Guy Carpenter today announced the appointment of Matthew Eagle as Managing Director and Head of International Analytics for Guy Carpenter.
Posts Tagged ‘Asia Pac’
Guy Carpenter today published a new report highlighting the continued increase in 2014 of total Asia Pacific catastrophe limit purchased. However, a confluence of factors, including the weakening of some key zone currencies has meant that reinsurance premium spend in the region has declined significantly.
GC Videocast - Rendez-Vous Press Briefing 2014 (James Nash) Asia Pacific Sees Increased Understanding and Quantification of Catastrophe Risk
James Nash, CEO of Asia-Pacific Operations, Guy Carpenter, considered the potential that existed in Asia-Pacific. “It is a blend of mature and emerging markets,” he said, “full of opportunities and challenges, and it requires all market participants to have a broad and diverse set of skills and offerings.” He continued: “As regulation develops across the region, and insurers are open to a wider array of modelling options by vendor and peril, we are seeing an increase in the understanding and quantification of the catastrophe risk in the region. This in turn leads to more transparent risk and capital management decision-making,” but, “at this stage the majority of alternative capital activity remains in the mature markets of Japan and Australia.”
The growing presence of the capital markets, over capacity in most lines and territories, and the ongoing rationalization of buying strategies are not only influencing market dynamics, but also the continuing evolution of the broker into a capital and risk advisor. This is according to the panel of speakers at the seventh annual press briefing held at the Reinsurance Rendez-Vous 2014 in Monte Carlo by Guy Carpenter & Company, the leading global risk and reinsurance specialist, and wholly owned subsidiary of Marsh & McLennan Companies.
Here we review recent GC Capital Ideas stories focused on climate change.
Guy Carpenter Asia-Pacific Climate Impact Centre Publishes New Annual Report: The Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC), a joint initiative of the City University of Hong Kong and Guy Carpenter, released its fifth annual report presenting the highlights of the GCACIC’s research activities from the past year. The report details the findings of 16 projects conducted by the GCACIC, which focus on climate problems in the Asia-Pacific region as well as on a global scale.
Third U.S. Climate Report Is Available: The White House released the Third U.S. National Climate Assessment report on May 6, 2014. The report was constructed with input of many U.S. scientists and coordinated by a cross section of U.S. interests including the energy sector.
Responding to Climate Change: It is vital for (re)insurers to consider how climate change could impact future losses. Global warming potentially poses a serious financial threat to the insurance industry with implications for catastrophe risk perception, pricing and modeling assumptions.
Climate Change: A Look into the Future: Global climate models project a best estimate of a further two to four degree (Celsius) increase in the mean temperature of the Earth by the end of this century. Although this may seem insignificant on an intuitive level, the resulting impacts are of significant concern. Sea-level rise is the most significant threat for coastal areas as a result of melting glaciers. Apart from this threat, changing weather patterns will result in drought and inland flood threats for some areas.
Global Warming: Adaptation Measures: The IPCC publications represent scientific consensus among many of the world’s top scientists (and scientific consensus is difficult to achieve). Their findings are generally consistent with the broader scientific literature.
Global Warming: Losses: Economic losses resulting from natural disasters increased from USD75.5 billion in the 1960s to USD659.9 billion in the 1990s (IPCC AR4, 2007 - Working Group II, Section 126.96.36.199). Insured losses have also increased, and “the dominant signal is of significant increase in the values of exposure” (IPCC AR4, 2007 - Working Group II, Section 188.8.131.52). Furthermore, the IPCC states that “failure to adjust for time-variant economic factors yields loss amounts that are not directly comparable and a pronounced upward trend for purely economic reasons.”
Here we review how the application of risk management practices and risk transfer can assist individual countries and small geographic locations with providing food security for the populace.
What is Food Security? Part I: Fundamentally food has to be safe, nutritious and available in sufficient quantity. On a global scale these are always achievable. It is at a country or smaller geographic territory-level where problems often arise.
What is Food Security? Part II: A challenge in many regions is the transport from the farm of the right food to the consumer without physical loss or spoilage. Putting transit losses aside, there is a question of getting the “correct” food and influencing the supply chain.
What is Food Security? Part III: Putting It into Practice and a Look to the Future: In several Asian countries there are already examples of attempts to alleviate the physical, social and economic factors that hamper food security. China in particular is rapidly developing a sophisticated agriculture insurance system with evidence of a number of different risk transfer instruments.
As we approach the June 2014 reinsurance renewals, we review the reinsurance renewals Guy Carpenter has reported on so far this year.
April Renewals Bring Price Reductions & Focus on Tailored Coverage: Guy Carpenter reports that the April 1, 2014 renewal was marked by price reductions and more tailored reinsurance coverage. Strong balance sheets, an abundance of capacity and a consolidation of buying led to lower reinsurance pricing across most territories and business segments at the renewal.
January 1, 2014 Renewals Bring Downward Pressure on Pricing: Guy Carpenter & Company reports that reinsurance rates-on-line fell at the January 1, 2014 renewal in nearly all classes and regions. According to Guy Carpenter’s 2014 global renewal report, strong balance sheets, relatively low loss experiences and an unprecedented influx of convergence capital spurred competition and innovation at renewal. These factors led in turn to surplus capacity across most business segments as competition spilled beyond property catastrophe lines.
The Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC), a joint initiative of the City University of Hong Kong and Guy Carpenter, today released its fifth annual report presenting the highlights of the GCACIC’s research activities from the past year. The report details the findings of 16 projects conducted by the GCACIC, which focus on climate problems in the Asia-Pacific region as well as on a global scale.
Here we bring together the GC Capital Ideas four part Enterprise Risk Management Update story for 2013:
ERM Benchmark Review, 2013 Update: Part I: In April and October 2009, Guy Carpenter published two briefings titled “Risk Profile, Appetite and Tolerance: Fundamental Concepts in Risk Management and Reinsurance Effectiveness.” This briefing is an update of those studies that summarizes the information publicly disclosed on enterprise risk management (ERM) measures.
ERM Benchmark Review, 2013 Update: Part II: Before focusing on the results of the latest study, we would like to reaffirm the definition of risk profile, risk appetite and risk tolerance found in our previous publications.
ERM Benchmark Review, 2013 Update: Part III: The table quantifies the proportion of companies in the sample that disclose the method as well as the specific level of various risk quantifications. Compared to our previous ERM benchmark study, a new metric referring to catastrophe risk has been added. Taking advantage of the increased level of disclosure and transparency on catastrophe risk exposure, we have extended our reports to include this in view of its importance in the economic capital approach of (re)insurers.
ERM Benchmark Review, 2013 Update: Part IV: Capital management using risk-based capital models and capital allocation is a central component of risk management practices. We have investigated this topic as a new chapter for our 2013 ERM Benchmark update. In this context, the table shows the portion of companies that publish concrete data on their excess capital - the amount of capital retained in excess of a certain target amount. The table also shows both the portion of companies using risk-based capital models in the risk management process and the portion giving some indication of the methodology of the capital allocation process.