Janis Berger, Managing Director and Spencer Gluck, Senior Vice President
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The convergence of a variety of pressure points at this time is leading to a set of unique circumstances that present opportunities around business strategy and capital allocations for the insurance industry. Future inflation is one of the pressure points. Inflation and uncertainty about its extent and timing is a function of untested but powerful monetary and fiscal policy actions. In addition to inflation’s potential effect on insurer liability management there is also an impact on the volatility of assets backing the liabilities. A reignition of the kind of severe inflation last seen in the 1970s is most likely not factored into any current insurer management practices for establishing reserves or setting capital levels.

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David Rains, FSA, MAAA, Managing Director and Head of Life, Accident & Health Specialty and Ryan Keith, Assistant Vice President
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With the passing of the Patient Protection and Affordable Care Act, the environment for health insurers has drastically changed. What we do know is that these changes will have a significant and immediate impact on every organization conducting business in the health care arena. In order to assess the current situation, brokers throughout Guy Carpenter & Company, LLC reached out to our business partners in all segments of the health care industry. In total, Guy Carpenter spoke with 24 various organizations about the immediate and long term effects of health care reform.

Part I: Introduction:  With the passing of the Patient Protection and Affordable Care Act, the environment for health insurers has drastically changed. Undoubtedly, the wheels of progress move slowly and we have only begun to understand the full impact that the reforms will have on our industry. What we do know is that these changes will have a significant and immediate impact on every organization conducting business in the health care arena.

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Part II: Changes With the Biggest Impact:  In addition to the themes addressed in the introduction, several other specific aspects of health care reform were on the top of most executives’ minds. Based on the feedback received, this article identifies the following seven aspects of health care reform that our business partners identified as having the biggest impact on their organization.

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Guy Carpenter & Company, LLC provides this report for general information only. The information contained herein is based on sources we believe reliable, but we do not guarantee its accuracy, and it should be understood to be general insurance/reinsurance information only. Guy Carpenter & Company, LLC makes no representations or warranties, express or implied. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such. Please consult your insurance/ reinsurance advisors with respect to individual coverage issues.

Readers are cautioned not to place undue reliance on any historical, current or forward-looking statements. Guy Carpenter & Company, LLC undertakes no obligation to update or revise publicly any historical, current or forward-looking statements, whether as a result of new information, research, future events or otherwise.

Statements concerning tax, accounting, legal or regulatory matters should be understood to be general observations based solely on our experience as reinsurance brokers and risk consultants, and may not be relied upon as tax, accounting, legal or regulatory advice, which we are not authorized to provide. All such matters should be reviewed with your own qualified advisors in these areas. 

David Rains, FSA, MAAA, Managing Director and Head of Life, Accident & Health Specialty and Ryan Keith, Assistant Vice President
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In addition to the themes addressed in the introduction, several other specific aspects of health care reform were on the top of most executives’ minds. Based on the feedback received, this article identifies the following seven aspects of health care reform that our business partners identified as having the biggest impact on their organization.

Continue reading…

David Rains, FSA, MAAA, Managing Director and Head of Life, Accident & Health Specialty and Ryan Keith, Assistant Vice President
Contact

With the passing of the Patient Protection and Affordable Care Act, the environment for health insurers has drastically changed. Undoubtedly, the wheels of progress move slowly and we have only begun to understand the full impact that the reforms will have on our industry. What we do know is that these changes will have a significant and immediate impact on every organization conducting business in the health care arena.

Continue reading…

David Rains, FSA, MAAA, Managing Director and Head of Life, Accident & Health Specialty
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Medical

The passage of health reform in the United States has put medical insurers in the challenging position of trying to understand how to manage unlimited lifetime claim maximums. In the short term, annual caps on payments are still allowed, easing the transition, but this change creates increased risk for insurers as volatility is increased and rate-making is necessarily based on assumptions rather than experience. We are seeing increased demand for high attachment medical excess reinsurance with high limits - many clients are looking for unlimited cover to match their required offering. This may create an excellent opportunity for reinsurers willing to step up to the challenge. Many are offering limits from USD10 million to USD20 million attaching at excess of USD5 million. A few reinsurers have come forward with unlimited coverage. Pricing is varying widely between carriers but should begin to converge for the very high attachments.

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Chris Klein, Director of Reinsurance Markets
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Casualty

US Casualty

At the July 1 renewals the US casualty lines continued to demonstrate a soft pricing environment with few changes seen from the prior renewals in the year. The direct market showed a general improvement in profitability as underwriting results and net investment gains increased. This occurred as premiums declined, further impacting a soft reinsurance pricing environment. A recent development is a slowing in the decline of the subject premium base for many casualty lines. It appears to be stabilizing (even increasing in some lines) as a result of the recovering economy.

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David Lewin, Managing Director
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Continental Europe’s legal framework continues to change and develop. This is evident at both the “macro” and “micro” levels.

At the “macro” level, governments across Europe are increasingly looking to reduce states’ cost burdens for healthcare. This has resulted in more restrictive judgments on cases involving accidents at work. We see this currently in the changes to workers compensation legislation in Norway, as well as in the acceptance of recourse measures against the private insurance industry by state bodies, evidenced by the current successful appeal (which could nevertheless be reversed) of the Swedish National Road administration against the motor liability insurer Länsförsäkringar.

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David Lewin, Managing Director
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On January 1, 2011 the new Swiss Code of Civil Procedure (CCP) will finally come into law. For the first time in history, Switzerland will have a unified civil procedure law. This development will end a unique situation in Europe, where 26 separate cantonal codes of procedure co-exist.

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David Lewin, Managing Director
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Class Action: Overview and Possible Impact

Category: Casualty
Tagged: Casualty, class action, Continental Europe, David Lewin, legal developments, legal update, Legislation