As businesses, both large and small, throughout all sectors of industry, become more and more reliant on technology to improve service efficiencies and functionalities, cyber risk has become one of the most pressing public topics addressed in corporate boardrooms and by governments across the globe. The corresponding awareness of a business’s susceptibility to a cyber-attack has grown along with a spate of high-profile attacks. Consequently, cyber risk is now an embedded feature of the global risk landscape, not only as a privacy/network liability, which is where much of the publicity has arisen, but also as a peril affecting traditional insurance lines. Therefore, preventative and post-event remediation are gaining importance as shareholders, regulators and rating agencies are increasingly focused on enterprise risk management activities for cyber risks.
Archive for the ‘Casualty’ Category
Guy Carpenter & Company today announced the formation of a strategic alliance with Symantec Corporation, a global leader in cyber security, to create a cyber aggregation model. The model will include a comprehensive catalogue of cyber scenarios from which insurers can derive frequency and severity distributions to measure the potential financial impact of loss from both affirmative cyber coverages and “silent” all-risk policies where cyber is the peril, but no cyber exclusions exist.
Marsh & McLennan Companies’ Global Risk Center has published a report, The Emerging Risks Quandary. Many companies struggle to articulate the precise relevance of global and emerging risks to their business, and are poorly organized to make timely decisions. This report explores what impedes corporate efforts and sets out how companies can blend creativity and pragmatism to look beyond predictable and controllable risks to complex uncertainties that have the potential to generate more than mere volatility in corporate earnings.
Here we review GC Capital Ideas posts on unmanned vehicle technology as an emerging risk and the challenges and opportunities it presents to (re)insurers.
Here we review recent GC Capital Ideas posts examining the benefits to (re)insurers adopting Own Risk and Solvency Assessment (ORSA) standards.
Here we review GC Capital Ideas posts on the challenges (re)insurers face managing and modeling casualty catastrophe risks.
1. China Risk Oriented Solvency System (C-ROSS): The China Insurance Regulatory Commission (CIRC) is instituting sweeping changes through its three-tiered China Risk Oriented Solvency System (C-ROSS) framework that will dramatically impact how (re)insurers conduct business. It will strengthen capital requirements, risk management and transparency disclosures - bringing China in line with, and in some cases overtaking, global standards. The C-ROSS framework is similar to Solvency II: three tiers focusing on quantitative, qualitative and disclosure requirements.
2. Chart: Combined Ratio For Guy Carpenter Reinsurance Composite, YE 2015: Chart presents combined ratio for the Guy Carpenter Global Reinsurance Composite, 2004 through year end 2015.
3. Chart: Global Property Catastrophe ROL Index 1990 to 2016: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2016.
4. Guy Carpenter Announces Senior Promotion and Appointment: Guy Carpenter & Company announced that Peter Stubbings has been promoted to CEO of the firm’s Bermuda operations, with immediate effect. In addition, Richard Keegan is to join the Bermuda team as Senior Vice President in May.
5. Guy Carpenter Reports Stable Capital at January 1, 2016 Renewals: Guy Carpenter & Company reports that overall capital levels dedicated to reinsurance have stabilized, showing no growth for the first time in several years. In a highly competitive environment, companies assessed broader opportunities and the rate of incoming capital slowed. However, moderate loss experience kept capacity at abundant levels for the January 1, 2016 renewals. The continued scarcity of costly catastrophe losses and more than adequate capacity led to reinsurance pricing reductions, although there are signs the rate of descent is slowing as compared to 2015.
6. 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 (ERM) 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.
7. Chart: Return On Equity For Guy Carpenter Reinsurance Composite, YE 2015: Chart presents return on equity for the Guy Carpenter Global Reinsurance Composite, 2004 through year end 2015.
8. Chart: Source Of Earnings For Guy Carpenter Reinsurance Composite, YE 2015: Chart presents source of earnings for the Guy Carpenter Global Reinsurance Composite for the year end, 2015 compared to the year end, 2014.
9. US Residual Markets: The US residual property insurance market segment is comprised of Fair Access to Insurance Requirements (FAIR) Plans, Beach and Windstorm Plans and two state run insurance companies - Florida Citizens Property Insurance Company (Florida Citizens) and Louisiana Citizens Property Insurance Corporation (Louisiana Citizens). These insurance facilities grew out of the civil strife in the 1960s to ensure continued access to insurance in urban areas. Over time they have evolved and their mandate has grown beyond their urban focus. Today these facilities are significant providers of some of the most wind- and earthquake-exposed property insurance in the country.
10. Microinsurance Consortium and Venture Incubator Announces New Name: The Microinsurance Consortium, led by a group of leading companies in the insurance industry, announced a new name for their microinsurance venture incubator (MVI) - Blue Marble Microinsurance. The consortium consists of American International Group, Inc., Aspen Insurance Holdings Limited, Guy Carpenter & Company, LLC together with Marsh & McLennan Companies, Inc., Hamilton Insurance Group, Ltd., Old Mutual plc, Transatlantic Reinsurance Company, XL Catlin, and Zurich Insurance Group.
Here we review recent GC Capital Ideas posts on developments in China’s insurance regulatory system.