Archive for the ‘Week in Review’ Category



April 20th, 2018

Week’s Top Stories: April 14 - 20, 2018

Posted at 10:00 AM ET

Chart: Return on Equity for Guy Carpenter Reinsurance Composite, Year-end 2017: Chart presents return on equity for the Guy Carpenter Global Reinsurance Composite, 2005 through year-end 2017.

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Reliance on the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA): In 2017, more than 800 insurers wrote USD 215 billion in TRIPRA eligible premium, with a combined policyholder surplus of USD 683 billion. Considering the current 20 percent deductible requirement and policyholder surplus as a filter, Guy Carpenter’s analysis concludes that small to midsize insurers are substantially more vulnerable to the annual increases in the TRIPRA industry trigger and their overall net retentions as a percentage of policyholder surplus.

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Cyber Insurance Adoption is Increasing: The role of insurance in enhancing cyber resilience is increasingly being recognized by policymakers around the world, and the Organisation of Economic Co-operation and Development is recommending actions to stimulate cyber insurance adoption. Globally, it is expected the level of future demand for cyber insurance will depend on the frequency of high-profile cyber incidents as well as the evolving legislative and regulatory environment for privacy protections in many countries. In India, for example, there was a 50 percent increase in companies buying cybersecurity coverage from 2016 to 2017.

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Reinsurance Market Assessment: What the Numbers Reveal about the Current Industry Status: After several years of light catastrophe activity, particularly in the United States where capital deployment covering catastrophe exposures was heavily impacted by convergence capital, the events of 2017 provided a framework to evaluate how evolving market dynamics over the last few years held up to the real test of losses.

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Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2018.

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The Insurance Of Things & Industry 4.0 - A Matrix View: Technological progress and the accumulation of assets have not only stimulated the development of insurance products; they have in turn been nurtured by the availability of these offerings.

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April 13th, 2018

Week’s Top Stories: April 7 - 13, 2018

Posted at 10:00 AM ET

Chart: Combined Ratio for Guy Carpenter Reinsurance Composite, Year-End 2017: Chart presents combined ratio of the Guy Carpenter Global Reinsurance Composite, 2005 through year-end 2017.

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Large-Scale Cyber-Attacks on the Financial System: Cyber-attacks on financial institutions are becoming more frequent, complex, and sophisticated, with potential for far-reaching, systemic impacts. The motivation of cyber-attackers is shifting from purely achieving financial gains to disrupting critical infrastructures, such as through nation-state attacks, which threatens the basis for confidence in the financial system and even national or international stability. Guy Carpenter sister company Oliver Wyman and Depository Trust & Clearing Corporation have together produced a new report to investigate cross-industry coordination on response and recovery mechanisms to mitigate the systemic consequences of a large-scale cyber-attack.

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2018 Terrorism Risk Insurance Report: Although the number of incidents and casualties declined in 2017, terrorism remains a persistent and significant threat to businesses, governments and individuals. Marsh’s 2018 Terrorism Risk Insurance Report, produced with support from Guy Carpenter, explores the state of the terrorism insurance marketplace, presenting data on purchasing and pricing trends.

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Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2018.

View the chart >>


Reinsurance Market Assessment: What the Numbers Reveal about the Current Industry Status: After several years of light catastrophe activity, particularly in the United States where capital deployment covering catastrophe exposures was heavily impacted by convergence capital, the events of 2017 provided a framework to evaluate how evolving market dynamics over the last few years held up to the real test of losses. A review of data and behavior from 2017 revealed supply/demand dynamics remained favorable to buyers of reinsurance.

Read the article >>


And, you may have missed ….

Cyber Risk Management: Ten Questions to Ask Management About Your Organization’s Cyber Readiness: The annual economic cost of cyber-crime is estimated at USD 1.5 trillion and only an estimated 15 percent of that loss is currently covered by insurance. When the next cyberattack comes-and it is a “when,” not an “if”-boards want to be reassured that their organization is prepared to respond and mitigate the damage. However, research by WomenCorporateDirectors (WCD) and the Marsh & McLennan Companies Global Risk Center suggests that many directors are unclear about how cyber insurance can enhance their organizations’ cyber risk management framework.

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April 6th, 2018

Week’s Top Stories: March 31 - April 6, 2018

Posted at 10:05 AM ET

Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2018.

View the chart >>


Cyber Risk Management: Ten Questions to Ask Management About Your Organization’s Cyber Readiness: The annual economic cost of cyber-crime is estimated at USD 1.5 trillion and only an estimated 15 percent of that loss is currently covered by insurance. When the next cyberattack comes-and it is a “when,” not an “if”-boards want to be reassured that their organization is prepared to respond and mitigate the damage.

