Posts Tagged ‘alternative risk transfer’



September 10th, 2018

Closing the Gap: Public Sector Risk Financing Solutions Increase Community Resiliency - GC@MC Commentary

Posted at 1:00 AM ET

clark_jonathan-headshotJonathan Clark, Head of Public Sector Specialty, U.S.

Contact

  • Only 33 percent of economic disasters are alleviated through (re)insurance
  • Recent functional risk transfer mechanisms use advances in data, analytics and modeling
  • Guy Carpenter and GC Securities* are working with over 100 public entities around the globe Continue reading…
April 19th, 2016

Public Sector Risk: Conclusion

Posted at 1:00 AM ET

We have seen significant growth in public sector entities transferring risk to the reinsurance market utilizing traditional risk transfer structures and alternative risk transfer structures such as collateralized reinsurance and catastrophe bonds.

Continue reading…

September 15th, 2014

Influx of New Capital Continues to Reshape the Reinsurance Market

Posted at 10:30 PM ET

2014-sep-capital-markets-cover-image-crGuy Carpenter today published a new report focusing on the growth in the insurance-linked securities (ILS) market during the past year and some of the recent developments in catastrophe bond structure and risk transfer.

Continue reading…

September 13th, 2014

GC Videocast - Rendez-Vous Press Briefing 2014 (David Priebe) Capacity From New Sources

Posted at 2:11 PM ET

2014-mc-priebe-photoFocusing on the continuing supply of capacity from new sources, David Priebe, Vice Chairman, Guy Carpenter and Head of GC Securities, said: “Guy Carpenter estimates that the global property catastrophe limit exceeds US$300bn, with non-traditional reinsurance in the form of catastrophe bonds, collateralized reinsurance and industry loss warranties increasing from 14 percent last year to an estimated 16 percent this year. This is double the 8 percent of 2008.” Investor interest in such structures, he added, remained high during the period. “Strong investor demand meant placements were routinely over-subscribed, often by multiples of the targeted size.”

Continue reading…

September 13th, 2014

GC Videocast - Rendez-Vous Press Briefing 2014, Introduction (Alex Moczarski)

Posted at 2:09 PM ET

2014-sep-mc-moczarski-photoAlex Moczarski, President and Chief Executive Officer, Guy Carpenter & Company, and Chairman, Marsh & McLennan Companies International, introduces the Guy Carpenter press briefing at the Monte Carlo Rendez-Vous in this GC Capital Ideas videocast.

Continue reading…

June 13th, 2013

Chart: Alternative Capacity as a Percentage of Global Property Catastrophe Reinsurance Limit

Posted at 1:00 AM ET

The increasing influence of alternative capacity is demonstrated by the chart below, which shows the growth of convergence capacity as a percentage of global property catastrophe limit from 2008 to 2013 (projected).

Continue reading…

February 20th, 2013

Adapting to an Evolving Market of More Permanent Capital Market Capacity

Posted at 1:00 AM ET

ezbiansky_chris_biopotter_des_photograph1Christopher Ezbiansky, Mergers and Acquisitions Advisory - Americas and Des Potter, Mergers and Acquisitions Advisory - Europe, GC Securities*

Contact

A new capital management paradigm is challenging the traditional reinsurance model. Historically, significant market losses from major catastrophic events and low investment yields were a catalyst for an improved rate environment. Faced with current economic conditions, reinsurers are finding it more difficult to generate adequate returns in excess of their cost of capital, and are seeing an increased competitive threat from alternative capacity from the capital markets. New money appears to be more permanent and therefore limits the firmness and duration of any improved rate environment. Catastrophe bonds, sidecars, structured industry-loss warranties and collateralized reinsurance vehicles are among the alternative market options. Hedge funds are also playing a more active role, with a couple of major names setting up reinsurance operations in Bermuda.

Continue reading…

September 9th, 2012

Adapting to an Evolving Market of More Permanent Capital Market Capacity

Posted at 11:00 PM ET

ezbiansky_chris_biopotter_des_photograph1Christopher Ezbiansky, Mergers and Acquisitions Advisory - Americas and Des Potter, Mergers and Acquisitions Advisory - Europe, GC Securities*

Contact

A new capital management paradigm is challenging the traditional reinsurance model. Historically, significant market losses from major catastrophic events and low investment yields were a catalyst for an improved rate environment. Faced with current economic conditions, reinsurers are finding it more difficult to generate adequate returns in excess of their cost of capital, and are seeing an increased competitive threat from alternative capacity from the capital markets. New money appears to be more permanent and therefore limits the firmness and duration of any improved rate environment. Catastrophe bonds, sidecars, structured industry-loss warranties and collateralized reinsurance vehicles are among the alternative market options. Hedge funds are also playing a more active role, with a couple of major names setting up reinsurance operations in Bermuda.

Continue reading…

March 27th, 2012

Alternative Risk Transfer: Part II, BCAR Impact, Quota Share and Working Layer Excess of Loss Covers

Posted at 1:00 AM ET

BCAR Impact

Purchasing an aggregate stop loss provides a positive impact to the BCAR score by decreasing the capital charge. In year one, the benefit of the purchase is applied to the premium risk charge for the current accident year with benefit to the reserve risk charge in future years. In the first year, the accident year stop loss may reduce the premium risk charge significantly. The biggest reduction in the premium risk charge will occur when the stop loss provides protection between A.M. Best’s estimate of the expected loss ratio and 35 percent to 45 percent above that estimate. The decrease in the capital factor is equal to the limit purchased net of the AP that must be paid in the event of a loss. Surplus is reduced by the after-tax margin paid. For the second year, the reduction in capital charge is applied against the loss reserves. This reduces the benefit in the second year from that achieved in the first year, as the reserves are net of loss payments made in year one.

Continue reading…