Archive for the ‘Property’ Category



August 27th, 2015

Property Price Declines Moderate

Posted at 1:00 AM ET

As Guy Carpenter predicted at the beginning of 2015, buyers continued to purchase more catastrophe limit to take advantage of the lower prices that have already occurred in most business segments and geographies.

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August 26th, 2015

GC Securities* Completes Catastrophe Bond Bosphorus Ltd. Series 2015-1 Notes Benefiting the Turkish Catastrophe Insurance Pool

Posted at 6:45 AM ET

GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, today announced the placement of the Series 2015-1 Notes, with notional principal of USD 100,000,000, through the newly formed catastrophe bond shelf program, Bosphorus Ltd., to benefit the Turkish Catastrophe Insurance Pool (TCIP). The 2015-1 Notes represent the second time that TCIP has utilized the capital markets to obtain earthquake protection on a parametric basis. TCIP, managed by Eureko Sigorta A.Ş., first accessed the cat bond market in 2013 via the issuance of Bosphorus 1 Re Ltd. and has now sourced USD 500 million in total of catastrophe bond capacity from capital market investors.

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August 26th, 2015

Mid-Year Report: Executive Summary, Part II

Posted at 1:00 AM ET

The trends outlined in Guy Carpenter’s January 1 renewal report continued through the first six months of 2015. Guy Carpenter’s observation that buyers were purchasing more catastrophe limit to take advantage of lower costs, continued to be borne out and even accelerated. The increased demand for reinsurance and expansion of tailored coverage persisted through the April, June and July renewals.

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August 25th, 2015

Mid-Year Report: Executive Summary, Part I

Posted at 1:00 AM ET

The (re)insurance industry continues to evolve and adapt to a changing market on many fronts. Recent areas of focus include heightened cyber security risk, increased regulation, political and economic uncertainty, low interest rates and slow economic growth. At the same time, (re)insurers are managing new capital inflows, excess capacity and few catastrophe losses.

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August 24th, 2015

PA/MGA Growth Through Acquisitions, Part II

Posted at 1:00 AM ET

The vast majority of the respondents to Guy Carpenter’s survey of managing general agents intend to use company funds or company stock (if applicable) to make acquisitions (81 percent this year versus 47 percent in 2012). Despite access to bank financing, private equity and venture capital options, respondents showed no interest in employing those financial vehicles. It appears insurance companies continue to have ample capital and would use their own resources rather than go to outside sources.

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August 20th, 2015

PA/MGA Growth Through Acquisitions, Part I

Posted at 1:00 AM ET

The survey indicates a dramatic shift in the percent of program carriers interested in making acquisitions, following a couple of years of steady decline. This year, 69 percent of respondents indicated an interest in growing through acquisitions (up from 44 percent in 2012). When queried on the types of acquisitions they are seeking, most respondents’ interests appear to be acquiring either MGA/PA firms (63 percent) or teams of people (32 percent). This year none of the respondents was interested in acquiring third party administrators or wholesalers. Interest in carriers buying other insurance carriers remained relatively unchanged at 19 percent.

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August 19th, 2015

PA/MGA Reinsurance Purchasing

Posted at 1:00 AM ET

Reinsurance continues to play an important role for program issuing carriers. Sixty-nine percent of respondents to the survey this year indicated the use of both direct reinsurers and intermediaries, down slightly from 76 percent in 2012. Those managing their purchase through intermediaries exclusively increased to 25 percent of respondents from 18 percent in the prior year.

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August 18th, 2015

PA/MGA Risk Sharing

Posted at 1:00 AM ET

Program managers may also manage the performance of their programs through the pursuit of risk sharing on behalf of their PA/MGA partners. As we saw in past surveys, not all respondents require risk sharing. This year, a significant number of respondents said they utilize a sliding scale commission structure (92 percent versus 76 percent for the prior survey year). The percent of respondents utilizing some type of captive structure fell this year to 8 percent from 24 percent in the prior year. Alternately, 19 percent of the respondents will still pay flat commissions, a sizeable drop from 36 percent in 2012.

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August 17th, 2015

PA/MGA Performance Management

Posted at 1:00 AM ET

A carrier’s need for growth and profitability has to be closely monitored and controlled in the PA/MGA space. Every respondent in this year’s survey indicated that they had audit procedures in place to assure adherence to established risk selection and underwriting guidelines, financial billing, collection, remittance and banking guidelines, claim reporting, adjusting and settlement guidelines. Even though some changes have taken place in the number of audits conducted each year, including a notable increase in the percent of respondents doing four or more audits, rising to its highest level since 2008, this year’s results reflect the current and historical importance of the carriers’ PA/MGA management process. 

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August 13th, 2015

PA/MGA Operating Platform

Posted at 1:00 AM ET

Carriers continue to maintain flexibility regarding their requirements for the services they expect their PA/MGA partners to perform and what they feel they need to control. As in the 2012 survey, respondent carriers expect their PAs/MGAs to underwrite (100 percent of respondents), rate, quote, bind business (100 percent) and issue and service policies (94 percent). The survey indicates carriers expect their PAs/MGAs to perform premium audits (56 percent) and loss control services (69 percent). Most of the other services, even though not required or expected of PAs/MGAs, are often performed by them, a third party, or in many cases, the carriers’ themselves.

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