Archive for the ‘Property’ Category
European insurers are facing a more complex regulatory environment from national, regional and superregional authorities. The approaching date for implementation of Solvency II, January 1, 2016, is taking center stage. Member states are expected to transpose the directive requirements into local requirements with equivalence decisions this year.
The National Association of Insurance Commissioners (NAIC) has been continuously engaged in the formulation of the regulatory standards that the International Association of Insurance Supervisors is developing, but has expressed several concerns due to the different legal, regulatory and accounting systems that exist. The NAIC does not want the Insurance Capital Standard (ICS), which is to be a consolidated group-wide standard, to undermine the legal entity capital requirements in the United States. As a result, the NAIC is trying to ensure that any ICS be supplemental to jurisdictional capital requirements and include a common methodology by which it achieves comparable (substantially similar) outcomes across jurisdictions. The NAIC is working through the ComFrame Development and Analysis (G) Working Group (CDAWG), which was formed early last year, to provide on-going input with respect to all developments in this regard.
Torrential rainfall in South Carolina led to catastrophic flooding throughout the state over the weekend, claiming the lives of at least nine people. Large swaths of the state have experienced over 20 inches of rain in the past week with another two to six inches forecasted through Monday, according to the state climatologist.
(Re)insurers are being challenged as the regulatory environment becomes more complex, with regulation increasing considerably at multiple levels in numerous jurisdictions throughout the world. Insurers are facing new costs and pressures in their efforts to manage the regulatory landscape.
Globalization in the insurance industry has historically been characterized by North American companies seeking to expand their business models to Europe, with Asia and South America as their secondary focus. European companies have sought to expand into North America, Asia and Latin America (for Spanish and Portuguese speaking companies).
While the alternative capital entering reinsurance markets has spurred transactions in accordance with the anti-correlation theory, other investors that have entered the market via acquisition of businesses have certainly blurred the theory’s parameter of the required level of underwriting margin.
Here are recent CAT-i stories from the period July to mid-September of 2015.
Chile experienced an 8.3-magnitude earthquake on September 16, followed by dozens of aftershocks, including one at magnitude 7.0 and seven at magnitude 6.0 or above. According to the U.S. Geological Survey (USGS), the earthquake occurred near the coast of Coquimbo, about 46 kilometers (29 miles) west of Illapel at 19:54 local time. A tsunami warning was issued for the entire coast of Chile but has since been lifted. Initial media reports indicate at least 11 fatalities, although emergency crews are still accessing affected areas. The earthquake has forced more than one million people to evacuate from their homes and electrical power was cut off to 240,000 households. Heavy waves following the earthquake caused flooding in coastal towns although most buildings were reported to hold up well. The USGS pager service estimates most probable economic losses between USD 100 million and USD 1 billion. Our first thoughts and concerns are with those directly affected by this event.