August 18th, 2014

Key Battlegrounds

Posted at 1:00 AM ET

The next 18 months are likely to be an important period for Afghanistan and Pakistan in determining whether the impending withdrawal of US-led coalition forces from Afghanistan could be exploited by militant groups and a precursor to increased terrorist activity in both countries. In particular, there are fears Afghanistan could descend into civil war as the Taliban seeks to reassert its control over certain areas of the country after coalition troops withdraw, thereby recreating a sanctuary for militants similar to the one that existed before the September 11, 2001 attacks.

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August 15th, 2014

Week’s Top Stories: August 9 — 15, 2014

Posted at 8:00 AM ET

GC Videocast - MENA Insights: Fadi AbuNahl, Chief Executive, Trust Re: In our third MENA Insights interview Fadi AbuNahl, chief executive of Trust Re, describes how the MENA re/insurance market has developed in recent years and what has prompted greater risk retention within the underlying market. He thinks there is plenty of reinsurance premium to go around but cautions against competing on price alone.

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Al-Qaeda And Islamist Terror Groups: Here we continue to assess the relative strengths and weaknesses of the Islamist terror groups, along with their overall threat to the Western world. Despite the gains made in counter-terrorism since September 11, 2001, it is clear that the threat from large Islamist terrorist groups has not been eradicated. Indeed, a number of Islamist terrorist organizations continue to aspire to conduct complex attacks against Western countries and interests around the world.

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Iselle And Julio: Update:  Tropical Storm Iselle made landfall at about 2:30 a.m. HST (1230 UTC) along the Kau Coast on the Big Island, according to the Central Pacific Hurricane Center (CPHC). Maximum sustained winds at landfall were 60 mph, with higher gusts especially at higher elevations. Iselle was moving slowly leading to excessive rainfall accumulations. Resulting flooding has been extensive, together with reports of downed trees and power lines for affected areas. Roads are blocked with debris and downed trees, and power outages have affected at least 33,000. Some roof damage has been reported. There are no reports of deaths or major injuries.

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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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July 1 Renewals Reveal Continued Double Digit Price Decreases Across Many Lines and Geographies: Guy Carpenter reports that market pressures at July 1 renewals continued to drive price decreases across virtually all geographies and lines of business, many in the double digit range. As loss activity remained minimal, reinsurers added to surplus capacity and additional capital continued to come into the market via alternative sources.

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And, You May Have Missed…

Industry Reserve Update - Which Way Is The Cycle Turning?: With the release of the 2013 annual statutory statements, we have updated the Guy Carpenter reserve cycle analysis as shown in the chart. Overall, the figures indicate a trend showing the industry continuing to release reserves through this year, as two lines of business appear to exert the greatest impact on the cycle.

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August 14th, 2014

Guy Carpenter Launches MetaRisk® 7.3

Posted at 6:30 AM ET

Guy Carpenter today announced the release of MetaRisk® 7.3, the latest version of the firm’s premier risk and capital management decision-making tool.

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August 14th, 2014

Global Terrorist Attacks

Posted at 1:00 AM ET

According to data supplied by IHS Aerospace Defense & Security, a leading public source of defense and security information worldwide, the increasingly diverse and dispersed threat has seen terrorist activity around the world rise since 2009 (see figure below). There has also been a considerable rise in the number of fatalities from terrorist attacks during this period.

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August 13th, 2014

Domestic (Non-Islamic) Terrorism

Posted at 1:00 AM ET

Despite being overshadowed by the transnational Islamist terrorist threat since September 11, 2001, a number of destructive and costly attacks have been carried out by non-Islamic domestic groups and individuals. These include the Irish Republican Army (IRA) in the United Kingdom, Timothy McVeigh of the Oklahoma bombing in the United States and the Tamil Tigers in Sri Lanka. Such acts have resulted in significant property losses for (re)insurers. Indeed, as shown below, seven of the top ten most costly terrorist attacks (in terms of insured property losses) between 1990 and the first quarter of 2014 were carried out by these domestic groups.

