January 13th, 2015

GC Capital Ideas Top Chart Room Entries: For the Year 2014

Posted at 1:00 AM ET

From one of GC Capital Ideas’ more popular categories, we highlight the top ten Chart Room stories viewed during the year of 2014:

 

1. 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.

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2. Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

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3. Chart: Regional Property Catastrophe ROL Index: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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4. Chart: Evolution of Dedicated Reinsurance Capital, 2012 - YE 2013: The evolution of dedicated sector capital is presented in the chart. Guy Carpenter estimates this rose marginally in 2013 to USD322 billion at year-end as underwriting profits from low catastrophe claims and convergence capital inflows offset unrealized losses, sustained share buybacks and dividend payments.

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5. Chart: Catastrophe Bond Issuance and Capital Outstanding: Issuance reached a record high of USD7.1 billion, surpassing 2007’s total. Risk capital outstanding also reached an all-time high of USD18.6 billion last year.

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6. Chart: 2013 Catastrophe Bond Transactions: This table lists the 144A property/casualty catastrophe bond transactions that were completed in 2013.

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7. Chart: Top Ten Catastrophe Bond Transactions: The chart ranks deals in 2013, as compiled by GC Securities*, a division of MMC Securities Corporation. 

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8. Chart: Pension Fund Capital Under Management and Allocations into Reinsurance: As the chart illustrates , pension funds alone are worth around USD30 trillion. Based on Guy Carpenter’s analysis of possible capital allocation percentages to the (re)insurance space in consultation with sector experts, a maximum of USD900 billion of this amount could potentially be available for insurance-linked investments. This figure is, of course, much greater than currently needed, demonstrating the existing convergence-driven supply excess. Given Guy Carpenter estimates global property catastrophe limit is currently in excess of USD300 billion, and the ILS market only accounts for around 15 percent of this amount, pension funds have so far made very small investments in reinsurance relative to their overall size.

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9. Chart: U.S. Property Catastrophe Reinsurance Quoting Behavior: In this chart, the January 1, 2014 average quote across all programs is represented by the line at 0 percent, while the red dots indicate reinsurers’ distances from the mean across all the programs that they quoted. The size of the line represents the variability from the average for all quotes provided by the reinsurer. Each reinsurer is represented across the bottom of the chart by its A.M. Best rating. Quotes representing non-concurrent terms were excluded.

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10. Chart: European Property Catastrophe - Typical ROL Changes: The chart compares changes at January 2014 with January 2013.

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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., 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 Corp., 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. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

January 12th, 2015

GC Capital Ideas Top Chart Room Entries: Fourth Quarter, 2014

Posted at 1:00 AM ET

From one of GC Capital Ideas’ more popular categories, we highlight the top ten Chart Room stories viewed during the fourth quarter of 2014:

 

1. 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.

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2. 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.

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3. Chart: Rate Movements by Business Segment: Reports rate movements at January 1, 2014.

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4. 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.

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5. 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.

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6. Chart: Regional Property Catastrophe ROL Index: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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7. Chart: Combined Ratio for Guy Carpenter Composite, H1 2014: Chart presents combined ratio for the Guy Carpenter Global Reinsurance Composite, 2004 through first half, 2014.

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8. Chart: Return On Equity For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents return on equity for the Guy Carpenter Global Reinsurance Composite, 2004 through first half, 2014.

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9. Chart: Evolution of Shareholders’ Funds For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents the evolution of shareholders’ funds for the Guy Carpenter Global Reinsurance Composite, 2012 through first half, 2014.

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10. Chart: Source Of Earnings For Guy Carpenter Reinsurance Composite, H1 2014: Chart presents source of earnings for the Guy Carpenter Global Reinsurance Composite for the first half, 2014 compared to first half, 2013.

