April 10th, 2018

2018 Terrorism Risk Insurance Report

Posted at 1:00 AM ET

terrorism-rep-connections-banner-2Although 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. We also take a look at how the terrorism insurance market continues to innovate and respond to the needs of global organizations in light of an evolving risk landscape.

Reinsurance capacity for terrorism risks continues to develop and grow. Many insurers continue to use the commercial reinsurance markets — at least in part — to buy down their TRIPRA deductibles and buy out their co-shares at acceptable prices, especially for
conventional weapon attacks.

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April 9th, 2018

Large-Scale Cyber-Attacks on the Financial System

Posted at 1:00 AM ET

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.

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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.

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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.

April 5th, 2018

Organizations Have Made Some Revisions in Risk Mitigation Approaches in Response to New Technologies

Posted at 1:00 AM ET

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.

Continue reading…

April 4th, 2018

Cyber Risk Management: Ten Questions to Ask Management About Your Organization’s Cyber Readiness

Posted at 1:00 AM ET

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 3rd, 2018

GC Capital Ideas: Top Stories, March 2018

Posted at 1:00 AM ET

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

View the chart >>


2. 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 >>


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

View the chart >>


4. 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.

Read the article >>


5. 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 >>


6. 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.

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7. 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.

Read the article >>


8. 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 >>


9. 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.

Read the article >>


10.Formal Risk Appetite Missing; A formal risk appetite statement is missing at a majority of companies, although that could be changing.

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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.

April 2nd, 2018

GC Capital Ideas Top Stories: First Quarter, 2018

Posted at 1:00 AM ET

1. 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 >>


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

View the chart >>


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

View the chart >>


4. Chart: Return on Equity for Guy Carpenter Reinsurance Composite, Q3, 2017; Chart presents return on equity for the Guy Carpenter Global Reinsurance Composite, 2005 through third quarter, 2017.

View the chart >>


5. Guy Carpenter Reports US Insurance Market at a Crossroads but Opportunity Exists; Guy Carpenter today released a study outlining a dynamic insurance industry facing a changing economy and pressure in once-stable lines, but with opportunity for those with management skill and understanding of risk.

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6. Chart: Combined Ratio for Guy Carpenter Reinsurance Composite, Q3, 2017; Chart presents combined ratio of the Guy Carpenter Reinsurance Composite, 2005 through third quarter, 2017.

View the chart >>


7. Exploring the Excess & Surplus Industry: E&S Market Update and Projections; The excess and surplus (E&S) lines segment of the insurance industry continues to be the essential market for risks for which  the standard insurance market typically does not offer coverage.

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8. 2017 North Atlantic Hurricane Season; The 2017 North Atlantic Hurricane season was one of the most active seasons on record, a historic season in many respects, and certainly an impactful one.

Read the article >>


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

View the chart >>


10. From Risk to Resilience: Marsh & McLennan Companies Cyber Handbook: 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.”

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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.

Read the article >>


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).

Read the article >>


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

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 >>


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.

Read the article >>


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

March 29th, 2018

What the Numbers Reveal about the Current Industry Status. Chapter 2: Insurer Profitability and Retrocession, Part II

Posted at 1:00 AM ET

How have 2017 losses and the last several years of declining rates impacted reinsurer profitability?  Has increasing prevalence of retrocessional reinsurance, now provided primarily by convergence capital providers, had an impact? Part II.

Continue reading…