Super Typhoon Meranti made close approach to southern Taiwan with one-minute sustained winds of 305 kilometers per hour (190 mph), among the strongest tropical cyclones on record. Meranti rendered significant flooding and wind impacts to southern Taiwan, with nearly 800 millimeters (32 inches) of rainfall for some locations. Meranti then weakened to make final landfall on Mainland China in Fujian Province with one-minute sustained winds of 170 kilometers per hour (105 mph). Meranti rendered significant flood impacts and damage to infrastructure following final landfall. At least 11 fatalities and 82 injuries have been reported. Our first thoughts and concerns are with those lost and directly affected by this event.
Posts Tagged ‘Asia Pacific’
The concept of equivalence under Solvency II determines to what extent (re)insurance entities outside Europe can operate within the European Union (EU) while relying solely on their local solvency standards. The ability to operate in the EU is a significant issue that impacts multinational (re)insurance companies and groups.
Super Typhoon Nepartak made landfall on the southeast coast of Taiwan around 22 UTC on July 7, before final landfall as a tropical storm on Mainland China around 06 UTC on July 9. Nepartak has rendered significant flood impacts both in Taiwan and Mainland China according to media reports, with at least 10 and three dead in Mainland China and Taiwan, respectively. Flood impacts have been especially severe in Mainland China, which was affected by excessive monsoon rains just prior to Nepartak. Our first thoughts and concerns are with those lost and directly affected.
From one of GC Capital Ideas’ more popular categories, we highlight the top Chart Room stories viewed during the second quarter of 2016:
The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.
From one of GC Capital Ideas’ more popular categories, we highlight the top Chart Room stories viewed during the first quarter of 2016:
1. Global Property Catastrophe ROL Index 1990 to 2016: The Guy Carpenter Global Property Catastrophe Rate on Line (ROL) index is presented for 1990 through 2016.
2. Regional Property Catastrophe ROL Index, 1990 to 2016: The chart shows the indexes for United States, United Kingdom, Asia Pacific and Europe.
3. Top Ten Catastrophe Bond Transactions for 2015: The table lists the top ten catastrophe bond transactions that were completed in 2015.
4. Catastrophe Bond Issuance and Capital Outstanding - 1998 to YE 2015: The chart below presents catastrophe bond issuance through 2015. Total bond issuance for the year 2015 was the fourth highest historically.
5. Alternative Capacity as a Percentage of Catastrophe Reinsurance Limit: The chart below presents alternative capital capacity as a percentage of global property catastrophe reinsurance limit from 2008 to year-end 2015.
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The average balance of payments in Indonesian reinsurance transactions over the past five years has been in a deficit of IDR5.65 trillion (USD455 million) per year. This has been a point of frustration for the Indonesian government. As such, the Indonesia Financial Services Authority (OJK) has instructed insurers to retain more risk and to reinsure more business with domestic reinsurers, including the recently-formed state reinsurer, Indonesia Re, to “improve and optimize capacity in the country.” The OJK has also encouraged all domestic reinsurers to obtain an international rating in order to improve competitiveness with foreign reinsurers. However, it is anticipated that high cessions to other unrated, domestic companies will increase credit risk charges and pressure capital adequacy ratios.
Other countries, such as the Philippines and Indonesia, have instituted rules that may, conversely, impede the development of a healthy, profitable insurance market. The Indonesian regulator’s recent steps to reduce capital outflows, with a focus on reinsurance premiums ceded to international reinsurers, remain highly debated and will be explored in greater detail later. The Philippines, in addition to a risk-based capital (RBC) framework, has instituted a minimum paid-up capital requirement (starting in 2006 and revised in 2013) that increases every two years and will result in a PHP2 billion (approximately USD44 million) minimum threshold in 2020. This will put minimum capital levels in the Philippines well above those of more developed markets, including Australia, Japan and Singapore. The policy applies uniformly across the industry regardless of premium volume, line of business or geographic scope and therefore its impact is more strongly felt by smaller carriers that will most likely be forced out of the market or into the arms of larger players. The Philippines Insurer and Reinsurer Association (PIRA) has been outspoken against the minimum capital requirement and stated a preference for a standalone RBC metric.