February 18th, 2015

2014 Cat Bond Pricing Normalizes in Q4

Posted at 1:00 AM ET

The continued influx of third party capital from new and existing market participants also favorably impacted insurance-linked securities (ILS) pricing for protection buyers. The continued low interest rate environment encouraged institutional investors (such as pension funds and hedge funds) to seek the higher yields offered by natural cat risk notes. As a result, sponsors took advantage of the opportunity to lock in attractive rate on line and essentially, hedge rate volatility.

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February 17th, 2015

Guy Carpenter Appoints Matthew Eagle as Head of International Analytics

Posted at 11:30 PM ET

Guy Carpenter today announced the appointment of Matthew Eagle as Managing Director and Head of International Analytics for Guy Carpenter. 

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February 17th, 2015

Catastrophe Bond Update: Q4 2014 - Issuance Reaches Industry Full Year Record

Posted at 1:00 AM ET

After one of the slowest third quarters to date for 144A property and casualty (P&C) catastrophe bond issuance, the fourth quarter saw a flurry of activity that resulted in full year 144A P&C cat bond issuance exceeding USD8 billion - an industry record. Total risk capital outstanding as of December 31, 2014 equaled USD22.868 billion, the highest level of outstanding risk capital the market has ever supported.

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February 16th, 2015

GC Capital Tip: Use E-mail Alerts Effectively

Posted at 1:00 AM ET

We know that different readers have different needs. So, instead of checking GC Capital Ideas every day, use our e-mail alerts to see when we’ve published an article that may interest you. Every day, a summary of our most recent articles will arrive in your inbox. Click through to the stories that interest you. Skip those that don’t. In this way, e-mail alerts can save you time and ensure that you won’t miss the information that matters most to you.

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February 16th, 2015

GC Capital Tip: Learn Which Topics Most Interest Industry Readers

Posted at 1:00 AM ET

GC Capital Ideas presents rankings of the top GC Capital Ideas stories that have been viewed by the largest numbers of readers.  These lists appear at the end of each week, each month and each quarter. Get an understanding of which industry topics are the hottest. Enter the terms “Week in Review,” “Month in Review” or “Quarter in Review” in the Search window to access these lists.

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February 13th, 2015

Week’s Top Stories: February 7 — 13, 2015

Posted at 8:00 AM ET

Capital Markets Developing Trends: Capital markets capacity continues to innovate as highlighted by the recent issuance of a catastrophe bond by the MTA. This issue, MetroCat, which came to market in July 2013, demonstrated the willingness of capital markets investors to assume storm surge and flood risk from named storms in a cost effective manner.

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Chart: Top Ten Catastrophe Bond Transactions for 2014: The table lists the top ten catastrophe bond transactions that were completed in 2014.

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2014 Catastrophe Bond Activity Ends on Record Note with More Innovative Bonds Expected in 2015, According to GC Securities* Report: GC Securities, a division of MMC Securities Corp., a U.S. registered broker-dealer and member FINRA/NFA/SIPC, released a briefing and analysis of the record catastrophe bond activity for 2014 and expectations for the market in 2015.

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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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Risk Profile, Appetite, and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness: Prior to the 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 Videocast - Linking Risk Appetite to Strategy: In the second video in the Holistic Balance Sheet Management series, Andrew Cox, Capital Optimization, Guy Carpenter and Niall Clifford, Financial Strategy Group, Mercer, explore how companies should approach investment risk and the link between investment strategy, risk appetite and reinsurance strategy. A key focus for insurance companies should be to link their investment strategy with their risk appetite metrics. While any increase in return on capital may seem very attractive, it is important that companies ensure that the risks they are taking are in line with their risk appetite and that they are aware of their constraints, allowing them to take risks in a measured way. Investment strategy should be considered alongside regulatory requirements, as a key aspect of Solvency II relates to how well each company understands the risks in its portfolio.

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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.

February 12th, 2015

Chart: Top Ten Catastrophe Bond Transactions for 2014

Posted at 1:00 AM ET

The table lists the top ten catastrophe bond transactions that were completed in 2014.

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February 11th, 2015

Features of Collateral Structures

Posted at 1:00 AM ET

A collateralized reinsurance transaction is one in which a market creates a trust account at the inception of the contract term and funds the account in an amount equal to the contract limit (less certain deductions). This funding mechanism provides the client with readily accessible funds in the event of a loss that are segregated from the other assets of the market and remains available even if the market becomes insolvent. A collateralized reinsurance transaction also requires a pre-negotiated release of assets in the trust fund back to the market if there are no losses or if loss development is less than the contract limit.

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February 10th, 2015

Managing Counterparty Risk

Posted at 1:00 AM ET

Guy Carpenter helps our clients manage the specific counterparty risk elements associated with collateralized markets. The credit analysis of collateralized markets is different than the analysis of a traditional reinsurer.

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February 9th, 2015

Capital Markets Developing Trends

Posted at 1:00 AM ET

Capital markets capacity continues to innovate as highlighted by the recent issuance of a catastrophe bond by the MTA . This issue, MetroCat, which came to market in July 2013, demonstrated the willingness of capital markets investors to assume storm surge and flood risk from named storms in a cost effective manner.

Continue reading…