Read the article >>


Reinsurance Market Assessment: What the Numbers Reveal about the Current Industry Status: After several years of light catastrophe activity, particularly in the United States where capital deployment covering catastrophe exposures was heavily impacted by convergence capital, the events of 2017 provided a framework to evaluate how evolving market dynamics over the last few years held up to the real test of losses.

Read the article >>


Guy Carpenter Reports Capital Growth and Market Resilience Despite 2017 Losses: Guy Carpenter has released an estimate of year-end reinsurance capital levels and results of the January 2018 reinsurance renewal. According to the analysis, capital dedicated to reinsurance continued to grow in 2017 despite catastrophe losses. Due to ongoing excess supply and overall market resilience at January 1, rate firming was generally moderate and pricing shifts focused on client-specific justification.

Read the article >>


Organizations Have Made Some Revisions in Risk Mitigation Approaches in Response to New Technologies: While treasury and finance professionals are managing risks associated with technology enhancements at their companies, 28 percent report that their organizations have not taken steps to revise their approach to risk mitigation in response to increased risks. Fifteen percent of respondents confirm their companies have revised their risk mitigation approaches significantly to combat these new or increased risks. The remaining 57 percent of companies have made some revisions to their risk mitigation strategies.

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And, you may have missed….

Chart: Catastrophe Bond Issuance and Capital Outstanding: Chart shows 144A P&C catastrophe issuance and capital outstanding for the years 1998 through year-end 2017 based on data from GC Securities’* proprietary database.

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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities LLC, a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities LLC, MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.

March 30th, 2018

Week’s Top Stories: March 24 - 30, 2018

Posted at 9:00 AM ET

Reinsurance Market Assessment: What the Numbers Reveal about the Current Industry Status: After several years of light catastrophe activity, particularly in the United States where capital deployment covering catastrophe exposures was heavily impacted by convergence capital, the events of 2017 provided a framework to evaluate how evolving market dynamics over the last few years held up to the real test of losses.

A review of data and behavior from 2017 revealed supply/demand dynamics remained favorable to buyers of reinsurance. Markets maintained reasonable levels of capital and profitability overall, even though some individual lines of business have underperformed in recent years. The actions of this evolving market can now be evaluated with at least some level of real-world experience and an assessment of market response has a direct bearing on what companies can plan for and expect going forward.

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Cybersecurity Risks on Radar: Cybersecurity risks are increasingly being managed as a result of growing use of technology. Organizations’ Treasury and Finance functions are tasked with managing risks resulting from recent technology adoptions. Three-fourths of corporate practitioners report that cybersecurity risks have surfaced at their companies as a result of the increased use of new technologies. Slightly less than half cite operational risk as a concern (47 percent), followed by business continuation (41 percent).

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Chart: The Matrix of Cyber and Property Lines Insurance Coverage: Chart examines the policy coverage matrix between cyber and property lines of insurance coverage.

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Guy Carpenter Reports Capital Growth and Market Resilience Despite 2017 Losses: Guy Carpenter has released an estimate of year-end reinsurance capital levels and results of the January 2018 reinsurance renewal.

Read the article >>


Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2018.

View the chart >>


And, you may have missed….

Cyber Risk in an Interconnected World: In a digital world, cyber exposure evolves every day, making it one of the most dynamic emerging risks in the industry. Just as the housing boom along the US shoreline accelerated property losses, the technological sophistication and digital connectivity of the global economy have increased the cyber threat for all sectors. As large-scale breaches become more damaging and pervasive, the (re)insurance industry needs to continue to innovate to address potential systemic events, aggregations, and modeling capabilities. As such, 2018 will be a year of product growth and new challenges. In order to advance this important market, we must develop a common analytical language, harness advanced modeling technologies and learn lessons from other lines of business.

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March 23rd, 2018

Week’s Top Stories: March 17 - 23, 2018

Posted at 10:00 AM ET

Exposure to New Risks: Some emerging technologies are exposing organizations to new risks, but few practitioners report a significant impact. Over half of survey respondents report that artificial intelligence is impacting risk exposure at their organizations, although only 14 percent indicate the effect is significant. Data engineering and spreadsheets are also viewed as technologies that will expose companies to new risks.

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Cyber Risk in an Interconnected World: In a digital world, cyber exposure evolves every day, making it one of the most dynamic emerging risks in the industry. Just as the housing boom along the U.S. shoreline accelerated property losses, the technological sophistication and digital connectivity of the global economy have increased the cyber threat for all sectors. As large-scale breaches become more damaging and pervasive, the (re)insurance industry needs to continue to innovate to address potential systemic events, aggregations and modeling capabilities.

