Posts Tagged ‘Aaron Bueler’



June 17th, 2014

Guy Carpenter Report Reinforces Need for TRIPRA Renewal

Posted at 11:15 PM ET

Guy CarpenterĀ released its latest report on global terrorism. The report highlights evolving global terrorism risks and the impact these risks have on the reinsurance market. It also emphasizes the vital role the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) plays in the United States ensuring the availability and affordability of terrorism (re)insurance capacity throughout the country.

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July 30th, 2012

Workers Compensation at the Jul 1 2012 Reinsurance Renewal

Posted at 1:30 AM ET

bueler_aaron_gcciAaron Bueler, Managing Director
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Rate increases and an apparent decrease in the use of carrier discounting were encouraging signs for an improving market. However, other headwinds remained - depressed investment rates, reserve development, medical trend (including pharmacy) and slow job growth were still major challenges to the industry. The workers compensation line is still struggling with profitability.

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January 2nd, 2012

Top GC Capital Ideas Stories on Reserves

Posted at 1:00 AM ET

Here we review the top GC Capital Ideas stories that have covered reserves in the last year.

MetaRiskĀ® ReserveTM: How to Get Ahead of the Reserving Cycle: The impact of claims inflation on eroding returns is among the most vexing challenges that insurers face. Getting ahead of the reserving cycle would be a significant competitive advantage, but many carriers do not have the right tools at their disposal. As a result, the ability to hit target return on equity (ROE) levels is put at risk, and firm value hangs in the balance.

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Reserving Cycle Analysis Suggests Tightening Ahead: In recent years there has been a steady stream of reserve releases from insurers, which helped support financial results in the face of a weakening market and significant catastrophe losses. Heading into 2012, Guy Carpenter’s analysis of the reserving cycle suggests that the tide may be turning, and we may be heading into a period of reserve shortfalls.

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Guy Carpenter Publishes First Industry Risk Benchmarks Report: Guy Carpenter announced publication of its first Industry Risk Benchmarks report, which provides risk benchmarks for loss ratios and reserves, by line of business, for coefficient of variation (standard deviation/mean), correlation and cycles.

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Workers Compensation Reserve Risk Development: The Cat That May Be Lurking in Your Balance Sheet: Sudden natural disasters such as the tragic Tohoku earthquake in March are not the only catastrophes that can impact insurers’ balance sheets and policyholder surplus. Such well publicized natural catastrophes only account for about 10 percent of insurers’ notable capital and surplus impairments triggering regulatory action and concern. Of the remaining 90 percent, by far the single largest cause of impairments over the past 40 years (1969-2009) emanated from inadequate pricing and deficient loss reserves - resulting in approximately 40 percent of the cases.

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Chart: Property & Casualty Accident Year Reserve Development: Accident year loss experience is beginning to show signs of lower reserve margins. The chart below shows U.S. P&C industry reserve development by accident year since 2000. The reserving cycle is evident in the graph with adverse accident year loss development during the “soft market” years of 2000 and 2001 and favorable development between 2003 and 2007. The orange line in the graph shows the average initial loss ratio pick. The old reserving adage that “good years get better and bad years get worse” appears to be borne out here.

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Chart: Sustainability of Loss Reserves: Historically, one of the “big cats” has been sector under-reserving, which served as the backdrop for the last hard market. Over the last four years, reserve releases have featured prominently in the reinsurance sector and have continued to do so up until the third quarter of 2010. The chart below shows the contribution to reserve releases on the Guy Carpenter Bermuda Reinsurance Composite combined ratios from 2005. It is notable that the benefit from reserve releases has ticked up in the first nine months of 2010 by one full percentage point, to 8.8 points on the loss ratio. This has occurred during a year when many projected reserve releases would diminish.

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Chart: Incurred But Not Reported Levels a Measure of Reserving Trends: A clue which could point to a shift in reserving trends may be evident in U.S. P&C industry percentage of first year incurred but not reported (IBNR) figures, which, all else equal, is a measure of reserving conservatism. In the chart below, a trend of potentially diminishing conservatism can be seen. It is significant that the industry is, in aggregate, back to levels of around 30 percent - levels previously seen in the last soft market.

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May 9th, 2011

Workers Compensation Reserve Risk Development: The Cat That May Be Lurking in Your Balance Sheet

Posted at 1:00 AM ET

metropoulos_emil_gccibueler_aaron_gcci1Aaron Bueler, Global Head of Workers Compensation Specialty and Emil Metropoulos, Senior Vice President of Casualty Specialty
Contact

Sudden natural disasters such as the tragic Tohoku earthquake in March are not the only catastrophes that can impact insurers’ balance sheets and policyholder surplus. Such well publicized natural catastrophes only account for about 10 percent of insurers’ notable capital and surplus impairments triggering regulatory action and concern . Of the remaining 90 percent, by far the single largest cause of impairments over the past 40 years (1969-2009) emanated from inadequate pricing and deficient loss reserves — resulting in approximately 40 percent of the cases.

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April 6th, 2010

US Workers Compensation Renewals at April 1, 2010

Posted at 10:00 AM ET

Aaron Bueler, Managing Director and Julie White, Vice President
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Workers compensation treaty renewal activity in the first quarter of 2010 was light, following the rush of January 1 renewals. Overall, the softening of treaty rates and terms appeared to be slowing with overall program renewal rates coming in flat to slightly down. Single claimant exposed (working) layers saw reinsurers focusing on holding rates flat against falling subject premium bases. Catastrophe layer pricing showed continued softening of rates.

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March 9th, 2010

Workers Compensation Jan 1 Renewal

Posted at 12:00 PM ET

Aaron Bueler, Managing Director and Emil Metropoulos, Senior Vice PresidentĀ 

With both the indemnity and medical severity components continuing to rise, the cost of workers compensation insurance remains a top concern for all employers, despite favorable trends in reduced claim frequency. The recession has further put pressure on wages that are being outpaced by indemnity inflation. Workers compensation medical inflation also continues to grow faster than the Medical Consumer Price Index. Despite these trends, primary workers compensation writers remained competitive by either keeping rates flat or granting reductions up to 5 percent on premium rates. Insurers attempted to write new business to offset lost premium caused by exposure decreases across their portfolios.

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March 25th, 2009

Guy Carpenter Western Region Seminar a Resounding Success

Posted at 11:00 AM ET

Guy Carpenter hosted (re)insurance industry executives from the western region of the United States on March 4 for a two-day event to discuss the challenges of managing risk and capital in a precarious economic climate. The event, “Shelter from the Storm: Managing Risk and Capital in Rough Seas,” included presentations by some of Guy Carpenter’s leading thinkers on issues from the cost and availability of capital to the effectiveness of models and the advantages of implementing an Enterprise Risk Management (ERM) framework. Ultimately, all discussions pointed back to the one crucial issue that cedents and markets will face in 2009: how to protect their balance sheets from the dual risks of financial and insured losses.

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February 11th, 2009

Workers Comp Stays Steady

Posted at 1:00 AM ET

Aaron Bueler, Managing Director
Contact

Workers compensation reinsurance pricing remained fairly flat at the January 1, 2009 renewal. Rates on line (ROL) declined slightly for multi-claimant catastrophe programs, and rate reductions for single-claimant exposed programs were slight (if not flat). Reinsurers had sought to turn the tide of rate and ROL decreases of 10 percent or more over the last several renewals. Cedent goals, on the other hand, were to lower (or at most maintain) expiring rates on typically decreasing Subject Premium volumes for larger programs.

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