Posts Tagged ‘accounting’



March 29th, 2012

What to Watch in 2012, Part II

Posted at 1:00 AM ET

2012 will undoubtedly be a challenging year, but Guy Carpenter believes that growth opportunities exist - or can be created - for companies that have the fortitude to see and develop them. Below we examine Themes 6 through 10 of the 10 major themes that the (re)insurance sector will face in 2012. (Themes 1 through 5 were examined in a prior GC Capital Ideas post.)

Continue reading…

September 13th, 2011

Solvency II: Changing the Game

Posted at 1:00 AM ET

lightfoot_david_gcciDavid Lightfoot, Head of GC Analytics - International
Contact

Market consensus holds that Solvency II will ultimately benefit reinsurers, as primary insurers faced with higher risk-adjusted capital requirements will turn to the reinsurance market as a relatively inexpensive source of additional capital and risk transfer. This assumption, however, conceals numerous challenges - and several opportunities - that Solvency II presents.

Continue reading…

May 10th, 2011

Succeeding Under Solvency II, Reinsurance and Counterparty Risk: Impact of Solvency II on the Reinsurance Market

Posted at 1:00 AM ET

David Flandro, Global Head of Business Intelligence, Claude Lefebvre, Head of GC Analytics EMEA Region, Mark Shumway, Senior Vice President
Contact

Previous reports in our Succeeding Under Solvency II series focused on the capital requirements associated with Pillar I, corporate governance (Pillar II) and disclosure (Pillar III). In this briefing, the third in the series, we concentrate on special considerations for reinsurance and counterparty risk.

Continue reading…

August 25th, 2009

NAIC Summer Meeting

Posted at 8:00 AM ET

Financial Intelligence Team
Contact

Reinsurance Regulatory Modernization Framework

At the National Association of Insurance Commissioners (NAIC) summer meeting, discussions continued regarding the Reinsurance Regulatory Modernization Framework, which would change the reinsurance collateral requirements. There appear to be a number of issues that would delay implementation of this framework including both constitutional and non-constitutional issues.

Continue reading…

August 17th, 2009

What does Solvency II Mean for Insurance Groups?

Posted at 1:01 AM ET

Financial Intelligence Team
Contact

Introduction

When Solvency II becomes effective in 2012, group support — which would have allowed capital held at the group level to cover the requirements of any company in the group — will be not permitted. This prohibition will require group entities to hold capital according to the Solvency Capital Requirements (SCR) in each individual entity. The application of group-level diversification benefits to individual entities will not be allowed. This last-minute change to the original framework directive may cause some groups to change their structures. At a minimum, they are likely to rethink how much risk capital will be carried at the group level versus the operating entity level given that the risk capital needed in the group will increase without recognition of group support.

Continue reading…

June 11th, 2009

FIT Intelligence Update

Posted at 9:00 AM ET

The Financial Accounting Standards Board (FASB) continues to work on the Insurance Contracts project. The FASB has indicated that it will not support current exit value for reserving, but is favoring fulfillment value instead. Fulfillment value represents the amount that will actually be paid as claims become due (essentially the present value of expected losses plus a risk margin). Measurement of fulfillment value would use expected cash flows (i.e., a probability-weighted average of possible cash flow results) rather than a “best estimate.” In addition, a company should use all information available, including industry and market information and the company’s own historical data.

Continue reading…

June 4th, 2009

Solution Spotlight: Financial Intelligence Team

Posted at 1:00 AM ET

Guy Carpenter’s Financial Intelligence Team (FIT) scours the insurance and reinsurance marketplace for information that affects how risk-bearers manage risk and capital. FIT uses information from financial markets, rating agencies, regulators and other sources to help carriers optimize the deployment of their capital.

There’s more to managing capital than expected loss, value at risk (VaR), and the other basic metrics on which insurers and reinsurers rely. Other factors to be considered include:

 

None of these factors is static, making it crucial that carriers have access to a resource that continually monitors these areas and understands how they could impact risk-bearers. FIT works with Guy Carpenter’s broking teams and Specialty practices to ensure that our clients benefit from our investment in addressing the full set of issues that shape the business of risk and capital management.

Order Enterprise Risk Analysis, Guy Carpenter’s ERM book¬†>>

December 31st, 2008

Accounting and Accountability: Fair Value and Convergence

Posted at 1:00 AM ET

Fair value accounting - also known as “mark-to-market” - has appeared in the headlines quite frequently, largely because of the ongoing financial catastrophe. Recent statements by the Securities and Exchange Commission (SEC), Financial Accounting Standards Board (FASB), and International Accounting Standards Board (IASB) have fueled the debate, and the U.S. government’s USD700 billion bailout package requires that the SEC perform a study on the impact of fair value accounting on financial institutions … and suspend the practice, if necessary.

Continue reading…