Read the article >>


Automobile Liability Market Update & Loss Trends Analysis: For most U.S. property and casualty insurance companies, automobile liability line performance has typically been one of the major factors adversely impacting overall profitability in recent years. Since the economic crisis of 2008, combined ratios for the auto liability line have steadily deteriorated, putting pressure on carriers to advance strategies to reverse this trend.

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Chart: Catastrophe Bond Issuance and Capital Outstanding: Chart shows 144A P&C catastrophe issuance and capital outstanding for the years 1998 through year-end 2017 based on data from GC Securities’* proprietary database.

View the chart >>


Cyber Risk; Threats and Insurance Protection for the Mining Sector: The world’s leading mining companies now unanimously report that cyber threats are among the principal risks facing their organizations. The report from Guy Carpenter sister company Marsh, Cyber Risk: Threats and Insurance Protection for the Mining Sector, highlights how networked systems are now in use across all aspects of mining operations, and how a range of cyber-attacks on the sector - and industry at large - have raised concerns about the cyber threat.

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And, you may have missed….

Guy Carpenter Reports Capital Growth and Market Resilience Despite 2017 Losses: Guy Carpenter has released an estimate of year-end reinsurance capital levels and results of the January 2018 reinsurance renewal.

Read the article >>


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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities LLC, a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities LLC, MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.

March 16th, 2018

Week’s Top Stories: March 10 - 16, 2018

Posted at 10:00 AM ET

Cyber Risk in an Interconnected World: In a digital world, cyber exposure evolves every day, making it one of the most dynamic emerging risks in the industry. Just as the housing boom along the US shoreline accelerated property losses, the technological sophistication and digital connectivity of the global economy have increased the cyber threat for all sectors. As large-scale breaches become more damaging and pervasive, the (re)insurance industry needs to continue to innovate to address potential systemic events, aggregations, and modeling capabilities.

Read the article >>


Formal Risk Appetite Missing: A formal risk appetite statement is missing at a majority of companies, although that could be changing. As organizations navigate both the risks and opportunities in a shifting risk landscape, management at all levels of an organization will face the daily question: should we take this risk? Yet, many organizations have not defined their risk appetite to provide clear guidelines to decision making.

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Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2018.

View the chart >>


Guy Carpenter Reports Capital Growth and Market Resilience Despite 2017 Losses: Guy Carpenter has released an estimate of year-end reinsurance capital levels and results of the January 2018 reinsurance renewal.

Read the article >>


Cyber Risk Management Response & Recovery: The annual economic cost of cyber-crime is estimated at USD 1.5 trillion, yet only an estimated 15% of that loss is currently covered by insurance. Given these staggering economic losses, and the increasing frequency with which attacks occur, it’s no surprise that cyber insurance is increasingly being recognized as a critical tool to enhance cyber resilience.

Read the article >>


And, you may have missed….

Flood Insurance: The 2018 Market Opportunity: Among all natural hazards, flood is the most costly and the most impactful on people. The Insurance Information Institute estimates that only 12 percent of homeowners purchase flood insurance and most of the purchases are through the National Flood Insurance Program (NFIP). The gap in flood insurance protection represents up to a USD 40 billion potential new market for private insurers in the United States, according to Jonathan Hayes, Managing Director, Guy Carpenter.

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March 9th, 2018

Week’s Top Stories: March 3 - 9, 2018

Posted at 10:48 AM ET

Takaful and the Opportunity for Peer-To-Peer Insurance: There has been much talk about peer-to-peer (P2P) insurance, and a number of startups in this space are emerging globally and in Asia. But while P2P insurance is a new disruptor in the insurance market, it is not a new concept. “Takaful”- an Islamic alternative to conventional insurance that has been around since 622 CE - shares several similarities with P2P insurance, and for Malaysia, which is one of the world’s largest Takaful markets, there are opportunities aplenty if the country can ride the growth in the popularity of P2P insurance.

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Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2018.

View the chart >>


Chart: Catastrophe Bond Issuance and Capital Outstanding: Chart shows 144A P&C catastrophe issuance and capital outstanding for the years 1998 through year-end 2017 based on data from GC Securities’* proprietary database.

View the chart >>


Guy Carpenter Global Reinsurance Composite; Third Quarter 2017: Here we bring together recent Chart Room posts highlighting performance of the Guy Carpenter Global Reinsurance Composite.

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Chart: Top Ten Significant Insured Loss Events; 2017: The table lists the latest estimates for the top ten significant insured loss events for 2017.

