurance marketplace present insurers with many challenges to capital management and risk transfer techniques. Insurers are compelled to leverage their capital positions to increase and diversify their market shares to an unprecedented degree.  Preserving the status quo is not an option for long-term viability.  Profitable growth is a key priority for companies seeking additional return.  Companies need to enter new lines of business or geographies strategically with proper analysis. Guy Carpenter offers proprietary analytical tools, intellectual capital and expertise to help companies determine and evaluate their growth plans while maintaining an acceptable level of risk and profitability.

Read the article>>


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