Hurricane Gonzalo is forecast to make a direct hit or close approach to Bermuda sometime on Friday, most likely as a Category 3 hurricane on the Saffir-Simpson scale. Hurricane and tropical storm force winds extend outward up to 45 miles (75 kilometers) and 150 miles (240 kilometers) from the center of circulation, respectively. After clearing Bermuda, Gonzalo should eventually make landfall in Eastern Atlantic Canada as a strong post-tropical cyclone.
- Baden-Baden Reinsurance Symposium Assesses Future Impact of Current Market Conditions
- Influx of New Capital Continues to Reshape the Reinsurance Market
- Cyber, Terrorism and New Compensation Structures Highlighted as Critical Emerging Risks
The development of information technology and online connectivity has changed the way businesses operate. “Big data” and intricate information technology systems are vital to today’s economy. As such, we look at risk associated with cyber technology as an example of the realm of emerging “technology risk.”
A cursory reading of just a few of the publications on the topic of emerging risks quickly resembles a crash-course in risk aversion therapy. We have been subjected to a bewildering and ever lengthening series of lists of emerging risks. Swiss Re recently identified 26 such risks (1), Hannover Re has an ongoing list of 14 while the World Economic Forum in its Global Risks 2014 (2) lists 31 global risks (3).
(Re)insurers today face a degree of change and uncertainty that appears to be evolving at an ever quickening pace. Guy Carpenter has published a report, Ahead of the Curve: Understanding Emerging Risks, highlighting emerging risks facing the (re)insurance sector, including cyber-attacks, terrorism and new compensation structures for long-term bodily injuries. The report seeks to identify and categorize these risks that are now confronting the sector, as well as analyze their implications on businesses and (re)insurers.
Guy Carpenter Announces New Cyber Product Launch: Guy Carpenter announced the launch of a new cyber privacy and network protection solution designed to meet the unique cyber challenges faced by small- and medium-sized companies.
Chart: Catastrophe Bonds Versus Various Other Capital Market Assets Classes: Chart shows the cumulative return profile of 144A catastrophe bonds (as a proxy for all capital markets-based risk transfer capacity) versus various other capital market asset classes through mid-year 2014.
Chart: Catastrophe Bond Capital Growth Mid-Year 2014: Chart shows the growth in 144A catastrophe bonds through mid-year 2014 with capital outstanding reaching a record high.
Chart: Global Property Catastrophe ROL Index: The Guy Carpenter Global Property Catastrophe Rate on Line index is presented for 1990 through 2014. The index fell by 11 percent at January 1, 2014.
Chart: Private Catastrophe Bonds Mid-Year 2014: Chart shows the evolution of private catastrophe bonds through mid-year 2014 based on deal count and total aggregate limit placed.
And, You May Have Missed…
GC Videocast - Rendez-Vous Press Briefing 2014 (Nick Frankland) Centralization of the Reinsurance Buying Process in EMEA: Nick Frankland, CEO of EMEA operations, Guy Carpenter, reviewed developments in EMEA, where newer capital is yet to have a significant impact. He described the region as “a mature, stable market saturated with existing capacity and clients tending towards buying less reinsurance.” This approach to purchasing he said reflected the continuing centralization of the buying process. “Groups are taking a longer-term and more strategic rather than short-term tactical approach,” he stated. “This in turn has seen a smaller number of reinsurers selected as long-term strategic partners.” Opportunities for growth in such an environment however still remain, he said. “Future growth for a reinsurance broker demands a thoughtful, strategic, analytical and intellectual value offering above and beyond traditional structuring and placing.”
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Chart shows the evolution of private catastrophe bonds through mid-year 2014 based on deal count and total aggregate limit placed.
Chart shows the growth in 144A catastrophe bonds through mid-year 2014 with capital outstanding reaching a record high.
Chart shows the cumulative return profile of 144A catastrophe bonds (as a proxy for all capital markets-based risk transfer capacity) versus various other capital market asset classes through mid-year 2014.