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And, you may have missed…

Guy Carpenter Reports Capital Growth and Market Resilience Despite 2017 Losses: Guy Carpenter has released an estimate of year-end reinsurance capital levels and results of the January 2018 reinsurance renewal. According to the analysis, capital dedicated to reinsurance continued to grow in 2017 despite catastrophe losses. Due to ongoing excess supply and overall market resilience at January 1, rate firming was generally moderate and pricing shifts focused on client-specific justification.

Read the article >>


Click here to register to receive e-mail updates >>

*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities LLC, a US registered broker-dealer and member FINRA/NFA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd. (MMCSEL), which is authorized and regulated by the Financial Conduct Authority, main office 25 The North Colonnade, Canary Wharf, London E14 5HS. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities LLC, MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product.

March 2nd, 2018

Week’s Top Stories: February 24 - March 2, 2018

Posted at 11:00 AM ET

Three Takeaways from Global Risks Report 2018: Marsh & McLennan, in collaboration with the World Economic Forum, launched the 13th edition of the Global Risks Report. The report offers a rich perspective on the major threats to global prosperity. The global risks landscape is being shaped by the extraordinary pace of change, characterized by rapid technological advances (such as AI and automation) on the one hand, and seismic shifts in the political and geopolitical landscape on the other.

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Cyber Response Plans Lacking: Only 30 percent of organizations have a cyber response plan, according to survey results.

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Predictive Analytics Most Likely to Increase Risk Management Efficiency: Predictive analytics is a technology being used at some organizations-and being evaluated at others-to manage risk within Treasury and Finance. Two-thirds of survey respondents believe that this technology will increase risk management efficiency.

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Cyber Risk Management Perspectives: Here we bring together recent GC Capital Ideas posts that discuss perspectives on the evolving cyber risk environment.

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From Risk to Resilience: Marsh & McLennan Companies Cyber Handbook 2018: Perspectives on the Next Wave of Cyber: Cyber risk continues to grow as technology innovation increases and societal dependence on information technology expands. A new and important turning point has been reached in the struggle to manage this complex risk. In the war between cyber attackers and cyber defenders, we have reached what Winston Churchill might call “the end of the beginning.”

Read the article >>


And, you may have missed….

By the Numbers: Global Cyber Risk Perception Survey: Cyber risk is now at the forefront of the corporate risk agenda, but cyber risk management strategies are not keeping pace despite an increasingly complex threat environment and escalating potential financial impact. A new global survey of more than 1,300 executives, undertaken by Guy Carpenter sister organization Marsh in partnership with Microsoft, examines cyber risk concerns and management strategies by organizations of all sizes in a range of industries worldwide.

Read the article >>


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February 23rd, 2018

Week’s Top Stories: February 17 - 23, 2018

Posted at 11:00 AM ET

Marsh & McLennan Companies Climate Resilience Handbook, 2018: Marsh & McLennan Companies has developed a comprehensive framework to help organizations think through all aspects of climate resilience. The 2018 MMC Climate Resilience Handbook provides concise cases that will change the way you think about climate in the context of your organization in three categories of action.

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From Risk to Resilience: Marsh & McLennan Companies Cyber Handbook 2018: Perspectives on the Next Wave of Cyber: Cyber risk continues to grow as technology innovation increases and societal dependence on information technology expands. A new and important turning point has been reached in the struggle to manage this complex risk. In the war between cyber attackers and cyber defenders, we have reached what Winston Churchill might call “the end of the beginning.”

Read the article >>


Guy Carpenter on Modeling: Two Views: “Managing Cat Model Change” provides Guy Carpenter’s best practices on model change frequency and management. “To Bend or Blend?” delivers insights on which modeling technique you should use when developing your own view of risk.

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By the Numbers: Global Cyber Risk Perception Survey: Cyber risk is now at the forefront of the corporate risk agenda, but cyber risk management strategies are not keeping pace despite an increasingly complex threat environment and escalating potential financial impact. A new global survey of more than 1,300 executives, undertaken by Guy Carpenter sister organization Marsh in partnership with Microsoft, examines cyber risk concerns and management strategies by organizations of all sizes in a range of industries worldwide.

Read the article >>


Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2018.

View the chart >>


And, you may have missed….

Guy Carpenter Reports Capital Growth and Market Resilience Despite 2017 Losses: Guy Carpenter has released an estimate of year-end reinsurance capital levels and results of the January 2018 reinsurance renewal. According to the analysis, capital dedicated to reinsurance continued to grow in 2017 despite catastrophe losses. Due to ongoing excess supply and overall market resilience at January 1, rate firming was generally moderate and pricing shifts focused on client-specific justification.

Read the article >>


Click here to register to receive e-mail updates >>