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August 11th, 2014

GC Videocast - MENA Insights: Fadi AbuNahl, Chief Executive, Trust Re

Posted at 9:00 AM ET

fadi-abunahl-3-mug-small-125In our third MENA Insights interview Fadi AbuNahl, chief executive of Trust Re, describes how the MENA re/insurance market has developed in recent years and what has prompted greater risk retention within the underlying market. He thinks there is plenty of reinsurance premium to go around but cautions against competing on price alone. Continue reading…

August 11th, 2014

Al-Qaeda And Islamist Terror Groups: Part II

Posted at 1:00 AM ET

Here we continue to assess the relative strengths and weaknesses of the Islamist terror groups, along with their overall threat to the Western world. Despite the gains made in counter-terrorism since September 11, 2001, it is clear that the threat from large Islamist terrorist groups has not been eradicated. Indeed, a number of Islamist terrorist organizations continue to aspire to conduct complex attacks against Western countries and interests around the world.  

Continue reading…

August 8th, 2014

Iselle And Julio: Update

Posted at 2:24 PM ET

ts-iselle-8-8-small1Tropical Storm Iselle made landfall at about 2:30 a.m. HST (1230 UTC) today along the Kau Coast on the Big Island, according to the Central Pacific Hurricane Center (CPHC). Maximum sustained winds at landfall were 60 mph, with higher gusts especially at higher elevations. Iselle was moving slowly leading to excessive rainfall accumulations. Resulting flooding has been extensive, together with reports of downed trees and power lines for affected areas. Roads are blocked with debris and downed trees, and power outages have affected at least 33,000. Some roof damage has been reported. There are no reports of deaths or major injuries.

Continue reading…

August 8th, 2014

Week’s Top Stories: August 2 — 8, 2014

Posted at 8:00 AM ET

GC Videocast - MENA Insights: Michael Watson, Chairman and CEO, Canopius: In our second MENA Insights interview, Michael Watson, chairman and chief executive of Canopius, talks about how the MENA region has all the right ingredients for a growth-minded reinsurer, reveals what he thinks of Lloyd’s decision to open an office in the DIFC and why Canopius is considering establishing its own presence in the region.

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The Evolving Terrorist Threat: Terrorist activity over the last 18 months has reflected the changing terrorism landscape. Several important developments have occurred since the beginning of 2013, starting with French military intervention in Mali in January 2013 to prevent the country from becoming a failed state and base for jihadist terrorists.

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July 1 Renewals Reveal Continued Double Digit Price Decreases Across Many Lines and Geographies: Guy Carpenter reports that market pressures at July 1 renewals continued to drive price decreases across virtually all geographies and lines of business, many in the double digit range. As loss activity remained minimal, reinsurers added to surplus capacity and additional capital continued to come into the market via alternative sources.

Read the article>> 

 

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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Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the recent turbulence in the financial markets, insurers and reinsurers were increasing their use of enterprise risk management (ERM) to make risk and capital management decisions. While this was driven in part by rating agencies and regulators, many carriers began to recognize the value of metric-based frameworks and capital models in evaluating their portfolios.

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And, You May Have Missed…

GC Securities* Completes First Ever Catastrophe Bond Alamo Re Ltd. Series 2014-1 Notes For The State Of Texas’s Windpool: GC Securities announced the placement of the Series 2014-1 Notes, with notional principal at USD400,000,000, through a newly formed catastrophe bond shelf program, Alamo Re Ltd., to benefit the Texas Windstorm Insurance Association (TWIA). This is the first time that the TWIA has utilized the cat bond market to manage its tropical cyclone 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.

 

August 7th, 2014

Hawaii Double Threat: Hurricanes Iselle and Julio

Posted at 3:30 PM ET

hawaii-smallHurricane Iselle is poised to become the first hurricane in 22 years to make a direct landfall in Hawaii. According to the Central Pacific Hurricane Center (CPHC), Iselle is located 305 miles east-southeast of Hilo, Hawaii and 510 miles east-southeast of Honolulu, Hawaii. It has already started raining in Hilo and conditions are expected to deteriorate through the day, with the onset of tropical storm conditions this afternoon and hurricane conditions tonight. Trailing Iselle is Hurricane Julio. Julio is presently 1,235 miles east of Hilo, Hawaii. Julio is expected to impact the area shortly following Iselle, but with some uncertainty concerning the expected track and impacts.

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