Risks emanating from space pose a serious and real threat to the (re)insurance sector. Space debris and satellite collisions have the potential to cause losses in the millions or even billions of dollars, while extreme space weather has the potential to cause systemic failures across the globe. Although both risks are difficult to quantify given the uncertainty involved, (re)insurers have a responsibility to promote risk mitigating measures as the potential costs involved are considerable.
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New Geographic Markets to Drive Profitable Growth in 2014, According to Second Annual Guy Carpenter Survey
Expansion into new geographic markets, new products and access to new distribution channels will be the primary drivers of profitable growth in 2014, according to a new survey released today by Guy Carpenter & Company. Continue reading…
Guy Carpenter hosted “Transferring Risk - Is the Insurance and Reinsurance Industry Adequately Servings its Clients?” the Reinsurance Symposium held in Baden-Baden on October 20, 2013. The event explored a range of topics including: the gap between economic and insured losses; how new capital entering the market can move beyond property catastrophe; and measures to provide coverage for new and emerging risks.
Nick Frankland, Chief Executive Officer, EMEA
Are the insurance and reinsurance industries adequately serving their clients in the transfer of risk? The question is a timely one because much recent discussion has focused on the entry of new capital into the industries and its effect on capacity and pricing. Regulatory and economic conditions have also concentrated minds on capital optimization with reinsurance playing an increased role in risk finance that may have deflected attention from the fundamental business of protecting against risk.
In a reinsurance market with abundant excess capital and where most reinsurance programs are oversubscribed, the need for a meaningful line size or differentiated underwriting contribution has never been more relevant.
With growth opportunities limited in mature markets, many insurers are looking to emerging markets for future expansion, in particular China, Southeast Asia and Central and Latin America. Figure F-10 highlights gross written premium (GWP) growth in emerging markets compared to developed markets from a 2003 base.
As carriers explore M&A opportunities to grow in the current environment, there is strong interest from potential buyers looking for bolt-on opportunities rather than transformational transactions. Although this demand has not to-date triggered a significant increase in M&A transactions, the ingredients for more activity are now in place.
Figure F-4 highlights the relative share price performance of the reinsurance sector since January 2012, which can be considered the start of the new wave of convergence capital. The clear upward trend has benefited investors during this time.