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Click here to view additional materials in GC Capital Ideas’ Chart Room >>

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Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., 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 Corp., 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. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

January 9th, 2015

Week’s Top Stories: January 3 - 9, 2015

Posted at 8:00 AM ET

January 1, 2015 Renewals See Lower Pricing and Broader Coverage for Clients: Guy Carpenter reports reinsurance pricing fell at the January 1, 2015 renewals in many segments, affecting almost all lines of business and geographies, continuing recent renewal trends.

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Chart: Global Property Catastrophe ROL Index 1990 to 2015: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

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GC Securities* Completes First Ever Swiss Franc-Denominated Private Catastrophe Bond (”Gurten”) Benefitting Gebäudeversicherung Bern: GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, announced the Regulation S placement of Principal At-Risk Variable Rate Notes (”Notes”) due January 15, 2016, with notional principal at CHF70,000,000 through Kaith Re Ltd., to benefit Gebäudeversicherung Bern (”GVB”). This is the first ever Swiss franc-denominated catastrophe bond and the first time that GVB has utilized the cat bond market to manage its risks.

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The Reinsurance Evolution Continues: Executive Summary: During the past twelve months, capital has continued to flow into the reinsurance markets in the form of both insurance-linked securities (ILS) and collateralized reinsurance transactions. This report examines the growth in the ILS market during the past year and some of the important evolutionary elements of catastrophe bond structure and risk transfer. We also explore how the use of capital markets-based capacity provides cost savings for public entities by helping them build surplus, reduce public debt and limit the risk that natural perils can pose to the state’s balance sheet. As collateralized markets continue to increase in importance as an alternative to both traditional reinsurance and ILS, Guy Carpenter has taken an active role in analyzing counterparty risk and developing specific structures and strategies to manage this risk. This report also provides an overview of the manner in which Guy Carpenter assists its clients in managing counterparty risk and limiting credit exposure.

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Casualty Catastrophe Risk Modeling: Casualty (or liability based) catastrophes have become increasingly frequent and severe over the past decade, exposing (re)insurers to much more risk than they may have realized and reserved for. One root cause can trigger a chain reaction that can bleed balance sheets and even imperil solvency. Until recently, casualty carriers had little choice but to accept this risk as losses emerged.

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And, You May Have Missed…

Emerging Risk Challenges And Opportunities: 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, Hannover Re has an ongoing list of 14 while the World Economic Forum in its Global Risks 2014 lists 31 global risks.

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*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., 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 Corp., 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. **GC Analytics is a registered mark with the U.S. Patent and Trademark Office.

January 8th, 2015

Chart: Catastrophe Bond Issuance and Capital Outstanding - 1997 to YE 2014

Posted at 3:28 PM ET

The chart below presents catastrophe bond issuance through 2014, a record setting year. 

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January 8th, 2015

Chart: Significant Insured Losses – 2011 to YE 2014

Posted at 3:24 PM ET

Reports losses by quarter. 

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January 8th, 2015

Chart: Alternative Capacity as a Percentage of Catastrophe Reinsurance Limit

Posted at 3:20 PM ET

The chart below presents alternative capital capacity as a percentage of global property catastrophe reinsurance limit from 2008 to year-end 2014.

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January 8th, 2015

Chart: Evolution of Dedicated Reinsurance Capital, 2013 to YE 2014

Posted at 3:14 PM ET

The evolution of dedicated sector capital is presented below. Guy Carpenter estimates dedicated sector capital remained at near record levels having risen to approximately USD400 billion at year-end 2014 from traditional rated markets and all sources of alternative capital including sidecars, collateralized reinsurance vehicles and catastrophe bonds.

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January 8th, 2015

Chart: Regional Property Catastrophe ROL Index, 1990 to 2015

Posted at 3:08 PM ET

The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.

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January 8th, 2015

Chart: Global Property Catastrophe ROL Index 1990 to 2015

Posted at 3:04 PM ET

The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2015.

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January 8th, 2015

Chart: European Property Catastrophe ROL Trends — 2007 to 2015

Posted at 2:41 PM ET

The chart presents the European Property Catastrophe Rate On Line (ROL) trends with correlating impact of catastrophe events for the period 2007 to January 1, 2015.

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