As we approach the April 2015 reinsurance renewal, we look back at the Jan. 1 renewal.
Archive for the ‘Property’ Category
Here we review recent GC Capital Idea stories on catastrophe models that focus on exposures beyond catastrophe property risk:
Guy Carpenter today released a new scenario risk report titled Tsunami Risk from Magnitude 9.4 Earthquake in Manila Trench. The report provides an in-depth study of the tsunami risk from a moment magnitude 9.4 earthquake along the Manila Trench, including the Hong Kong area, Taiwan, Kota Kinabalu, Macau, Manila and Vietnam. Among the regions studied in the report, the worst case scenario predicts the highest risks in southwest Taiwan, specifically up to 4 meters at the Port of Kaohsiung, Taiwan’s principal port and the sixth largest container port in the world.
Guillermo Franco, Head of Catastrophe Risk Research - EMEA
Destruction caused by catastrophes often unfolds due to inadequate construction practices or land use planning. The likely response to these events is to strive to “build back better,” in part by addressing the mistakes of the past. Unfortunately, communities that embrace this challenge often find that they lack the financial resources for it and ambitious reconstruction projects lose momentum.
Here we review recent GC Capital Ideas stories on how better analytics can support (re)insurers’ capital modeling and benchmarking.
Here we highlight recent GC Capital Ideas Chart Room entries highlighting the capital position of the reinsurance sector.
Guy Carpenter today released its annual Global Catastrophe Review, which reports that insured losses in 2014 were at the lowest level seen since 2009. According to the report, significant insured losses in 2014 totaled approximately USD33 billion, a dramatic drop when compared to the historic insured losses seen in 2011, which totaled approximately USD126 billion.
Eighty-nine percent of property and casualty (P&C) risk capital (based only on 144A cat bond transactions) had a bond tenor of either three or four years in 2014, a decrease from 93 percent in 2013. This was due to increased usage of risk periods longer than four years. This was largely influenced by Sanders Re 2014-1, a USD300 million five year transaction benefiting Allstate (Q2) and Kilimanjaro Re 2014-2, a USD500 million five year transaction benefiting Everest Re (Q4). Investors were receptive to longer-term transactions (a position we expect will continue into 2015) as both deals were oversubscribed. However, such deals closed either above or at the midpoint of initial price guidance, indicating that investors required additional compensation for risk periods longer than four years. Sponsors continued to express interest in bonds with risk periods beyond five years, which we expect will persist through 2015 and beyond.