Many of the products people use every day are made in foreign countries - from coffee makers produced in China to cars built in Germany to cell phones manufactured in India. While many of these products fulfill their purpose without any complications, there are others that cause problems for their users. A coffee maker might spill boiling water or a car’s airbag might not open properly. These problems can be caused by manufacturing errors or flaws in product design.

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1. April 1 Renewals See Reinsurance Pricing Stabilize amid Dynamic Capital Growth: Guy Carpenter reports that dynamic capital growth and ample reinsurance capacity resulted in a relatively stable renewal at April 1, 2013. In a briefing released today, Guy Carpenter comments that the convergence of traditional and alternative capital sources is changing the marketplace, with non-traditional capacity now making up an estimated 14 percent of global property catastrophe limit.

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2.  Chart: Five Most Expensive Earthquakes for Insurers: Over the last two years, several powerful earthquakes have caused widespread damage, leading to significant losses for (re)insurers. Four out of the five most costly earthquakes on record have occurred since the start of 2010, and all four of these events were located outside the United States.

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3. What About the “S” in ORSA? Actuaries Raise Their Hands: At the 2012 Casualty Actuarial Society (CAS) Annual Meeting in Orlando, Florida, the general session, “Economic Capital Modeling for ORSA in the U.S. Property and Casualty (P&C) Industry:  The Stakeholders Convene,” afforded participants a novel opportunity to satisfy their continuing education credits. In that session, attendees hypothetically viewed the P&C industry as a single large company. Audience members were shareholders and session panelists adopted various executive and leadership roles in the company.

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4. Chart: Ratio of Insured Loss to Economic Loss from Recent Earthquake Events: Earthquake insurance coverage in developed and emerging economies varies widely, and earthquake coverage can be low, even in certain established markets. Of all the earthquakes that have caused economic losses over USD1 billion over the last three years, only events in New Zealand and Chile saw the (re)insurance sector contribute more than 25 percent of the overall cost.

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5.  January 1, 2013 Renewals Bring Stable Reinsurance Pricing: Guy Carpenter reports that the reinsurance sector enters 2013 equipped with ample dedicated capital and stable pricing. In its 2013 global renewal report, The Route to Profitable Growth, Guy Carpenter finds that the January 1, 2013 renewals took place against a stable backdrop, with only loss-affected lines and select regions experiencing price volatility. The market was supported by a combination of factors including lower than normal catastrophe losses during the first nine months of 2012, new reinsurance capacity and record-high levels of capital.

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6. Reinsurance Pricing Trends: Here we review recent GC Capital Ideas posts that have focused on 2013 reinsurance pricing trends.

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7. Oliver Wyman Report: Recovery and Resolution Plans for Insurers: When banks in Europe and the United States became unable to honor their financial obligations in 2007 and 2008, governments bailed them out. But why? The standard answer is that politicians faced a terrible choice. They had to choose between saving insolvent banks largely “as is” in the short-term, or unleashing economic chaos. Recovery and Resolutions Plans (RRPs) are supposed to stop such a dilemma arising again.

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8. Chart: Global Flood Risks and Flood Model Coverage by Three Main Modeling Vendors: Flood risk is poorly modeled at a global level, particularly in developing countries where flooding is a regular occurrence.

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9. Marsh United States Insurance Market Report 2013: Guy Carpenter sister company Marsh’s 2013 United States Insurance Report reveals that although U.S. commercial insurance rates are expected to continue firming in many lines of business and industry sectors in 2013, traditional signs of a conventional hard market are not evident as price increases are not uniform, capacity is plentiful and competition among insurers remains intense.

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10. Chart: Countries Operating Compulsory or Optional Terrorism Pools: A summary of the compulsory and optional terrorism pools that operate around the globe.

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On December 12, 2007, there was a fire in an industrial plant in Turin that was owned and managed by ThyssenKrupp Acciai Speciali Terni S.p.a. (ThyssenKrupp), an Italian subsidiary of ThyssenKrupp Stainless group. The violent fire occurred in a cold annealing and pickling line, called APL5, where there is typically a significant amount of lubricant oil and paper, as well as sparks generated by the plant’s industrial process.

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Micah Woolstenhulme, Senior Vice President
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This post is Part II of an earlier post that reviewed a session held at the Casualty Actuarial Society Annual Meeting.  In that session, attendees hypothetically viewed the P&C industry as a single large company. Audience members were shareholders and session panelists adopted various executive and leadership roles in the company. The meeting’s task was to vet an economic capital model before the board of directors, allowing individual shareholders the freedom to openly question the model’s input and results. This model, if properly developed and embedded into the company’s strategic management, would represent a key component of the Own Risk and Solvency Assessment (ORSA) Summary Report that will be required of large companies in the industry as early as 2015. Along the way, the presentation and board discussion were interrupted to poll the audience members on several interesting questions.

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Micah Woolstenhulme, Senior Vice President
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At the 2012 Casualty Actuarial Society (CAS) Annual Meeting in Orlando, Florida, the general session, “Economic Capital Modeling for ORSA in the U.S. Property and Casualty (P&C) Industry:  The Stakeholders Convene,” afforded participants a novel opportunity to satisfy their continuing education credits. In that session, attendees hypothetically viewed the P&C industry as a single large company. Audience members were shareholders and session panelists adopted various executive and leadership roles in the company.

Continue reading…

1. Marsh United States Insurance Market Report 2013: Guy Carpenter sister company Marsh’s 2013 United States Insurance Report reveals that although U.S. commercial insurance rates are expected to continue firming in many lines of business and industry sectors in 2013, traditional signs of a conventional hard market are not evident as price increases are not uniform, capacity is plentiful and competition among insurers remains intense.

Read the article >>

2. January 1, 2013 Renewals Bring Stable Reinsurance Pricing: Guy Carpenter reports that the reinsurance sector enters 2013 equipped with ample dedicated capital and stable pricing. In its 2013 global renewal report, The Route to Profitable Growth, Guy Carpenter finds that the January 1, 2013 renewals took place against a stable backdrop, with only loss-affected lines and select regions experiencing price volatility. The market was supported by a combination of factors including lower than normal catastrophe losses during the first nine months of 2012, new reinsurance capacity and record-high levels of capital.

Read the article >>

3. Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

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4. Tony Gallagher Appointed Chief Executive Officer of the Pacific Region for Guy Carpenter: Guy Carpenter announced that Tony Gallagher will be appointed Chief Executive Officer of the firm’s Pacific Region effective March 1, 2013. Mr. Gallagher will be based in Sydney and will report to James Nash, CEO of the firm’s Asia Pacific region.

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5. Extension of Guy Carpenter’s Asia Flood Model to China: Floods are among the most destructive hazards and as more people move to urban areas, flooding is having a growing impact on larger populations and economic losses.

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6. Solvency II on GC Capital Ideas: Here we review recent GC Capital Ideas stories that have touched on issues relating to the Solvency II regime.

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7. Chart Room: Reserve Cycle, General Liability Claims Made and Products Liability Claims Made: The lines have begun to show deteriorating results in the most recent accident years.

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8. BRIC Countries: Here we bring together recent GC Capital Ideas’ posts that have focused on the BRIC (Brazil, Russia, India and China) countries.

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9. Approaching April Renewals: As we approach the April 1 Japan reinsurance renewals, we review recent GC Capital Ideas stories focusing on Asia Pacific.

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10. Chart: Guy Carpenter Global Rate on Line Index, January 2013: The Guy Carpenter Global Property Catastrophe Reinsurance Rate on Line index fell marginally at the January 1, 2013, renewal. This is the seventh consecutive annual renewal in which changes to the index have equaled 10 percent or less, indicating a global market with capacity appropriate to meet demand.

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Here we present recent GC Capital Ideas stories focusing on profitable growth. 

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The lines have begun to show deteriorating results in the most recent accident years. 

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Guy Carpenter sister company Marsh’s 2013 United States Insurance Report reveals that although U.S. commercial insurance rates are expected to continue firming in many lines of business and industry sectors in 2013, traditional signs of a conventional hard market are not evident as price increases are not uniform, capacity is plentiful and competition among insurers remains intense. 

Continue reading…

According to many insured car holders in Poland, insurers have been underestimating compensation for losses, and the majority of auto insurance cases in Poland have been settled for amounts far below the actual costs of restitution. The most frequent reason is that the value of a loss has been determined based on the prices of used spare parts rather than new ones.

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